STI Recovers Gap of Down Week; Impact of FOMC Meeting

WEEKLY WRAP OF STI

Straits Times Index (STI) opened lower at 2832.44 on Monday and ended higher to this week by recovering the gap down at the week start by closing at 2852.84. 3 Days Free Trial Signals

STI came off from its weekly peak of 2857.39 and low of 2831.10 this week and it keep on rising in 4 consecutive working days in this week which brought which recovered the fall on the opening at the starting of this week on Monday. Wall Street's sudden slump on Thursday suggests that markets are still locked in monetary expansion mode, preferring rates to remain depressed. the impact here was rises for the Straits Times Index before and immediately after the FOMC meeting.

MARKET FORECAST FOR WEEK AHEAD

STI is expected to be in positive sentiment next week. STI has taken support near 2757 and expected to maintain this support next week as well. It has its resistance at 2941. If it breaks this resistance than it might go up to 2950.

STI COUNTER SPECIFIC NEWS

• 
  MM-2 Asia has entered into an agreement to acquire a majority stake in Millinillion, a tech start-up developing interactive solutions for digital users globally.Millinillion is a company specializing in developing Business to Consumer (B2C) mobile applications and digital interactive solutions for clients.MM-2 and Millinillion will jointly develop a series of mobile applications in data-based marketing, music and industry talent pool management.
• Marine fabrication and engineering firm Triyards seems keen to divorce from the embattled oil & gas industry this year.The company has won contracts worth US$45.5 million ($64.5 million) to build vessels that have nothing to do with oil & gas, an industry suffering falling commodity prices and order cancellations.Other firms in the sector, such as SembCorp Marine and Keppel Corp have seen their share prices suffer this year amid falling demand for their rigs and vessels.
• Q&M Dental Group (Singapore) plans to restructure its stake in Qinhuangdao Aidite High Technical Ceramic Co ahead of a possible listing of the China-based manufacturing subsidiary.As part of the restructuring, Aidite will reduce its equity capital to 23.97 million yuan from 47 million yuan.
• Golden Land Property Development shareholders have approved Frasers Centrepoint's (FCL's) proposed acquisition of 29.5% of its enlarged share capital through a 4.97 billion baht ($196 million) new capital injection.Golden Land is one of the country's leading real estate developers engaged in residential and commercial property development, as well as property management and property advisory services.
• Mencast Holdings says its energy services division has renewed its service contract with the Asian headquarter of an oil supermajor for environmental remediation services for another three years.The contract also includes the option for an extension for a further two years.Another exiting long-term contract with the same client has also been revised to include additional services and increased volumes for the remainder of its term.
• CMC Infocomm expects to report a net loss for 1H2016.The net loss was primarily due to substantial one-off professional fees incurred in relation to the initial public offering exercise when after the company was listed on the Catalist board .In addition, the group recorded an increase in overhead expenses, mainly payroll expenses due to additional headcount to support the execution of the group's expansion into new and complementary businesses in Singapore and Malaysia.Shares in CMC Infocomm closed flat at 15.1 cents.

GLOBAL FACTORS AND WORLD INDICES

• Asian shares took their cue from Wall Street and slipped on Friday, and Japanese stocks slumped after briefly jumping on the central bank's statement that it would expand parts of its stimulus programme.
• China stocks held nearly steady on Friday, capping a dramatic week that witnessed a strong relief rally in the previous session following an expected rise in US interest rates.Investors are now refocusing on economic fundamentals, with a key central government economic meeting that starts on Friday likely to offer the market fresh cues for directions.The blue-chip CSI300 index rose 0.3 per cent, to 3,767.91.
• Japanese stocks fell on Friday in a session that turned volatile after the Bank of Japan announced it would maintain its massive stimulus programme's base money target while expanding the types of assets it purchases.The benchmark index was down 1.9 per cent to 18,986.80, and had lost 1.3 per cent for the week.
• Hong Kong stocks ended Friday slightly lower, as many sectors corrected after the previous session's relief rally following the long-expected US interest rate hike.The Hang Seng index fell 0.5 per cent, to 21,755.56, while the China Enterprises Index lost 0.3 per cent, to 9,634.41 points.
• European stock markets slid at the start of trading on Friday as a rally inspired by the US interest rate hike petered out heading into the weekend break.London's benchmark FTSE 100 index dropped 0.8 per cent to 6,056.9 points .
• China's ravenous appetite for overseas assets is powering a record year for Asian dealmaking, with deal volumes in the region surpassing the US$1 trillion mark annually for the first time.Acquisitions involving companies in the Asia Pacific region rose 55 per cent in 2015 to US$1.2 trillion.Chinese buyers snapped up premier assets, ranging from the world's biggest luggage handler to Italian tire brand Pirelli & C SpA, and accounted for about half the deals from the region.
• Singdollar projected to decline most in 2016 amongst Asian currencies as the growth in Asia's developing economies will slow to 6.4 per cent next year from 6.5 per cent in 2015, with China's expansion decelerating to 6.3 per cent from 6.8 per cent. That means Asian central banks will need to further cut interest rates while the Fed gradually tightens, resulting in outflows and weaker currencies.
• The US dollar pushed higher against other major currencies on increasingly bullish sentiment about the greenback following the Federal Reserve's historic decision to lift US interest rates.
• Crude prices sank deeper in Asian trading on Friday after the US oil benchmark closed at its lowest level since February 2009 on worsening oversupply concerns and a stronger dollar.West Texas Intermediate (WTI) for January delivery was trading at US$34.77 per barrel, 18 cents off its close of US$34.95 in New York.
• Gold steadied on Friday but largely kept losses made a day earlier when the metal suffered its biggest slide in five months after U.S. interest rates were raised for the first time in nearly a decade and the dollar surged.Spot gold ticked up 0.3 percent to $1,054.40 an ounce by 0327 GMT, following a 2 percent slide in the previous session, its biggest one day slide since July. The metal is down nearly 2 percent for the week in its worst performance in six weeks.