SINGAPORE STI MARKET REVIEW & MARKET FORECAST

Alex Gray

Publish date: Sat, 05 Dec 2015, 12:49 PM

Singapore's benchmark Straits Times Index opened lower on Thursday at 2,858.96, down 24.68 points or 0.86 per cent, after an oil price slide ahead of an OPEC meeting and ended higher to 0.3 points or 0.01 percent at 2883.9.STI came off from its intra-day peak of 2890.03 and low of 2857.499.

LOCAL BOURSE

Singapore's private sector firms saw a recovery in November in business conditions, with new business supporting a faster expansion of output.Nikkei Singapore Purchasing Managers' Index (PMI) was at 52.2 in November, up from 50.2 in October.

"Though modest, the latest improvement was the strongest seen since February," the financial information services provider which compiles the index.Earnings forecasts for Singapore companies are likely to be cut again in 2016, after a dismal performance for many firms this year.

This as slowing demand from China and domestic policies to cool property prices hit stocks in the city-state.

MARKET FORECAST

STI is expected to consolidate within the range of 2870-2900.It has its support at 2855 and resistance at 2905. If it breaks this resistance it might go up to 2925. Investor's sentiment are cautious over the hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month.

STI COUNTER SPECIFIC NEWS

SMRT Corporation will collaborate with the Agency for Science, Technology and Research to develop technologies to improve Singapore's transport network reliability and performance.The five-year agreement will bring together the rail operations and engineering capabilities of SMRT, the strengths in sensor networks and data analytics of I2R.
Ascendas Hospitality Trust (AHTrust) will pay A$120 million ($124 million) for the serviced apartments component of a mixed-use development at 224-252 La Trobe Street, Melbourne, Australia.The property is freehold and comprises 252 units of apartments, on levels 10 to 32 of a 92-storey development.
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 RMB23.97 million ($5.3 million) from RM47 million.

GLOBAL FACTORS AND WORLD INDICES:

Asian stocks slipped and the dollar advanced on Thursday after hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month.
Japan's Nikkei lost 0.3 per cent, moving in a tight range as a wait-and-see mood prevailed ahead of the European Central Bank's policy decision later in the day.
China stocks rose for the fourth straight day on Thursday, recovering most of last Friday's 5-per cent loss, as banking and property heavyweights propped up main indexes, while fears arising from the government's crackdown on brokerages receded.
Tokyo shares closed flat Thursday after cautiously erasing early losses on late afternoon bargain-hunting ahead of a policy meeting by the European Central Bank later in the day.The benchmark Nikkei index at the Tokyo Stock Exchange ended up 0.01 per cent, or 1.77 points, at 19,939.90.
Seoul shares slipped on Thursday on foreign and institutional selling, but moves were cautious ahead of the European Central Bank's policy meeting and the release of US non-farm payrolls.
US crude stocks rose last week for the tenth straight week, while gasoline and distillate inventories increased.Crude inventories rose by 1.2 million barrels in the last week, compared with analysts' expectations for an decrease of 471,000 barrels.
Weak inflation data spurred hopes the European Central Bank could deliver more stimulus this week, though European bourses traded in a tight range.The data appeared to cement hopes that the ECB - which announces the outcome of its latest monetary policy meeting on Thursday - will ramp up its quantitative easing (QE) bond-buying programme.
Oil prices bounced back in Asia on Thursday but trading was cautious on signs the Opec cartel is divided ahead of a meeting on whether to maintain or slash its high output levels.The US benchmark West Texas Intermediate closed below US$40 a barrel for the first time since late August.
The US dollar firmed on Wednesday, bolstered by Federal Reserve Chair Janet Yellen's signal that the US economy looks strong enough for an interest rate hike this month.The euro, meanwhile, was under pressure as traders expect the European Central Bank to announce additional stimulus to fight low inflation and tepid growth in the eurozone after a policy meeting.
Gold tumbled to the lowest level in more than five years as investors digested comments by Federal Reserve chair Janet Yellen which added to reasons to expect that US interest rates will rise gradually after a widely anticipated lift-off this month.Bullion for immediate delivery dropped 0.7% to US$1,046.44 ($1,478) an ounce.

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