A strong rebound in the Singapore market yesterday helped the Straits Times Index (STI) trim its losses in October. The Singapore benchmark has lost approximately 0.6% in the first seven trading days of the month, on the back of ongoing protests in Hong Kong, coupled with uncertainty about the world’s economic growth.
 
The STI began to trend lower since the start of August following the political unrest in Russia as well as the Middle East, forming lower highs and lower lows. Tension from the Hong Kong’s protest dragged the STI to its lowest in six months on the morning of 3rd October before rebounding 0.8% to end the day positive.
 
According to Bloomberg, the STI is currently trading at approximately 13.6x Price/Earnings (P/E), compared to the 10.1x P/E seen in the HSI. Closing at 3,259.25 yesterday, the STI is currently trading 1.2% above its 200-day moving average.
 
Breaking it down
 
Among index constituents, Jardine Matheson, Keppel Corporation and CapitaLand are among the top three laggards.
 
Yesterday, Keppel Corporation fell 0.5% to close at its lowest level since February. This closing price also means the Singapore blue chip is trading 4.6% below its 50-day moving average, suggesting short term weakness in its share price.
 
CapitaLand dived on 8 October to close at its lowest level since May 2014 following a news report from The Business Times on 7 October that a battered Australian dollar may affect the company’s earnings this year. In addition, CapitaLand’s balance sheet may also take a hit from the revaluation of assets in Australia.
 
However, the rebound in Singapore yesterday saw CapitaLand rebounding 3% to close 1% higher than its 200-day moving average price of $3.09, parring part of the losses suffered last week.

Source: Macquarie Research - 10 Oct 2014