About the Post

Author Information

TAKING STOCK: Asian markets poised for further losses

Current decline in S’pore presents buying opportunity, say some brokers

ASIAN stock markets look set to run into more turbulence this week after Wall Street’s sharp plunge last Friday.

The Dow Jones Industrial Average’s 246-point dive – on fears that American consumers are tightening their belts – is likely to result in a regional knee-jerk selldown today.

The benchmark United States index slipped 1.5 per cent last week to close at 12,606.3 points after falling 4.2 per cent the week before.

Singapore’s Straits Times Index (STI) ended 150.45 points, or 4.4 per cent, lower at 3,287.34 for the week.

Average daily volume grew to 1.88 billion shares worth $2.12 billion last week, from 1.46 billion shares valued at $1.61 billion the week before.

Dealers say the local bourse has been suffering from a lack of fresh direction. This is set to continue.

‘There will be no focus and direction until the end of the month, when more corporate results are available.

The lack of direction is expected to persist until the next US Federal Reserve meeting,’ DMG & Partners Securities senior dealing director Gabriel Yap said.

The market is widely expecting the Fed to cut interest rates but no earlier than the end of the month.

Another direction-setter – Hong Kong – is expected to remain choppy. Analysts tip the Hang Seng Index to trade between 25,800 and 27,800 points this week. Last week, the index fell 2.4 per cent to 26,867.01.

The STI, meanwhile, is seen diving to as low as 3,000 points in the coming months.

A UOB Kay Hian technical report, however, said the ‘present decline is a buying opportunity’.

‘The STI has corrected marginally below 3,300; yet there is no major sign of panic. Even if the index breaks below 3,300, we think there will be secondary supports.’

A recent Merrill Lynch report is also upbeat over Singapore. The investment firm says it continues to favour Asean markets over those of South Korea and Taiwan.

‘Singapore’s ability to adapt to a changing economic environment has driven rapid output growth,’ it said.

‘The government has focused on three key themes: raising competitiveness, expanding the population and wealth management. This will support economic growth in the long term.’

Key US data to watch out this week will include December retail sales and reports on inflation and industrial production.

On the US corporate front, all eyes will be on the earnings of finance heavyweights such as Citigroup, JPMorgan Chase and Merrill Lynch. Much attention will be on the extent of their sub-prime losses.

Back home, the reporting season will move into full swing, with the likes of Singapore Press Holdings releasing its first-quarter results today and the Singapore Exchange its interim report tomorrow.


Source: The Sunday Times 13 Jan 08

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: