SGX Market Commentary

Published August 13, 2005 by BT

Bears ahead of bulls - but just barely

THERE was a tug-of-war between the bulls and the bears yesterday, which ultimately was won by the bears, but only just. The Straits Times Index opened stronger to recoup some of the losses it suffered in the previous two days. But the bears were relatively fresher. By the end of the day, the STI slid 2.77 points to 2,303.2. For the week, it lost 35.7 points or 1.5 per cent - its biggest decline since February this year. UOB Sesdaq Index, however, managed to eke out a gain of 0.47 point to 82.19. On a weekly basis, it was down 0.29 point or 0.35 per cent.

'Despite the sudden swing in market sentiment from one of optimism only last week to pessimism and fear currently, we see limited downside in the short term,' Kim Eng said in its market view report yesterday. DBS Vickers, meanwhile, thinks the selling momentum would continue for some stocks. In its 'From the Chartroom' report yesterday, it had called for trading sells on Cosco, Labroy Marine, SembCorp Industries and Keppel Land. Of the four, only Labroy managed to snap back from its recent losses.

The drag on the STI yesterday came from UOB, OCBC and SPH. Cushioning the fall, meanwhile, were Keppel Corp, which rose 30 cents after after crude oil prices rose above a record US$66 a barrel in New York, boosting optimism that demand for rigs will remain strong. DBS, Fraser & Neave and City Developments were among the other gainers. Hyflux, whose share price was in a free fall in the last few sessions, managed to stage a rebound. It ended 14 cents up to $3.20, with 8.2 million shares traded. Three Temasek-linked companies - Singapore Telecom, CapitaLand and Stats ChipPac - topped the actives list yesterday with 74 million shares traded among them. SingTel and Stats were unchanged, while CapitaLand ended one cent lower.

Under $1b traded

Among the second-liners, the action centred on Global Voice, Bio-Treat, Biosensors and Utac. But all moved by less than 2 per cent. Overall, trading was less hectic than the previous few sessions when over $1 billion worth of shares changed hands. Yesterday, 820 million Singapore-dollar shares worth $996.8 million were traded. Excluding warrants, losers pipped gainers by 163 to 154.

My Comments - End of consolidation? Or more to come? With oil price still trending up and winter not even here yet in US and Europe (when oil consumption goes up even higher), it's better to be safe than sorry! I'd focus on short term trades as there'll be volatility and do selective accumulations of blue chips (I'd previously sold off my entire stake of Singtel, OCBC, CCT, most of my SPH,...etc.) if the price goes below my previous selling price.