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20-11-2013, 09:28 AM
The latest update on STI. It is likely a flat year for STI. Singapore market still lagging behind the bull in US market...
STI year-end rally unlikely
SINGAPORE — The Straits Times Index is unlikely to see a repeat of 2012’s spectacular year-end rally, even though global economic conditions continue to improve and major stock markets are responding positively to Ms Janet Yellen’s dovish stance on quantitative easing in the United States and China’s economic reform plans.
Last Thursday, Ms Yellen — who has been nominated as the first female Chairman of US Federal Reserve — indicated that current stimulus measures will be maintained to support US economic recovery.
The prospect of that happening buoyed markets, with the Dow Jones Industrial Average topping 16,000 for the first time on Monday. Singapore’s STI also rose, edging up for a third consecutive session to the highest in more than a week on Monday.
But analysts are not optimistic this will lead to a year-end rally resembling the gains of more than 7 per cent between mid-November and the end of 2012. The STI edged down 0.3 per cent to 3,192.08 yesterday.
“There will be some form of window dressing and also some level of rub-off effect from the strong rally in the US, China and Hong Kong. Therefore, we would probably see some momentum return to the STI,” Voyage Research Chief Executive Roger Tan said. “But I don’t think it will be a rally; instead, it’ll probably be small movements to around 3,300 to 3,400 points at best.”
The STI is also suffering a loss of confidence following the recent volatilities that had hit several counters, Mr Tan added.
“If we look at the ROE (return-on-equity) of the STI now, it’s below the lower quartile of ROE distribution over the last 11 years. This means our blue chips are not doing well compared to those in Hong Kong, Shanghai and even the US,” he said.
“I think STI counters as a whole will continue their weak performance till the end of the year.”
Agreeing, CMC Markets’ analyst Desmond Chua said: “Certain circumstances are in fact pointing towards a consolidation in the STI, which has gone into a very tight range over the past couple of months … I highly doubt there’ll be a rally — more likely the STI is going to hover at its current 3,200 level.”
“The STI’s price-earnings ratio is lagging below 15, which is lower than the current levels of global indices,” he added. “If investors take a long-term view, the STI still remains a valid story going into next year. But in the short term, I don’t see much upside.”
http://www.todayonline.com/business/sti-...y-unlikely
STI year-end rally unlikely
SINGAPORE — The Straits Times Index is unlikely to see a repeat of 2012’s spectacular year-end rally, even though global economic conditions continue to improve and major stock markets are responding positively to Ms Janet Yellen’s dovish stance on quantitative easing in the United States and China’s economic reform plans.
Last Thursday, Ms Yellen — who has been nominated as the first female Chairman of US Federal Reserve — indicated that current stimulus measures will be maintained to support US economic recovery.
The prospect of that happening buoyed markets, with the Dow Jones Industrial Average topping 16,000 for the first time on Monday. Singapore’s STI also rose, edging up for a third consecutive session to the highest in more than a week on Monday.
But analysts are not optimistic this will lead to a year-end rally resembling the gains of more than 7 per cent between mid-November and the end of 2012. The STI edged down 0.3 per cent to 3,192.08 yesterday.
“There will be some form of window dressing and also some level of rub-off effect from the strong rally in the US, China and Hong Kong. Therefore, we would probably see some momentum return to the STI,” Voyage Research Chief Executive Roger Tan said. “But I don’t think it will be a rally; instead, it’ll probably be small movements to around 3,300 to 3,400 points at best.”
The STI is also suffering a loss of confidence following the recent volatilities that had hit several counters, Mr Tan added.
“If we look at the ROE (return-on-equity) of the STI now, it’s below the lower quartile of ROE distribution over the last 11 years. This means our blue chips are not doing well compared to those in Hong Kong, Shanghai and even the US,” he said.
“I think STI counters as a whole will continue their weak performance till the end of the year.”
Agreeing, CMC Markets’ analyst Desmond Chua said: “Certain circumstances are in fact pointing towards a consolidation in the STI, which has gone into a very tight range over the past couple of months … I highly doubt there’ll be a rally — more likely the STI is going to hover at its current 3,200 level.”
“The STI’s price-earnings ratio is lagging below 15, which is lower than the current levels of global indices,” he added. “If investors take a long-term view, the STI still remains a valid story going into next year. But in the short term, I don’t see much upside.”
http://www.todayonline.com/business/sti-...y-unlikely
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