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Early Christmas Gift For Markets
Singapore Market Commentary | 07 December 2012
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By: Choo Hao Xiang
Articles (151) Profile

Market prayers were answered. That seemed to be the case for the past fortnight as most of the regional indices ended in positive territories. Our local bourse was not left out as it gained 3.9% to close near its 52-week high of 3,110.86. The timely boost were spurred by talks of urbanisation and sustainable growth by China’s new boss, a new Greek aid, high hopes that there will be further policy easing in Japan and encouraging US economic data.

There was however no question that the most unsettling “fiscal cliff” issue, had set the tone for global markets, especially the US stocks. After conflicting remarks about the talks’ status, the S&P 500 Index experienced a slight pullback from the 1,419.7 high in the week ended 30 Nov. Still, the benchmark held strongly above the psychological level of 1,400, affirming the likelihood of the index moving up in the uptrend channel.

Just as eventful were developments back at home. Muddy Waters resumed its attack after Olam announced plans to raise US$1.25b with backing from state-owned Temasek. Shares of the commodity trader hit an intra-day low of $1.425 on 6 Dec. Meanwhile, China Minzhong Food Corp, which is 16.9% owned by Government of Singapore Investment Corp, saw its share price lose a massive 11.8% after a block trade fuelled speculation that one of its largest shareholders had sold its stake.

On a more positive front, SC Global Developments became the latest company to explore the privatisation route after the company’s chairman made a cash offer of $1.80 apiece for shares he does not own. Subsequent to the announcement, its shares surged 49.8% to settle at $1.805 on 6 Dec.

In what is shaping up to be a year-end rally, the Straits Times Index looks set to test its next resistance of about 3,260, should it penetrate the immediate resistance level of 3,110 and stay above that level, as the 10-day and 20-day moving averages as well as the RSI indicator signalled bullish indications.

Haoxiang manages and oversees the portfolio of stocks in the consumer goods and hospitality sectors at Shares Investment.

Please click here for more information about this author.

Olam Int'l  1.810 -- --   
Business: Co is engaged in sourcing, processing, packaging and merchandising agricultural products. [FY18 Turnover] Food staples & packaged foods (47.6%), confectionery & beverage ingredients (23.4%), industrial raw materials, infrastructure & logistics (14.9%), edible nuts & spices (14.1%).

Insight: May-19, 1Q19 revenue rose 16.7% due to increased t... Read More

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