DESPITE a slight wobble yesterday, the Straits Times Index
(STI) has enjoyed a spectacular rebound since its recent low ebb of 2,698.9
points on June 4.
In the past week, the benchmark for the local stock market
finally conquered the magic 3,000 point mark and is now up 11.7 per cent since
that low water mark last month.
In the year to date, the STI is up about 14 per cent, at
yesterday's close of 3,015.53 points.
That means the STI's gains this year are more than double
the gains in Hong Kong's Hang Seng Index, observed a note by Macquarie
yesterday. The Hang Seng is up 6.5 per cent this year.
(THIS PROVES MY POINT THAT HANGSENG WILL REMAIN 1 FIBO BELOW STI AND 2 FIBOS BELOW SP500 IF CHINA DID NOT RECOVER)
But is this rally sustainable? And just how long can the
STI stay above 3,000?
There are two ways to approach this: from a technical and
fundamental perspective.
Technical analysis attempts to predict future prices based
on patterns seen in price and volume charts. It is more often used for short to
medium- term outlooks.
The medium to longer-term outlook tends to depend on
fundamental analysis: a study of how macroeconomic events and corporate
financials and developments will affect the earnings potential and valuations of
companies.
Ms Carmen Lee, head of OCBC Investment Research, said that
her research house believes that from a technical perspective, the STI could
fluctuate between 2,950 and 3,050 for two to three weeks.
Phillip Securities Research said in a note yesterday that
technically the market 'still stands a good chance to head higher'. But it
added: 'Our conviction on this rally continuing itself is low from a fundamental
point of view.'
Phillip Securities said a rally of more than 10 per cent
has already been driven by anticipation that global central banks will step in
to stimulate the economy.
The broking house said the global economy is actually
moving beyond the help of further quantitative easing, referring to the
money-printing programme of the United States Federal Reserve.
China is also 'not in a hurry to re-accelerate the economy
beyond what is required to meet the 7.5 per cent (growth) target', Phillip
Securities added.
Other fundamental analysts do not rule out further STI
rises, but argue the more immediate risk is for some form of
correction.
Ms Lee anticipates possible volatility in the results
season. 'Now we're in the first phase, where companies with defensive earnings
are reporting,' she said.
'From the first to second week of August, we enter the next
phase where companies with more volatile earnings will report. If the results
are not within expectations, the market could be volatile. The sense is earnings
may be softer.'
Given the STI's jump of about 10 per cent since last month,
investors may cash out, she said. 'It is quite possible for a correction to take
it below 3,000.'
Ms Lee said the STI would enjoy a sustained rise above
3,000 only if there is either a resolution in macroeconomic issues such as
Europe's debt problems, or strong company earnings.
(I LOVE THIS FUCKING NAIVE COMMENT.LET US RECOLLECT IF MISS LEE IS ABSENT MINDED.WHEN STI WAS OUT OF RECESSION IN 2009,THOSE WHO BELIEVED ONLY TO BUY WHEN COUNTRY FUNDAMENTALS HAVE IMPROVED ARE TIED DOWN,3 YEARS LATER,STI IS STILL AT 3000!!AT THAT TIME WHEN SINGAPORE AND USA EXIT RECESSION IN 2009 AND 2010 RESPECTIVELY,WHO WOULD HAVE KNOWN THERE WILL COME A EUROPEAN CRISIS LATER IN 2010??????????MISS LEE,HEAD OF OCBC RESEARCH,CAN YOU GUARANTEE THAT ONCE CURRENT MACROECONOMIC ISSUES ARE RESOLVED,THERE WILL NOT COME ANOTHER CRISIS OUT OF ANOTHER COUNTRY??
PLEASE DO NOT TALK THINGS I ALREADY KNOW.FOR GOODNESS' SAKE,YOU ARE PAID EVERY MONTH,I AM NOT PAID A FIXED SALARY.PLEASE TALK SOMETHING SENSIBLE WHEN PAST HAPPENINGS HAVE ALREADY PROVEN ONE CANNOT WAIT TILL MACRO ECONOMIC ISSUES TO RESOLVE TO INVEST.
DID NOT WARREN BUFFETT ALWAYS SAY"BE GREEDY WHEN OTHERS ARE FEARFUL.."?
WHAT MISS LEE SAYS IS NOT WRONG.BUT SHE FORGOT TO ADD THE WORD"ALREADY".YES STI WILL ALREADY HAVE A SUSTAINED RISE ABOVE 3000 IF MACRO ECONOMIC ISSUES ARE RESOLVED,SUSTAINEDLY NEAR 4000. BUT ISN'T WHAT SHE SAYS,EVERYBODY ALREADY KNOW??THAT IS EQUAL TO PAID FOR TALKING REGURGITATED CRAP
1)HOW DO YOU DEFINED "RESOLVED"?WAIT TILL NEWS TELL YOU THEIR DEFINITION OF "RESOLVED"?
2)WHO ARE YOU TO DETERMINE YOUR DEFINITION OF "RESOLVED"=GOVERNMENTS' DEFINITION OF "RESOLVED"?
3)OF COURSE,AFTER EUROPEAN AND USA CRISIS ARE "RESOLVED" DUE TO MEDIA'S DEFINITION,STI WILL BE SUSTAINEDLY ABOVE 3000,YES 4000 FOR YOU TO BUY.THEN SUDDENLY COME A CRISIS OUT OF NOWHERE AGAIN!!
IN MARCH 2009 TO JUNE2009,MAJORITY ANALYSTS WERE SAYING STI WAS HAVING A FAKE RALLY DUE TO SINGAPORE STILL IN RECESSION.FAKE RALLY????FAKE RALLY TILL 2012 STILL AT 3000??WHERE GOT FAKE RALLY SO LONG?3 YEARS FAKE RALLY??EVEN THE LONGEST BEAR MARKET WAS FROM 2000-2003 IN HANGSENG AND STI,OTHER BEAR MARKETS WERE ONLY ONE YEAR IN THE HANGSENG(look at my below posts).DO YOU KNOW HOW LONG 3 YEARS IS?OR HAVE YOU COLLECTED FAT PAY FOR THESE 3 YEARS TILL YOU HAVE FORGOTTEN HOW LONG 3 YEARS ARE?
UBS wealth management's regional chief investment officer
Kelvin Tay said the local market's valuations are not expensive, based on
indicators like price to book ratio and price earnings ratio.
The Singdollar is also more resilient than regional
currencies.
This means the market may perform better than its regional
peers, though some profit-taking may take place soon.
In terms of individual sectors, DBS Vickers Research said
that the banks could see upgrades in earnings estimates, if they report rises in
net interest margins and strong loan growth. Airlines could benefit if they
report lower fuel costs, as could oil and gas companies if they report a strong
flow of new contracts.
But the real estate sector may suffer a downgrade in
earnings estimates if there is a slowdown in sales and lower average selling
prices, and shipping firms may slide if the peak season shipment numbers
disappoint.
Mr Herald van der Linde, HSBC's head of equity strategy for
the Asia-Pacific, is 'neutral' on the Singapore market. 'While defensive and
offering a good yield, it's difficult to find growth opportunities in the two
largest sectors - banks and real estate,' he said in a report. 'There are some
growth sectors, such as offshore marine.' His year-end target for the STI is
3,100.
Originally Posted by CSY
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Although, they may change their tactics next time.
Simply always go the opposite direction, and you can’t fail to make money. A heartfelt “thank you Goldman”.
We lost our financial ass a couple of years ago, but we never even missed a bonus. Thank you congress!