Wednesday, March 31, 2010

US Market Summary 30 Mar 2010

The stock market closed with modest gains after a report that consumer confidence grew more than expected in March. We can see that the market is slowly recovering but stocks won't be able to push higher unless there's an improvement in the job market. Investors have been tolerant of uneven housing reports and are instead focused on jobs.

Monday, March 29, 2010

Market News for this week


§ US consumer sentiment ended unchanged in March from February. The final March reading for the surveys' overall index on consumer sentiment was 73.6, the same as February's, but slightly above the 73 forecast by analysts polled by Reuters. (Source: BT Online)

§ The US economy expanded at 5.6 per cent in the fourth quarter, the government said on Friday, revising downward an earlier estimate of 5.9 per cent gross domestic product growth. (Source: BT Online)

§ President Barack Obama's administration on Friday announced new plans to help up to four million US homeowners. The measures will tap into US$50 billion worth of funding already set aside to help the housing sector. The administration has already spent hundreds of billions of dollars trying to stabilise the housing market and reduce foreclosures. (Source: BT Online)


§ Singapore's factory output came in better than expected for a third straight month in February, surging 19.1 per cent year on year as global electronics demand strengthened further. On a seasonally adjusted basis, February's industrial production grew 5.9 per cent from January, the Economic Development Board said yesterday. (Source: BT Online)

§ Visitor arrivals to Singapore jumped 24.2 per cent year-on-year to 857,000 last month, the highest ever recorded in the month of February. Visitor days came in at 3.3 million days, up 16.3 per cent compared to the corresponding month in 2009. (Source: BT Online)

§ Leasing market for non-landed homes showed signs of recovery in the final quarter of 2009. Median rents saw their first quarter-on-quarter growth of 0.5 per cent following five quarters of continued decline from a peak in Q2 2008. The monthly median rent in Q4 2009 was $3.02 per sq ft. Occupancy rates also jumped, achieving 94.5 per cent in Q4 2009. (Source: BT Online)

Greater China Region

· An adviser to the People's Bank of China, Fan Gang, says the mainland could adopt a more flexible exchange rate policy once the global economy is back on a sure footing. In an opinion piece, Mr Fan warned that a revaluation of the yuan would not by itself resolve economic problems in the US such as high unemployment and a massive trade deficit. He said China 's politicians have a domestic agenda just like the Americans. The key element of that agenda is to maintain employment growth. (Source: PBOC)

· A residential site in Tung Chung will become the first site to be auctioned in the coming financial year. A developer triggered the sale by agreeing to submit a minimum bid of almost HK$2.9 billion. The size of the site is 26,200 square metres. The auction will take place in mid-May. It follows successful auctions of sites in Tai Po. (Sources: RTHK)

· Authorities revealed that the growth of new loans supplied by commercial banks remained relatively rapid in March. The new loans supplied by Industrial and Commercial Bank of China, Agricultural Bank, Bank of China, Construction Bank had reached nearly 2,000 billion yuan in the first two weeks of March, which is slightly higher than the same period of last month. - The new loans supplied by the whole banking sector are estimated at about 800 billion to 1 trillion yuan in March. Taking into account the quarter-end performance evaluation of commercial banks and strong corporate credit demand, the impulse of banks to lend is still evident in March.(Source: China Security News)

· On 25 March, the governor of Central bank Zhou Xiaochuan said when attending annual meeting of Inter-American Development Bank, that some of the special incentives can be gradually faded out only if convinced of the economic recovery. The necessary conditions for implementing exit policies also include "make certain that W-shaped economic recovery won’t appear, that is slowdown in economic growth again after experiencing a rebound." - Taking a gradual implementation of exit policies is easier to communicate and can be understood easily by market participants. (Source: PBOC)

· The deputy director of National Development and Reform Commission Xu Xianping revealed that the relevant departments were coming up with a guidance to speed up the development of Yangtze River shipping, aiming at fostering regional economy of Yangtze River as new economic growth of Shanghai shipping economy to drive the economic development of inland rivers. -On A-share market, the listed companies related to transport of Yangtze River area include such 4 port corporations as Shanghai Port Group, Chongqing Gangjiu,Wuhu Port, Hong Kong, Nanjing Port, and Chang Jiang Shipping Group Phoenix whose business focuses on water transport on Yangtze River.(Source: NDRC)

· ICBC announced its intention to issue convertible bonds of not more than 25 billion yuan in A-share market to supplement the capital funds. After this financing, ICBC's capital adequacy ratio will be 12% or more, indicating that in principle it will no longer seek new financing through capital market in the next three years. - Re-financing is needed to further improve capital structure, raise capital quality, and to meet credit needs. However, now ICBC's capital adequacy ratio is still better than the national average, so the specific time of issuing the bonds is still to be selected.(Source: ICBC)


· Foreign investors remained net buyers of Thai shares for a 24th consecutive session worth Bt1,007b last Fri. (Source: Bisnews)

· The Finance Ministry is ready to raise Thailand’s GDP growth forecast for 2010 to at least 4% from a previous estimate of at least 3.5% but the figures were still below actual fundamentals as ongoing political chaos would drag growth down below 5%, a source at the ministry said. (Source: Post Today)

· Thai political update: (1) The government and core leaders of the United Front for Democracy against Dictatorship (UDD) will hold a second round of talks in a bid to defuse political tensions today after failure thrash out their differences over conditions leading to a house dissolution yesterday as the red shirts put forward a timeframe of 15 days for PM Abhisit Vejjajiva to dissolve the parliament; and (2) a series of explosions hit Bangkok with the latest bomb exploding near a residence of former PM and veteran politician Banharn Silapa-archa at Soi Charan Sanitwong 57 Sunday night. (Source: Krungthep Turakij)

· PM Abhisit Vejjajiva may decide to impose the International Security Act (ISA) in the resort town of Hua Hin to maintain law and order during the Mekong River Commission (MRC) Summit to be held from Apr 2-5, 2010. (Source: Bisnews)

· Finance Minister Korn Chatikavanji sent a signal of interest rate increases once the political situation returned to normal and the economy recovered. He also saw hot money flowing into stock markets but cited that the ongoing baht’s strength did not erode Thailand ’s export competitiveness as the currency appreciation was in line with currencies of its regional competitors. (Source: Krungthep Turakij)

Regional Market Focus for this week


§ On Friday (26Mar10), shares in Singapore closed higher, with the STI up by 17.91 points to 2,906.28. Gainers led losers 309 to 167. In the US , stocks initially rose after European Union leaders said they had agreed on a standby aid package for Greece , and after better-than- expected March consumer sentiment data. However, they sold off later during the day to close mostly flat, with the S&P 500 marginally higher by 0.86 point (0.07%) at 1,166.59.

§ Technicals for the STI seem to be leaning harder on the Shanghai Composite at this point in time. The STI continued higher on Friday despite a very obvious rejection of key resistance in the S&P 500 the day before (Thursday, 25Mar10). The Shanghai Composite on the other hand, rallied 50 points from its low on Friday.

§ Price action wise, the technical outlook is currently somewhat unclear due to the conflicting direction given by Shanghai and the S&P 500, as well as the STI’s seeming inability to decide which side to bank on more. We go back to watching key support & resistance levels for clues on the STI’s direction. Resistance is at 2,910 and 2,932 respectively. Support is in the 2,885 to 2,880 region, then 2,870 to 2,865. A breach of support/resistance will give us a directional bias for the STI.

Hong Kong

§ Hong Kong market rallied and the benchmark indexes upped by the most in a week; on the speculation European leaders will form an agreement to ease Greece ’s debt problems. The HSI and the HSCEI gained 274.56pts and 147.84pts respectively settled at 21053.51 and 12050.33. Market turnover was 60.28 billion.

§ We expected that the recent low last week, which closes to 20700 would be, a critical support for the HSI. The US market may consolidate at recent high level and swing within a relatively narrow range before non-farm payrolls announcement this Friday, which limits the upside potential of benchmark indexes. Besides, the volatility of benchmark indexes would be higher resulting from the tightening measures to cool the mainland properties markets. Expected support and resistance today are 20900 and 21258 respectively.


§ Thai stocks were extremely volatile throughout the session last Fri before succumbing to a heavy bout of profit taking in late market trading on risk aversion ahead of the red-shirt’s rally over the weekend. The composite SET Index ended the session down 5.5 points in lighter volume while foreign investors remained net buyers of local equities.

§ Even though foreign investors continued to buy local shares for a 24th consecutive session, pushing the main index higher by as much as 11%, net foreign buying was however showing signs of abating in some regional markets, leading to heightened speculation on when foreign fund flows would reverse. Such speculation also led to rising market volatility during the session. In the near term, we still give more weight to the political factor as a second round of talks between the government and the red shirts will take center stage today after failure to reach any common ground on parliament dissolution proposed by anti-government protesters to end the ongoing political stalemate yesterday. On the external front, concerns over Greece ’s debt problems appear to be abating somewhat. In a big picture, we believe the overall Thai market is likely to see a choppy session with a positive bias today.

§ For today’s strategy, we advise investors to look for laggard plays relative to peers or the broad market.

§ Today, resistance on the main index is expected at 793-800 and support at 772-763.

Thursday, March 25, 2010

Stocks fall after agency cuts Portugal debt rating

NEW YORK (AP) -- Major stock indexes fell from their 2010 highs Wednesday as weakness in the housing market and rising European debt loads revived investors' pessimistic view of the economy.

The Dow Jones industrial average fell about 53 points. It was only the Dow's second drop in 12 days. Broader stock indexes also slid.

Treasury prices tumbled after a government debt auction drew only modest demand for a second straight day. That raised concerns that the government will have to pay higher interest rates to attract buyers for its debt. Washington has been issuing record amounts of debt to help revive the economy.

The drop in stocks came after Fitch Ratings lowered Portugal's credit rating. The agency said the country's recovery will be slower than others that use the euro. Fitch contends that could hurt Portugal's ability to repay its debt.

Deficit problems in Europe have been one of the few drags on stocks this year. Rising debt in Greece, Portugal and other nations that use the euro have investors worried that troubles there could upend a nascent global recovery.

I'm sure this has been one of the major weakness in the market, which it would not recover so fast. Anyway just stay alert for the time being for slow recovery.

Brain Bliss