Archive for the ‘Market Review and Trends’ Category

Posted on March 14, 2010 - by Tan Kin Lian

Pay TV operators to carry contents of third parties

The Media Development Authority has announced that they will require pay TV operators to carry the contents of third parties, but this will only apply to future contents.

This is a good move, but does not go far enough. The biggest damage is going to occur in respect of existing content, specifically the English Premier League. Over the next few months, many households will have to go through the expensive exercise of switching their platform (from Starhub to Singtel) or installing a new set of cables. It is wasteful and inconvenient.

Singtel is likely to face serious resource issues in meeting the heavy demand and also in addressing the technical issues of connectivity and customer experience. Already, they faced glitches. This is bound to increase significantly. Read more…

Posted on March 2, 2010 - by AK71

STI: Marching in place in March?

TA is not about predicting price movements. TA always presents two possible scenarios. To most people, this immediately means it’s as good as not saying anything. Well, if we had a tool that could tell us if a security was definitely moving up or down, …………..; you fill in the blanks.

Then, why do we still have TA? Well, knowing the trends, supports and resistance levels could help us make certain decisions when certain numbers are hit. Is that it? I am probably not doing the subject justice but for my purpose, in a nutshell, yes.

OK, on to what you are waiting for. What do I see in STI’s charts?

On the daily chart, we see that the MFI is clearly downtrending with lower highs and lower lows. The stochastics is turning down from the boundary of the overbought region. These are momentum oscillators and their current patterns indicate weakening buying momentum in the near term. Read more…

Posted on February 22, 2010 - by Jeflin

Investing Pitfalls In the Year of Metal Tiger

The Year of the Metal Tiger is upon us. Traditionally, the Lunar New Year is a festive period where the Chinese celebrate by giving angpows, buy new stuff after doing a thorough spring cleaning, clear outstanding debts and look forward to bountiful rewards. However, given that the tiger is a ferocious animal, this year is generally not good for risky ventures. To succeed in investing, we will need the traits of a tiger – courage, stealth and strength.

Currently, the stock market rally has stumbled into a roadblock. Since its January high, major stock market indices have fallen about 5-8%, prompting some investors to question if a repeat of the 2008 crisis is imminent. To be sure, a typical correction of 10-15% bodes well for the stock market as it gathers strength to make new highs. The situation gets a bit worrisome when the market plunges more than 25%.

The S&P 500 is still hovering above major support at the 200-day moving average but potential time bombs could break that resilience and marks a new bear market which last for a year or more.
Sovereign Debt Defaults
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Posted on February 19, 2010 - by AK71

A rebound or something more lasting?

A reader, CT, posed some questions in response to my post yesterday:

“i was wondering why u would reduce ur exposure at this point in Goldenagri and STI. do u think that there will be another correction soon? or are u just afraid of high volatility? could u expand ur thoughts on that? i ask because it seems to me that after this correction, the entire mkt seems poised for a steady uptick.”

Read more…

Posted on February 17, 2010 - by Alvin

The Risk of Focusing Investment in One Country

Globalisation is an overused word. People have been using the word but not sure how it actually affects them in the real world. I would say our mindset is still very country centric and one good example is investment. How many of us actually have investments well diversified all around the world? I believe most of us invest in our own country more than the others. As my title suggests, what is the risk of focusing the investment in one country? Kenneth Fisher would like to expose the risk to you.

Below is the table (extracted from “The Only Three Questions that Count”) that ranks the country with the best returns for each year (from 1990 to 2005). Read more…

Posted on February 9, 2010 - by kevinscully

Current market jitters from weak US data and soverign debt problems in Europe but I was expecting these…….and the irony is that

In 2009, we saw the possible collapse and eventual collapse of some of the biggest corporate names in the world – Lehman, Merrill Lynch, GM, AIG, Fannie Mae, Freddie Mac, etc.  With that behind us, I was of the view that there isnt another corporate failure/s big enough to frighten and spook markets in 2010.  In my Blog of 4 Jan 2010, I highlighted the risks of the withdrawal of fiscal stimulus and low interest rates and also the burgeoning debt of many economies especially in Europe (the three weakest were Greece, Spain and Italy) and lets not forget about the UK which is not part of the EU.  All the economies in the EU have exceeded that national debt to GDP limits which were conditions of the economic union.

I am therefore not surprised by the problems in Greece, Portugal and Spain which had led to severe weakness in the Euro and strength in the US$.  Because the world economy is recovering and corporate earnings are rebounding, it was only a matter of time for the fiscal stimulus to be withdrawn.  As regards to the national debt problems, I am of the view that some rescue from the bigger members of the EU such as Germany and France or even the G7 will alleviate problems – its only a matter of time. Read more…

Posted on February 7, 2010 - by Alen

My Feb view

Expect the unexpected, I guess all the investor should aware of this. Just like we are roaring ahead with the new year. Obama’s proposal to regulate US banks and potential China tightening have brought the long overdue correction.

The once high flying IndoAgri food and Wilmar crash back to earth from recent high. Second and third liner are even worst. The position that I have built slowly over the past few months is like back to square, some gain, some loss. However, I remain optimistic, regardless of the fear and rumour around.

This is going to be Asia golden era, at least for the next 10 years, this is the place where the growth will be. US consumer will not recover just yet, until they build up the saving and correct the excess. Asia governments will continue to stimulate the domestic consumption to counter the decline of export sector. Read more…

Posted on February 1, 2010 - by kevinscully

Volatility and uncertainty continue but this is expected to last for another 4-6 weeks……the VIX index starts to rise again (worth keeping an eye on)

A nice intra-day rebound last Friday helped pare morning losses with the STI Index down a modest 12 odd points last Friday compared to a more than 30 point decline on Friday morning.   The uncertainty and volatility of stock markets will continue but as the uncertainty is being generated by fiscal policy and government decisions on when and how much to raise interest rates, we know that Governments and Central Banks have some room to move viz the eventual withdrawal of these measures.   Mutual fund managers missed the rally in 2009 and many of them had to “BUY” performance and were thus less willing to take profit despite handsome gains they made in 2009.  As we start the new year, they have the flexibility to take some profit and this has resulted in the long overdue correction that we thought we would see in the middle and toward the end of Q3-2009.   Originally, i was of the view that the uncertainty was being taken in its stride by investors.  The VIX index rose sharply but then started to ease despite the sharp falls in the market.  I noticed that over the last three days, the VIX has started to rise again and although still modest at about 24 – we should keep an eye on it to see if continues to rise.  A breach above 30 could signal a more meaningful correction (see chart on VIX below).

Read more…

Posted on January 28, 2010 - by kevinscully

The STI Index has broken down through its 100 day moving average yesterday…

…this signals further downside…….maybe to the 2500 level but a lot depends on O

I was a bit surprised by the decline in the STI Index yesterday as it was holding up well until about 3.30pm (see intra-day chart below).

I reiterate my view that this is an overdue correction not a trend reversal as the macro economic and more importantly corporate earnings cycle seems to be strengthening. Read more…

Posted on January 26, 2010 - by kevinscully

Is the March 2009 Bull rally over ?…….this question was put to me by some financial journalists yesterday

Most global stock markets are now down for the year by 2-6% with the notable exception of Tokyo.   The falls were triggered by two events – China’s credit tightening of bank credit and President Obama’s proposed new rules for banks.   In an interview with some journalists yesterday, I was asked whether the Bull rally was over and what was my strategy now.  I thought I would share my views in this posting.

The declines of the last week were all driven by policy changes – credit tightening in China is likely to be followed by other countries especially those in the EU and US.  President Obama’s changes for US banks seems vague and unclear.   Both come on the back of clear signs of a Global economic recovery albeit modest and also a real recovery again albeit modest in corporate earnings as evidenced by the guidance for revenue growth in 2010.  There are now shortages in components in certain segments of the electronics sector probably from an absence of new capacity and a consolidation of capacity from the crisis of 2009.   So a gradual removal of fiscal stimulus and a raising of interest rates from near zero levels is to be expected especially when most economies in Europe have national debts to GDP in excess of 80%. Read more…