Morning Highlights

The STI gapped down to open at 2702.03 after an overnight sharp fall on Wall Street. However, it is too early for any comments on market performance. We will  need to observe further for clearer directions.

Palm oil dropped from a seven-week high after Malaysia, the world’s second-largest producer, said production next year would rise 4.9% to a record. Sellers in Indonesia withheld tenders in response to the drop (Bloomberg).

Palm oil for January delivery dropped 0.9% to 2,218 ringgit a ton on the Malaysia Derivatives Exchange.

Share prices of crude palm oil: First Resources (-1.1% dod, $0.94); Indofood (-1.1% dod, $1.78); Golden Agri (-2.2% dod, $0.45) were beaten in trading while palm oil trader Wilmar ($6.43) emerged unchanged.

The Singapore banks will report their 3Q09 results this week and next, beginning with OCBC tomorrow and DBS the last on November 6. Macquarie Research Equities (MRE) published on October 14 a note of their view on the sector and the upcoming earnings results… such as expecting margins to shrink and maintaining a neutral view on the bank sector with no Outperform recommendations. (Read Full from Warrants)

Hong Kong's Hang Seng Index dives 2.3% in opening minute of post-holiday trade‏.

Singapore Market went down further to below the 2700 point. Nonetheless, index manages to quickly redeem from the downside and holding above the point once again. However, STI remains shaky and hence, we stick by the advise to trade only strong stocks and strong sectors.  (Update 12:20)

Corporate Announcement

Capitaland announced a 3QFY09 net profit of $281.3mn, up 127% from the previous quarter but down 33% year-on-year. No dividends were declared.

News Updates

  • U.S. stocks slid, erasing an early rally, on concern lawmakers will phase out a tax credit for homebuyers and Bank of America Corp will have to sell shares to pay back its government bailout. The dollar rebounded from a 14-month low against the euro and oil wiped out an early advance.

  • All 12 shares in a gauge of homebuilders dropped as senators discussed reducing an $8,000 tax credit for first-time buyers. Bank of America sank 5.1% on speculation the government will force the bank to raise more capital, while Fifth Third Bancorp, SunTrust Banks Inc. and U.S. Bancorp lost at least 3.2% on downgrades from analyst Dick Bove. Treasuries fell, with 10-year yields touching a two-month high. (Bloomberg)

  • Japanese and South Korean shares also retreated at the open, in consequences to Dow’s fall and correction in commodity prices overnight, with resource name such as Mitsubishi Corp and and banks leading the fall in Tokyo. (MarketWatch)

Quick Picks: Here is a quick pick screen that we have designed to pick out potential stocks, both Bullish and Bearish. These are measured with emphasis on larger changes in price and volume.  <The Quick Picks referred herein contain overnight positions from Yesterday>

Bullish Stocks (Singapore)

Symbol

Name

Entry

SL

TSL

TP

Remarks
1 UOBH United Overseas Bank Ltd

17.52

17.14

17.90

Near Breakout
2 NOHL Novena Holdings 0.22 0.18 0.26  
3 TAIS Tai Sin Electric 0.30 0.26 0.34 CANCELLED
4 IFAR IndoFood Agri Resources 1.84 1.73 1.95 CANCELLED
5 VENM Venture Corp 9.68 9.31 10.05 CANCELLED
6 SCOF Supper Coffeemix 0.71 0.63 0.79 LOSS – CLOSED at 0.685
7 CATL Capitaland 4.28 4.16 4.22 4.40 PROFIT – CLOSED at 4.32
8 NOBG Noble Group 2.71 2.59 2.61 2.83 PROFIT – CLOSED at 2.73

Bearish Stocks (Singapore)

Symbol

Name

Entry

SL

TSL

TP

Remarks
1 STAR Starhub Ltd

1.87

1.96

1.78 

  
Stock Prices last updated at 17:20 (Singapore Time)

Here’s Our Mid Term Holding Opportunities for property shares.

  1. Fraser & Neave – Buy at 4.02, Stop Loss at 3.76
  2. Allgreen Properties – Buy at 1.21, Stop Loss at 1.04
  3. City Development – Buy at 10.50, Stop Loss at 9.55
  4. Wing Tai Holdings – Buy at 1.75, Stop Loss at 1.55
  5. Ezra – Buy at 2.08, Stop Loss at 1.66
  6. Lookout for Keppel Corp

Afternoon Highlights

Stock exchange data showed that Temasek has cut its stake in India's ICICI (India's second-biggest lender) from 7.6%  at the end of June to 5.76% as of Sept 30.

Singapore's consumer credit bureau said yesterday that “Credit card spending rose in the first two months of the 3Q compared to a year earlier as consumer sentiment improved…”

After reports that some Singapore-listed Chinese companies or S-chips were seeking secondary listings in Hong Kong and the United States, it has emerged that some of them have pinned their hopes on Taiwan.

STI drifts lower in the afternoon session. A resistance is seen at today’s high of 2708.14

Be cautious everyone!! Market is approaching today’s low at 2691.1 (Update 16:05)

Other News

  • BP Plc beat Q3 earnings forecasts by a big margin as its cost-cutting programme proved more successful than expected, prompting the British oil major to increase its target for savings for the year.
  • Honda posts better-than-expected profit, lifts fiscal-year earnings outlook‏

In Summary,

We have changed our market sentiment to neutral. Will need to observe further on how market is going to perform from here.

We have closed our position on Super Coffeemix today as new setups are seen.

Last but not least, STI dropped 22.12 points to close at 2694.50 with 1.5158 billion traded. We advise to stay on the sideline for the time being as market is likely to turn choppy for now.