Morning Highlights

The STI gapped up to open at 2668.86.  It is still range-bounded.

Our Focus For Today is on Bank Stocks

There are no Quick Picks for today. But we are keeping a close lookout on the bank stocks. The banks are trading strongly. UOB is reaching its resistance at 17.96; DBS has touched its 1st resistance at 13.50, doing slight retracement now; OCBC opens high but coming off, will have to see how it trades further. As of now, UOB seems to be the most potential of all.

On the other hand, property shares are weak. Within the sector, Capitaland’s movement is very sluggish while City Development is moving in a tight range, and same goes for Hong Kong Land. We believe that the property sector is not likely to perform in the coming weeks until there is a substantial increase in the price range for City Development. Capitaland needs to breakthrough high of 4.46 and Hong Kong Land needs to breakthrough high of 4.83.

The investors are now looking for guidance about the US economy this week from data issued not by the government, but by big retailers in the form of 3Q earnings reports.

The financial markets are still trying to get a sense of whether consumers, while worried about unemployment, are nonetheless willing to spend, especially as the holiday season approaches. Retailers' earnings reports and outlooks for the future should give them clues about the economic recovery. Investors will also get a first look at on consumer sentiment during November. (AP)

Upcoming IPO is Capitamall Asia Ltd, prospectus lodged to wait for further announcement. More details on upcoming IPOs can be viewed here.

Corporate Announcements
SembCorp Marine: Exercised its right to acquire the second unit of the jack-up drilling rig, the West Elara from Seadrill Ltd for US$10.8 million.

Corporate Earnings Announcement Dates
Wed 11 Nov 09: Noble, Yanlord, IndoFood 3QFY09, SingTel 2Q09

China will report its key October CPI, Industrial Production, Retail Sales and Trade Balance on Tuesday 10th November ‘09. Investors will monitor these figures closely to see if the economic giant’s engines are still humming.

Elsewhere, U.K will announce its September unemployment rate on Wednesday 11th November ‘09, Eurozone’s September Industrial Production on Thursday 12th November ‘09, and the week will round up with Hong Kong’s and the Eurozone’s 3Q09 GDP on Friday 13th November ‘09. U.S will also report its November Michigan confidence index on Friday.

News Updates

  1. October jobless rate surprises, up to 10.2%; nonfarm payrolls shed 190,000 jobs‏
  2. Gold for December delivery hits $1,100 an ounce‏ and gold futures hit fresh high above $1,105 an ounce in December’s electronic trading‏.

  3. Berkshire Hathaway's net soars on big turnaround in investments‏

  4. Japan's foreign reserves rose to a record high for the third straight month in October partly as rising gold prices inflated the value of its gold holdings, the Ministry of Finance said on Monday.

  5. China Minsheng Banking is reportedly seeking to raise up to $4.7 billion in an initial public offering in Hong Kong, in what would be the largest such share sale in the city this year.

  6. Shares of AXA Asia Pacific Holdings rally 30.5% to their highest level in a year after the Australian insurance company rejects a $10.2 billion joint offer from AMP Ltd and AXA Group.

  7. Barclays Asia chief: To add 10% more investment-bank staff in 2010

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 Last Week>

Bullish Stocks (Singapore)

Symbol

Name

Entry

SL

TSL

TP

Remarks

1 HWHS Hwa Hong

0.515

0.465

 0.525

0.565

Overnight, Current Price at 0.57

Stock Prices last updated at 17:30 (Singapore Time)

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

  1. Allgreen Properties – Buy at 1.21, Stop Loss at 1.04
  2. City Development – Buy at 10.50, Stop Loss at 9.55
  3. Wing Tai Holdings – Buy at 1.75, Stop Loss at 1.55
  4. Ezra – Buy at 2.08, Stop Loss at 1.66 

Afternoon Highlights

It seems that the market is displaying the same trading pattern as of Friday. 2657.57 is a fairly strong support.

There is a surge in index from 15:30 onwards. STI manages to break high of 2676.35 (high made during morning session). Hence, we deduce that 2657.57 is a strong support. High chance that the market is going higher as we can see that upward momentum is building up. The resistance at 2681.69 is broken.

UOB broke high of 17.96, to wait for setups

News Updates:

  • Shares of IMI surged 10% in early trade as the U.K. engineering group said second-half operating margins will be better than previously expected, topping 14%, leading to adjusted earnings per share between 43 pence and 45 pence.
  • French water and waste management utility Veolia Environnement said that its total revenue in the first nine months of the year fell 2.8% to 25.36 billion euros and was down 1.7% at constant exchange rates.
  • Insurer Allianz said that it swung to a 3Q net profit of 1.32 billion euros ($1.97 billion from a loss of 2.02 billion euros a year earlier).

In Summary,

Market starts trending upwards without a pause on 15min chart from 15:30 onwards, mostly lead by the banks stocks. Index ended the day up 35.17 points at 2693.38 with 1.2357 billion traded.

Winquote - pdfMachine from Broadgun Software, http://pdfmachine.com, a great PDF writer utility!

There are 2 possible scenarios that might happen in tomorrow’s trading session:

1st Case: US overnight performance is good, for instance, Dow is up by 1%. Therefore, Singapore market will follow suit and gap up at tomorrow’s open to test the 3rd resistance at 2708.14 and then subsequently pull back.

2nd Case: US overnight performance is moderately subtle, thus, Singapore market is probably going to open with small gains (preferred), or small losses, and flirt with the new resistance at 2681.69. A pullback will need to occur first in order for the index to move higher from here.

All in all, we believe that market sentiment has shifted back to bullish. We are on the lookout for strong stocks to long. Currently, the 3 banks stocks are the favourites.  On the final note, the volume traded so far is not impressive. It will be ideal to see an increase in the volume over the week.

Updates on Hwa Hong

The stock may perform up to 0.62. However, do note that the ex date is on 13th November 2009. Please exercise cautious when near to 13th. The stock is likely to be exhibiting runaway, so it is important to trail accordingly.

For conservative traders, you may wish to take profit since the stock has already achieved our initial TP as shown in the Quick Pick.