Morning Highlights

Our Focus For Today Is On Small Cap, Property, Oil and Gas Sector

Banks and property counters led Singapore market higher in opening trade today after US stocks climbed overnight. STI gapped up 20.81 points to open at 2915.36, breaking the 2900 psychological level. 

Japan's benchmark Nikkei 225 Average touched a high of 10,773.14, its strongest intraday level since October 2008, following gains on Wall Street. The index was up 1% at 10,759.15 in early trading Tuesday, while the Topix was up 1.1% at 926.15.

  • City development broke high of 11.74
  • Sembcorp Marine broke high of 3.76
  • Lookout for China Sector
  • REITs are still the same, resilient to go up nor downside
  • New Trade Opportunity with Parkway, refer to Mid Term Quick Pick 8

News Updates:

  1. Credit Suisse Group AG has been sued for US$24 billion by property owners who said the Swiss bank schemed to defraud investors in several resort communities, including the bankrupted Yellowstone Club.

  2. US stocks raced higher in the first trades of 2010, with sentiment boosted by a global market rally that was helped by corporate deal making and upbeat economic news from China. Dow industrials rally 156 points, finishing at their highest level since October 2008.

  3. IMF Forecast to reflect “somewhat more upbeat expectations” about the world economy: Lipsky (Business Times)

  4. Crude oil rose to US$80 a barrel amid thin trading volumes yesterday, the first trading day of 2010, partly supported by news that Russia had halted oil supplies to Belarussian refineries.

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 E3B Wee Hur Holdings 0.59 0.545 0.635 Broke out but Not Entered
2 HIPI Hi-P International 0.745 0.71 0.78 CANCELLED
3 BRCA BRC Asia Ltd 0.255 0.195 0.315
4 SGXL Singapore Exchange Ltd 8.35 8.21 8.49
5 SIAT Singapore Airport Terminal Services 2.78 2.67 2.89 CANCELLED
6 STRL Straits Asia Resources 2.68 2.53 2.83 Broke out but Not Entered
7 D5N Z-Obee Holdings 0.29 0.175 0.405
8 EPIL Epure International 0.785 0.715 0.855 Broke out but Not Entered
9 GUCL GuocoLeisure 0.72 0.68 0.76 CANCELLED
10 Hock Lian Seng 0.315 0.285 0.345 PROFIT- CLOSED at 0.33
11 IFAR Indofood Agri Resources 2.20 2.06 2.34 PROFIT- CLOSED at 2.40
12 QMDT Q & M Dental Group 0.595 0.555 0.635 LOSS- CLOSED at 0.575
13 HBEE Ho Bee Investment 1.81 1.73 1.89 PROFIT- CLOSED at 1.84
14 KLAN Keppel Land 3.55 3.44 3.66 PROFIT- CLOSED at 3.72
15 FEGL Falcon Energy Group 0.81 0.765 0.855 CLOSED at 0.81

Here’s Our Mid Term Holding Opportunities:

Symbol

Name

Entry

SL

TSL

TP

Remarks
1 OCBC Overseas Chinese Banking Corp 8.83 8.15 8.55 9.51 Overnight, Current Price at 9.08
2 KLAN Keppel Land 3.38 3.14 3.62 Overnight, Current Price at 3.73
3 UTOS UOL Group 4.06 3.20 3.74 4.92 Overnight, Current Price at 4.13
4 DBSM DBS Group 15.48 14.34 14.40 16.96 Triggered, Current Price at 15.50
5 STEG Singapore Technologies Engineering 3.27 3.00 3.54  
6 IFAR Indofood Agri Resources 2.20 1.94 2.46 Overnight, Current Price at 2.38
7 NOBL Noble Group 3.29 2.95 3.63 Triggered, Current Price at 3.29
8 PARM Parkway Holdings 3.02 2.74 3.30 Triggered, Current Price at 3.06

Stock Prices last updated at 17:05 (Singapore Time)

Here’s a brief summary to look at the contributing factors that led to STI rise in 2009: 3 Driving Forces

  1. sharp and swift recovery of economy, where GDP rising from double digit negative to positive in terms of growth
  2. weaken US dollar that causes more liquidity inflow to the Asian Markets.
  3. government stimulus package, including cut in corporate tax rate and job credit scheme

The STI ended off the year with the highest close since 1 August 2008, staging a slow but steady 4-day ascent to 2,897.6 (+2.1% week-on-week [wow]). Year-on-Year, the local bourse was up by 64.5%.

 Afternoon Highlights

The STI is holding well above 2900 points. However, the Small Caps are retreating. Hence, we have closed all our short term open trades. Please refer to Short Term Quick Pick for updates.

  • Wilmar broke high of 6.67
  • CSE Global broke high of 0.9

News Updates:

  1. Japan Airlines said on Tuesday that it had won vital backing from its workers to slash their pensions, as Tokyo signaled that bankruptcy was a possibility for the debt-ridden carrier
  2. Nestle formally took itself out of the running for U.K. chocolate market, Cadbury, by buying Kraft Foods’ frozen business instead: Nestle buys Kraft Pizza unit for US$3.7 billion.
  3. Sumitomo Mitsui Financial Group Inc. is likely to raise about 800 billion yen ($8.7 billion) by issuing common shares, according to media reports Tuesday.
  4. Apple Inc. will announce as soon as Wednesday that it has acquired Quattro Wireless for $275 million, according to a report Tuesday from All Things Digital, which cited several unnamed sources.
  5. The Agricultural Bank of China is planning to go public via a dual listing in Shanghai and Hong Kong as early as April, potentially raising as much as $22 billion in the share sale, according to a state media report.

In Summary,

Index closed up 25.73 points at 2920.28, with 3.21 billion traded.

It is good to see that index manages to clear 2900 level at today’s session. However, we believe  there is a high chance to see market retreating back below 2900 before it starts to trend upwards again. Therefore, do watch out for possible market retracement and the next important resistance to note is at 3000.

Last but not least, volume has picked up significantly to above 3 billion shows money flowing back into the stock market. This is an additional plus point to a bullish market outlook.