Joey was interviewed on 938 Live after the trading session ended on Friday, 9 September 2016. He mentioned one key reason why the market suffered weakness and when the US Markets opened the next day, more selling ensued. Will we see more weakness in the coming week, what about oil and gas stocks, can they continue their rally?
Do check out his quick views on the sector to get an idea on the levels to watch and what stocks to look out for in the coming week.
The full transcript of the interview can be seen below too.
Joey, why do you think Singapore stocks were in a sea of red today?
Singapore market opened down 16 points today taking the cue from Wall Street with DOW Jones closing down 46 points.
This was mainly due to concerns of the Federal Reserve raising rates in the coming weeks again even on views the Fed may hold it off due to weak economic data.
As such, we saw bank stocks like DBS and OCBC trading down close to 1% dragging the STI index lower in the morning.
Oil and gas stocks in Singapore saw some profit taking in the morning too with oil prices also pulling back yesterday after surging by more than 4 percent a day earlier.
So STI was pretty bearish throughout the day with occasional bargain hunting and finally we have STI closing down 21 points for the day at 2873.
Let’s talk about oil prices, we’ve been seeing rather volatile oil prices this week, how do you think the oil and gas sector has been holding up so far?
Well, we have seen Brent Crude Oil prices rallying by more than 8% from US$46 to above US$50 a barrel over the past week after government data confirmed a surprisingly huge drawdown in U.S. crude inventories.
Due to this move, some oil and gas stocks like Ezion, Rex Intl and Vard have staged a pretty impressive rebound by more than 20% from their recent lows.
Most of them pulled back this morning with oil prices halting its rally yesterday, but only to rebound from their day lows towards the closing.
I think that if oil prices were to break above the US$50 level again, we can still see more strength in some of these counters as there is now a catalyst for buyers to return.
However, one should also take note that the longer term trend remains weak in general for the oil and gas industry, especially after the Swiber saga so we may still see selling pressure along the way.
And looking into next week then, what are some of the stocks that you’re looking at?
One can consider Mapletree Commercial Trust for a potential upside. It has recently completed its Asset enhancement initiative in Vivocity which should continue to drive bottom line and strengthen its retail business.
Fundamentally, it valuations are undemanding at a PE of 19.5 times while offering a dividend yield of more than 5% at current prices.
Technically, Mapletree Commercial trust has also crossed above the 1.56 resistance level over the past few days.
We can expect to see more upside on a move above 1.60 in the coming weeks with it likely to test its high last year. We saw it closed at 1.595 today.