Joey was interviewed on 938 Live after the trading session ended on Friday, 2 October 2015. Do check out his quick views on the market as we move on to the Final quarter of 2015. Are there still stock trading Opportunities? More downside ahead?
The full transcript of the interview can be seen below too.
Singapore market opened down 5 points with DOW Jones closing down 13 points on the 1st day of the 4th quarter yesterday after a solid 2% gain the day before.
Dow’s weakness was mainly due to markets remaining nervous about the outlook for this quarter ahead of highly anticipated US jobs report tonight.
STI tanked further in the morning, down by about 36 points before recovering. We have seen banks like DBS and UOB falling by more than 1% dragging the STI index lower before recovering slightly.
There were also selling pressure in oil and gas counters like Keppel Corp and Semb Marine on the back of oil prices falling near to 1% last night.
And finally STI closed down 9 points for the week.
I think that STI will still continue to be volatile to the downside as we move on to the 4th quarter. We continue to see some worrying economic data coming from China, yesterday we had the PMI reading still indicating a contraction in the manufacturing sector.
Another market overhang continues to be the Federal Reserve, which could potentially raise interest rates for the first time in nine years on either 28 October or 16 December.
Technically, STI has fallen by more than 20% from its peak in April which can signal a bear market entry. It has also kept below the key 3000 psychological level since August which indicates a lack of strength.
Just this week, we have even seen the STI tanked below the support at 2800 before recovering slightly and pulling back down today.
Therefore, the market is still weak in general and will continue to be, especially with more headwinds from China.
One can consider accumulating SMRT where price has been quite resilient over the past 1 month and pointing towards a reversal.
A major market concern for SMRT is now finally out of the way with regards to the penalty for the system-wide disruption on 7 July. SMRT could have faced a maximum fine of up to 10 percent of its annual fare revenue (approx $50m), but LTA announced last week that a financial penalty of S$5.4m will be imposed.
Fundamentally, we are still positive about the longer-term, as catalysts remain intact. SMRT is expected to benefit from the new bus government contracting model (GCM) and rail financing framework (RFF).
Technically, SMRT has been supported above the 1.25 level for the past 2 weeks which also coincides with the upward sloping 20 day moving average.
We can expect a positive move toward 1.37 as long as the support holds for now.