SGX Singapore : STI Technical Analysis Outlook & Market Forecast

STI MARKET REVIEW : Singapore share prices opened higher on Tuesday with the Straits Times Index (STI) up 11.13 points or 0.39 per cent to 2,890.11 and ended 12.58 points or 0.44% higher to 2869.69. STI came off from its intra-day peak of 2890.11 and low of 2862.72.

Singapore equities inched up at noon, with no clear direction to trading and little in the way of local new cues. STI rose 0.42% to 2,894.40. Market breadth was positive. However, later in the day STI was dragged in red through heavy selling in the market.

LOCAL BOURSE 

 Singapore's GDP grew at a slower pace of 1.8% on-year in the second quarter, from 2.8% in the first quarter. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy contracted by 4.0%, a reversal from the 4.1% growth in the preceding quarter.

Singapore is experiencing hazy conditions on Tuesday, with the Pollutant Standards Index (PSI) staying at the high end of the moderate range. PSI was 79 to 91. The three-hour PSI, which is not linked to any health advisory, had been rising since morning.

Market forecast: STI is expected to take side ways trend. It has support level at 2850, if it breaks this level it may down till 2830. It is trading within the range of 2830 - 2905. It has its resistance at 2905. If has its resistance at 2900. Investor sentiments are cautious as FED has shown some expectation to increase profit by the end of this year.

STI COUNTER SPECIFIC NEWS

• A subsidiary of Magnus Energy is forking out A$1 million (S$1 million) in cash to subscribe for 8 million shares in a new Australian oil and gas company.
• Neptune Orient Lines (NOL) on Tuesday said that besides reports that surfaced in July saying Singapore state investment firm Temasek Holdings has put it up for sale, it was not aware of anything else which might explain the trading in its shares.
• DBS has ambitions to introduce cashless options through a first-of-its-kind mobile application to hawker centers and quick-serve restaurants in Singapore, a senior bank executive said on Tuesday.

GLOBAL FACTORS AND WORLD INDICES:

• Shares in Hong Kong rose Tuesday following gains in New York after top Federal Reserve officials moved to reassure dealers about the US economy after being spooked by last week's decision to hold interest rates. The Hang Seng Index climbed 0.18 per cent, or 39.65 points, to close at 21,796.58.
• China stocks rebounded for the second day on Tuesday, in a further sign of improving investor sentiment that may help the market gradually stabilise after the rout since mid-June.
• Asian shares rose on Tuesday and the dollar held steady as US markets bounced back and the European Central Bank said it was prepared to ease monetary policy further.
• Taiwan stocks rose on Tuesday mostly following overseas markets and some bargain hunting after the previous day's losses, but further gains were capped due to uncertainties ahead of the central bank's policy meeting.
• The introduction of a new accounting standard for financial instruments will be challenging for the banking industry, especially when it comes to modeling for expected losses, the European Central Bank's supervisory chief said on Tuesday.
• The dollar advanced against the euro and other leading currencies Monday on comments from US central bankers who continue to eye a 2015 interest rate increase.
• US home resales fell more than expected in August, a cautionary sign for the US housing market which has recently looked on stronger footing. The National Association of Realtors said on Monday existing home sales dropped 4.8 per cent to an annual rate of 5.31 million units.
• Gold steadied below a near three-week high on Tuesday, retaining overnight losses as Asian equities and the dollar edged higher and as investors worried over the possibility of a US interest rate hike later this year.
• Oil prices rebounded on Monday , looked like a technical correction from heavy losses last week as the basic global oversupply picture remained intact.

SGX Weekly Technical Analysis for STI

Straits Times Index (STI) opened at 2887.41 and ended -8.44 points or 0.29% lower to 2879.59 this week. STI came off from its weekly peak of 2919.77 and low of 2837.59.

STI was up 0.1% at 2,898.27 shortly after the open, showing the muted reaction of investors to the US Federal Reserve's overnight decision to leave its benchmark interest rate unchanged.

Singapore's industrial production for August is forecasted to fall by 5% on-year mainly as demand weakens due to economic slowdown in China. The pace of downward revisions for corporate earnings in Singapore and Asean has slowed this month. Consensus downward revisions have slowed to 0.2% for MSCI Singapore companies, from 1.5% average downward revisions for earnings in August.

STI was in consolidation this week. As FED did not increase the US ineterst rate, the market is expected to be positive next week. It is expected to m,ove in the range of 2800 - 2930. However, if it breaks the resistance level of 2930, it is expected to go up till 3000.

STI COUNTER SPECIFIC NEWS

• Sembcorp Industries has tied up with the Singapore Economic Development Board (EDB) to be the country's first industrial "living laboratory". It will grant technology providers access to its proprietary wastewater treatment and waste-to-energy facilities on Jurong Island for late-stage test-bedding and co-innovation of water and environmental technologies.
• Ascendas Real Estate Investment Trust (A-Reit) is looking to make its maiden acquisition of 26 logistics properties in Australia for A$1.013 billion from GIC and Frasers Property Australia.
• Singapore Press Holdings (SPH) announced on Thursday that the executive vice-president of its Corporate Development Division (CDD), Deborah Lee, 58, will be leaving the company to pursue personal interests with effect from Dec 16, 2015, after eight years of service.
• Silverlake Axis is buying SunGard Ambit (Singapore), or SAS, for US$12 million to expand its suite of software and services as well as deepen and broaden its customer relationships and geographical presence.

GLOBAL FACTORS AND WORLD INDICES

• Hong Kong equities traced most Asian markets higher Friday as traders welcomed the Federal Reserve's decision to keep interest rates at record lows, while Shanghai ended another volatile week on a positive note. Hang Seng Index added 0.30 per cent, or 66.20 points, to close at 21,920.83
• China stocks ended a volatile week slightly higher on Friday, after the US Federal Reserve held off from raising interest rates citing concerns about a weak world economy. Index of the largest listed companies in Shanghai and Shenzhen rose 0.4 per cent, to 3,251.27, but was down 2.9 per cent for the week.
• The Nikkei 225 index at the Tokyo Stock Exchange dropped 1.96 per cent, or 362.06 points, to close at 18,070.21, while the broader Topic index of all first-section shares was down 1.98 per cent, or 29.53 points, at 1,462.38.
• US central bank's decision to hold off hiking interest rates sent emerging market currencies and most Asian markets advancing on Friday, as concerns eased over an outflow of cash as the global economy suffers a painful slowdown.
• Australian shares ended higher on Friday, shaking off a negative lead from Wall Street after the head of the central bank made reassuring comments about the economy.
• Malaysia's inflation in August likely cooled to 3.0 per cent on lower fuel prices and after the Muslim Eid al-Fitr celebrations, a Reuters poll showed on Friday.
• Ringgit was set to snap the longest run of weekly declines in more than four decades after the US refrained from raising interest rates and a rally in the price of Brent crude improved prospects for the net oil exporter.
• Bank of Japan policymakers agreed that emerging economies had suffered from weak growth but were likely to improve from a longer-term perspective, minutes of the central bank's August policy meeting.
• Gold dropped from a two-week high on Friday, giving back some of the sharp gains from the last two days, as the Federal Reserve's decision to hold US interest rates steady this week added to uncertainty over the timing of an eventual rate hike.
• Oil markets were weak on Friday as fresh signs Opec will continue to value market share over prices outweighed expectations of a lift when the United States kept interest rates at historic lows.

YOMA STRATEGIC HOLDINGS LTD. : COMPANY OVERVIEW

Yoma Strategic was incorporated in Singapore on 20th October 1962. On 17 August 2006, it changed the name from Sea View Hotel Limited to Yoma Strategic Holdings Ltd after the completion of acquisition by Sea View Hotel Limited. After the completion of the acquisition, Sea View disposed off all its interests in the existing subsidiaries.Today, it is engaged in property development, construction and piling services, also project management and design services in Myanmar. Its portfolio of development properties includes apartments, condominiums and bungalows.

In this segment, the Group manages all the property projects initiated by its group including the provision of detailed budgeting, costing and planning, as well as project management. Yoma Strategic’s construction services which support its property development business, include foundation piling work for various types of buildings and acting as contractor for super-structure construction works.

It also supplies ready-mixed concrete, sand and shingle to the Myanmar construction industry.

Return on Equity	6.94%
Net Asset Value	S$702.86
Market Cap	S$640.20

FINANCIAL VIEW

• The ratio of asset and liability is increasing as y-o-y figures are considered.
• The net income is continuously increasing, as well as Gross Profit is also increasing.

	FY2013 31Dec 13	FY2014 31Dec 14	LTM Ending 30 Jun 15
Revenue	60.467	100.493	110.927
Gross Profit	26.207	44.656	45.587
Net Income	14.444	16.392	28.051
EBITDA	9.079	21.111	16.463
Total Assets	462.564	483.276	834.1
Total Liabilities	66.444	65.238	101.909

GROWTH OVER PRIOR YEAR (%)

TECHNICAL INDICATORS:

Daily Chart: Shows a consolidation, which if broken downwards may lead to a bearish trend. Also, OBV is indicating a bearish trend, while MACD will also support the same if the support1 is broken.

SGX Symbol	Z59	Currency	SGD
Last Done	0.365	Volume(‘000)	2577
Day’s Range	0.350-0.360	52Weeks’ Range	0.300-0.646

Weekly Chart: It is major downtrend counter in weekly chart also and forming the same strong support at support1, which if broken will indicate a bearish signal.

S1	S2	R1	R2
0.345	0.330	0.375	0.395

Our VIEW:

Overall Trend: Overall trend seems to be bearish in short term with some minor corrections, if any.
Short term View: Bearish below 0.345 , with resistance at 0.370.

Long term View: Bearish below 0.300 , with resistance at 0.330.

COMPANY OVERVIEW: METRO HOLDINGS LIMITED

Metro Holdings Limited, alongwith with its subsidiaries, engages in retail, property development, and leisure businesses in Singapore, the People’s Republic of China, Japan, and other countries internationally. 

It operates through two segments, Property and Retail. The company leases shopping and office spaces, as well as invests in property-related investments. It operates a chain of department stores and specialty shops, which offer a range of merchandise, fashion accessories, and casual women’s wear with ethnic origin and serves its customers through a chain of 5 Metro department stores and 11 Monsoon/Accessorize/M.2 specialty shops in Singapore; and 9 department stores in Indonesia. It also owns interests in approximately 142,000 square meters of retail and office investment properties in Beijing, Shanghai, and Guangzhou; and 1,001,000 square meters of residential and mixed-use development properties. The company was founded in 1957 and is based in Singapore.

Return on Equity	11.11%
Net Asset Value	SGD 1377.317
Market Cap	SGD 749.4 MN

FINANCIAL VIEW

	FY2013 31Dec 13	FY2014 31Dec 14	LTM Ending 30 Jun 15
Revenue	187.12	139.179	145.826
Gross Profit	57.222	18.188	8.352
Net Income	64.813	106.849	142.867
EBITDA	41.562	(0.875)	(12.508)
Total Assets	1546.975	1325.685	1641.523
Total Liabilities	123.592	73.633	199.401

• Even though the revenue and gross profits are decreasing y-o-y basis, yet for the short term, we can earn profits from it.
• The net income of the company is increasing on a y-o-y basis.

TECHNICAL INDICATORS:

Daily Chart: On daily chart the counter is on a major uptrend, with some minor corrections in between, which it has recently taken in few days before. Now, the counter is showing up a breakout on OBV to indicate a bullish trend start once again.

SGX Symbol	M01	Currency	SGD
Last Done	0.865	Volume(‘000)	29.6
Day’s Range	0.865-0.885	52 Weeks’ Range	0.816-1.013

Weekly Chart: The counter is having a major uptrend in weekly chart also and is in the consolidation in this chart, therefore it it breaks the upper level of 0.895, bullish trend is most likely to be expected.

S1	S2	R1	R2
0.875	0.835	0.895	0.930

Our VIEW: Overall Trend: Overall trend seems to be positive with some minor corrections, if any.
Short term View: BULLISH above 0.895 with support @ 0.875.

Long term View: BULLISH above 0.930 with support @ 0.895.