Retail Market Monitor: Thursday, March 16, 2017
As the saying goes, "Buy on rumours, Sell on news". Apparently, this is not just for capital markets, this holds true even for Foreign Exchange market too.
Yellen announced the rate hike decision last night, citing that the labour market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat.
Theoretically, a hike in rates will translate to a higher USD. In this case, this did not happen as markets have moved forward and priced in the possibilities earlier. Thus after the announcements of rates, USD plunged shortly after.
Personally I'm watching: Sembcorp marine, Citydev, Parkson Retail, Sunningdale, DBS. Please note that these are my personal observations of which I share with my friends who are watching the market too. In this way, we can exchange and share any information that can help us along the way.
That being said, please watch for entry prices and plan for exit too, it does not mean one can buy in blindly because the broker had mentioned earlier. Usually, it happens only when the price moves down, incurring a paper loss and friends calling me up trying to find out more. The market is like a jungle. Everything is changing, anything can happen. Even the target prices as written in the research reports should be taken as a reference, not an absolute. Ultimately, we are all here to profit from the market.
At the point of writing, Noble dropped 0.015, to a price of 0.194. As mentioned in my earlier email to a friend, I have sold noble already. the upcoming share consolidation is a surprise to all of us. It seems that market is not taking it positively.
*Economy: Economists have raised Singapore's 2017 GDP growth estimate to 2.3% (previous: 1.5%), nearer MKE's 2.5% forecast. This was spurred by anticipated improvement in the manufacturing (est: +4.5%, previous: +1.5%) and finance & insurance (est: +2%, previous: +1.8%) sectors.
*SIA: Feb group pax load factor improved 2.4ppts to 80.7%, as passenger traffic growth (+4.1%) outpaced capacity expansion (+0.9%). Load factors rose on promotions across East Asia (+3.5ppts), Americas (+5.6ppts), Europe (+5ppts) and Mid-East/Africa (+6.7ppts), with the exception of SW Pacific (-3.3ppts). Subsidiary carriers’ load factors were mixed with Tigerair (+1.4ppts to 83%) climbing, while Silkair (-0.9ppts to 73.1%) and Scoot (-1.7ppts to 85.1%) slipped. Cargo load factor rose 2.4ppts to 61.4% as capacity contraction (-5.9%) overshadowed decline in carriage (-2.1%). MKE last had a Hold with TP of $9.70.
*Noble: Proposed 10-into-1 share consolidation in a bid to reduce volatility and improve liquidity by narrowing the bid/ask spread, and concurrently soften the impact of speculative orders on the stock.
*Soilbuild Construction: Awarded $149.4m contract by the HDB to build a high rise multi-user food factory at Bedok North Avenue 4. The contract would raise its contract order book to $562.2m. Construction is expected to commence in 1Q17 and will take about 32 months to complete.
*HMI: Received strong interest for its 11-for 200 rights issue, with 145.7% subscription rate. This will raise gross proceeds of $18.5m which will be used to increase its ownership stake in Mahkota Medical Centre and Regency Specialist Hospital to 100% (prior: 48.9% and 60.8% respectively).
*Sarine Tech: Commenced operations at its new 55,000 sf facility in Surat, India, consolidating all of its Surat-based activities for the Indian diamond market under one roof.
*HL Global: Extended the long stop date for proposed disposal of LKN Investment by one month to 15 Apr.