Archive for September, 2015

Straits Times Index on Wednesday underwent a volatile session tracking movements in Hong Kong and China as well as the futures market for US benchmarks.

Singapore’s benchmark Straits Times Index opened today at 2,778.59 points, down 0.01 per cent or 2.95 points and ended 4.0 points or 0.14% lower to 2772.36. STI came off from its intra-day peak of 2799.80 and low of 2772.36

Singapore stocks drifted lower at noon, bucking a regional rebound following Tuesday’s rout led by commodity-related companies. It first fell 15 points to an intraday low of 2,772 before rebounding into positive territory in the wake of gains in the Hang Seng and Shanghai Composite and a 140-points or 0.9 per cent rise in the Dow futures that brought hope that Wall St would rally on Wednesday.
LOCAL BOURSE

Singapore Exchange could see wide earnings fluctuations in coming quarters as its derivatives business faces volatile market conditions.
Singapore’s much-weaker August industrial production has tilted the balance to the Monetary Authority of Singapore (MAS) easing its monetary policy when the central bank next meets in October.

Market forecast:

STI is expected to consolidate with positive sentiment. STI has the support level of 2768. STI has its resistance at 2800. If it breaks this level it might go up to 2830. Investor sentiments are cautious over the early rate hike of U.S. by FED. STI in line with the world indices is expected to be positive.

STI COUNTER SPECIFIC NEWS

  • United Overseas Bank (UOB) is rolling out a brand campaign as part of its 80th anniversary celebrations.
  • hares in palm oil producer Golden Agri-Resources are up 6.5% at 33 cents, their highest level in nearly three months.
  • Health Management International (HMI) has appointed Chin Wei Jia as Group Chief Executive Officer.
  • Noble Group shares fell by 15% on global commodity woes.

GLOBAL FACTORS AND WORLD INDICES:

  • Hong Kong stocks bounced sharply on Wednesday from the previous session’s two-year lows, wrapping up a tumultuous quarter in which the benchmark Hang Seng Index plunged more than 20 per cent. At market close, the Hang Seng was up 1.4 per cent, to 20,846.30, while the China Enterprises Index gained 1.9 per cent, to 9,405.50 points.
  • China’s stocks rose, paring the biggest quarterly loss since 2008, as the government struggled to halt a US$5 trillion rout and the world’s second-largest economy showed signs of a sharper slowdown.
  • European stocks advanced, rebounding from Tuesday’s decline, as investors paused to assess value in what is heading for the worst quarter in four years. The Stoxx Europe 600 Index jumped 1.8 per cent to 345.43 at 8:07 am in London.
  • Nikkei share average gained 2.7 per cent to 17,388.15, but ended the quarter down 14.1 per cent, making it one of the worst performers among developed markets.
  • The S&P/ASX 200 index rose 2.1 per cent to close at 5,021.6, its biggest one-day gain since Aug 25 but insufficient to make up for the previous day’s fall of nearly 4 per cent. For the quarter ended Sept 30, the benchmark was down 8.0 per cent, its biggest three-month drop since the September quarter of 2011.
  • Asian stocks recovered slightly Wednesday from a mass sell-off in the previous session, with emerging currencies ending a tough quarter on a high but warned of further volatility ahead..
  • The global banking industry, which earned a record US$1 trillion last year thanks to Chinese lenders, will likely have revenue growth continue at a pace of about 3 per cent annually over the next few years – a growth closely aligned to global gross domestic product.
  • Asian currencies from the South Korean won to Malaysian ringgit picked up against the dollar Wednesday with confidence returning to trading floors as regional equity markets rose after a global rout.
  • Crude oil futures fell in early Asian trade on Wednesday after US inventories showed a weekly buildup that far exceeded analyst expectations.
  • Financial markets face a higher risk of liquidity squeezes in a sell-off due to the effects of the long period of low interest rates, the International Monetary Fund.
  • Gold dropped for a fourth day after consumer confidence in the U.S. unexpectedly rose in September, building the case for an interest rate increase this year.

EUR/USD

EURUSD traded at 1.1191 level on Friday. With the start of the new week we think market is going to consolidate. We believe that the currency will continue to consolidate until the US market opens. The pair is in the down trend but with the next daily candle it is expected to change its trend. If it crosses 1.1215 level, it can head up to 1.1295 level.

Forecast

EURUSD fell initially during the course of the week, but found enough support below the 1.12 level to turn things back around and form a bit of a hammer. With that, the market should try to get back to the 1.15 level, but that is close enough that it keeps us away from buying this market from a longer-term perspective. If we can get above there though, we feel that this market will then be very bullish and should continue to go much higher. With this week we do not see potential for selling this pair.

GBP/USD

GBPUSD fell during the course of the session on Friday, and as a result it looks like the market is ready to break down even farther. If we can break down below the bottom of the range during the session on Friday, we would not hesitate at all to start selling. We think at that point in time, the market should then head to the 1.50 level, and then possibly even lower than that. If we rally from here, we feel that any type of resistive candle will be a selling opportunity as well.

Forecast

The GBPUSD pair broke down significantly during the course of the week on bearish pressure from the previous up trend line. We broke down to the 1.20 level, and now it appears that if we can break down below the bottom of the range for the week, we should then reach towards the 1.50 level next, and then possibly as low as the 1.45 level. At the moment we would not prefer buying in this market.

AUD/USD

AUDUSD initially tried to rally during the course of the week but as you can see struggled. With this, we feel that the market will continue to bounce around the 0.70 level, an area that the market has been very attracted to lately. With this, we feel that the market is going to be very choppy, and probably just simply go back and forth in general.

Forecast

The AUDUSD pair fell during the course of the week, slicing below the 0.70 level. However, the market found quite a bit of support below there, as we bounced back above that level. With that being the case, it looks like the market is not ready to break down significantly yet, but we must certainly have a resistive candle from the previous week. With this pair we do not see longer term trading and so we will be short term trades if we get opportunity.

USD/JPY

USDJPY initially tried to rally during the course of the session on Friday, but fell back into the previous consolidation area in the form of the triangle. That being the case, we have a market that tried to break out but failed. If we can break out above the top of the shooting star though, the market should continue to go much higher. At that point time we would not hesitate whatsoever to start buying. We are not sellers until we get below the 118.50 level.

Forecast

The USDJPY pair initially broke out above the top of the triangle that the market has been stuck in for quite some time. However, by the end of the week we closed back within the parameters all that triangle, and that of course means that we are not ready to go higher. If we can break above the top of the shooting star that form for the week, we believe that’s a very bullish sign. As far selling is concerned, it’s almost impossible to do until we get below the 118.50 level.

COMEX and FOREX Technical Review

Posted: September 22, 2015 in Commodity Tips, Forex

GOLD
Gold markets rose initially during the course of the session on Monday, but found the $1140 levels to be bit too resistive, and turned things around from there to form a fairly bearish candle by the end of the session. With this in mind, we expect the market to move around $1130 levels on Tuesday also. We would be sellers on every rally that show signs of weakness. We have no Interest in buying this market until it breaks the $1160 levels, as there is too much resistance all the way upto $1160 levels.
SILVER
Silver Markets pulled back slightly at the opening of the session on Monday, and then turned back around to form a bit of a hammer. With this being the case, it looks as if the markets will try and move towards the $15.50 levels which has been quiet resistive in the past. We have no real interest in selling, simply because this market seems to be rather resilient and has started showing signs of strength following the formation of the hammer. However, we have no interest whatsoever in selling this market as it has been so strong recently and $15 levels has been quiet tough for this market to break.
CRUDE
The light sweet crude market rose during the course of the session on Monday, proving the importance of $44 levels as a support. This market has now been consolidating between $44 and $48 levels for quiet some time now. We now believe that short-term pullbacks will provide good buying opportunities, and ultimately the market will take a breakout above $48 levels. In the meantime we expect this market to be a lot volatile. With this being the case, we have no interest in selling, as we understand the fact that, any pullback will simply be a buying opportunity in this market.
EUR/USD
EURUSD fell during the day on Friday. The pair is in the down trend and we do not see any recent support down there. Once we get below 1.1140 level we can land up somewhere around 1.1015 level. With the next daily candle we may get to see some some buyers probably. For longer term, below 1.11 level is a clear bearish market.
GBP/USD
GBPUSD fell during the day. We believe that the market is trying to reach below 1.53 level. With the next daily candle we are again sellers in this market. Probably, if we break below 1.53 we can head up to 1.52 level.
AUD/USD
AUDUSD fell during the course of the day on Monday. The market may continue to drift down to 0.70 level with the next daily candle. We do not see buyers to enter into this market so we are selling this pair. On the daily chart, we see a clear rounding top and so we are definitely sellers and expect to reach 0.68 level.
NZD/USD
NZDUSD is consolidating within a range between 0.6330 to 0.6300. We believe 0.6295 we are surely sellers as the pair in in the longer term down trend. With the next daily candle we are again sellers in this market and once we get below 0.6200 level we may head down to 0.60 level.

Market Review for KLCI: The FTSE Bursa Malaysia Kuala Lumpur Composite index lost 4.10 points or 0.25% on Tuesday. The Finance Index fell 0.45% to 14189.02 points, the Properties Index up 0.24% to 1158.54 points and the Plantation Index down 0.15% to 6994.46 points. The market traded within a range of 13.17 points.
The KLCI closed down at 1635.37 points more than one-week low as Southeast Asian stock markets mostly fell. Market sentiment remained bearish after ringgit continues to slide and as crude oil prices dropped.
Market forecast for KLCI: The FBM KLCI index is expected to trade sideways as the investors sentiments can remain cautious after the FED officials comment on the interest rate hike, however if market finds fresh leads in coming session then it may give a positive movement.
KLCI COUNTER SPECIFIC NEWS :

  • External pressures and not public debt are one of the issues that may cause rating agencies to rethink their ratings on Malaysia at present, said Fitch Ratings managing director and global head of sovereign and supranational group.
  • The ringgit opened lower against a rejuvenated US dollar today.
  • Oil markets have seesawed since the beginning of the week, torn between data that points towards a bottoming out of prices following an over 50 percent fall over the last year.
  • Alliance Financial Group Bhd (AFG) is planning to raise RM4 billion from a bond issue for general banking and working capital requirements as well as to finance existing debt redemption.
  • Berjaya Land Bhd saw its net profit for the first quarter ended July 31, 2015 drop 74% to RM9.91 million, from RM37.66 million a year ago, mainly due to higher prize payout coupled with the absorption of Goods and Services Tax (GST) expense, lower revenue from hotels and resorts business and higher finance costs.
  • Affin Hwang has downgraded FGV to Sell form Hold after the recent surge in the company’s share price.

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.

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.