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Friday 21 November 2008
Singapore Shares End Higher On Rebound, But Rally Likely Brief
Singapore’s stock market followed its Asian peers in recovering from early falls Friday, but analysts dismissed the gain as a technical rebound that isn’t likely to last.
Singapore Shares End Higher On Rebound, But Rally Likely Brief
21 November 2008
SINGAPORE (Dow Jones) – Singapore’s stock market followed its Asian peers in recovering from early falls Friday, but analysts dismissed the gain as a technical rebound that isn’t likely to last.
The Straits Times Index closed up 3%, or 48.15 points, at 1662.10 points. In the broader market, winners outnumbered losers 254 to 170. Volume was 1.2 billion shares, up from 951 million shares Thursday.
Reasons for the rebound around the region weren’t clear, especially in Singapore, where the government released final third-quarter gross domestic product figures confirming the island has entered into a recession that could last through 2009.
Some traders said markets were supported by expectations of further stimulus moves by China over the weekend, while others cited a potential sale of Citigroup or parts of the giant firm as a healthy move for the troubled banking industry.
Some, however, dismissed the rally as a short-lived technical rebound not connected to any news.
“Nothing has changed on the fundamentals, it’s just a technical rebound like we’ve seen before,” said AmFraser senior vice president of equity sales, Gabriel Gan.
Big gainers of the day included companies that had seen their shares beaten down recently.
Developers CapitaLand and City Developments closed up 6.6% and 5.3% at S$2.60 and S$5.60, respectively. Their shares have fallen sharply on fears that the property market will cool down sharply next year on lack of demand.
Shares of banks DBS, UOB and OCBC also rose, with some analysts pointing to a S$2.3 billion fiscal stimulus package announced by the government earlier Friday to provide local businesses with access to more credit. To encourage more bank loans, the government from Dec. 1 will increase its share of the risk of loan defaults and extend financing schemes to all local companies.
“This is clearly sending a strong message to the corporate sector that the government is prepared to help,” said Nomura strategist Jit Soon Lim.
DBS closed up 4.8% at S$9.60, while UOB ended at S$11.70, up 2.6%. OCBC finished up 2.2% at S$4.60.
Asian Stocks Rise, Snapping 4-Day Decline; HSBC, Fortescue Gain
By Kyung Bok Cho and Ian C. Sayson 21 November 2008
(Bloomberg) -- Asian stocks rose for the first time in five days, led by finance companies, on speculation governments will step up efforts to revive economies and after the Wall Street Journal reported Citigroup Inc. may be sold.
HSBC Holdings Plc gained 4.5 percent after Hong Kong’s monetary authority said China branches of the city’s banks can receive liquidity from the mainland’s central bank. Mizuho Financial Group Inc., Japan’s second-largest bank, climbed 10 percent on optimism a merger between Citigroup and a rival will help shore up the financial system. Fortescue Metals Group Ltd. jumped 40 percent after reporting a quarterly “trading profit” of A$360 million ($219 million).
“For the global economy, the best stimulus out there is for governments to spend to stimulate their respective economies,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila, which has more than $6 billion in trust assets under management. A Citigroup merger would “avert a collapse, which the financial system and investors wouldn’t want to hear at this stage.”
The MSCI Asia Pacific Index added 2.3 percent to 76.91 at 2:38 p.m. in Tokyo, erasing a 2.3 percent retreat. Finance companies were the biggest contributor to the gain. Today’s advance pared the weekly retreat to 7.5 percent.
The index has plunged 51 percent in 2008 as global financial companies’ losses and writedowns from the collapse of the U.S. subprime-mortgage market neared $1 trillion, eventually toppling Lehman Brothers Holdings Inc. Rallies have fizzled – most recently a 25 percent gain posted in the seven trading days following Oct. 27 -- as the economies of the U.S., Japan and the euro-zone entered recession.
Stimulus Measures
Japan’s Nikkei 225 Stock Average added 1.6 percent to 7,826.39, with most markets in the region reversing earlier declines. South Korea’s Kospi index advanced for the first time in nine days, rising 5.4 percent, while Hong Kong’s Hang Seng Index gained 4.5 percent.
Futures on the U.S. Standard & Poor’s 500 Index advanced 2.1 percent. U.S. stocks tumbled yesterday, with the S&P 500 dropping 6.7 percent to its lowest in 11 years, as economic data pointed to a worsening recession and lawmakers postponed a vote on a plan to salvage the auto industry.
HSBC added 4.5 percent to HK$79. China Construction Bank Corp., the nation’s second-largest, surged 6.7 percent to HK$3.83 in Hong Kong.
China branches of Hong Kong banks can pledge collateral to receive cash from the mainland’s central bank if needed, Joseph Yam, Chief Executive of the city’s monetary authority, said today.
City Developments Ltd., Singapore’s second-largest developer by assets, added 3 percent to S$5.48 after the nation said it will extend more loans to local companies.
Citigroup Merger?
Mizuho Financial Group Inc., which invested in Merrill Lynch & Co. in January, rallied 10 percent to 219,100 yen. Woori Finance Holdings Co., owner of South Korea’s second-biggest bank, rose 6.9 percent to 5,400 won.
Citigroup, whose shares fell a record 26 percent yesterday, is considering selling off assets or the whole company, the Journal reported. The board of directors will meet later today to discuss options, the newspaper said. Shares of the bank, which reported $20 billion in losses during the last four quarters, have fallen 50 percent this week.
Executives at Citigroup aren’t actively exploring a sale or breakup of the U.S. bank in response to pressure from shareholders and analysts to boost its share price, the New York Times reported, citing two people with direct knowledge of the discussions.
Citigroup spokesman Richard Tesvich wasn’t immediately available to comment.
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Singapore Shares End Higher On Rebound, But Rally Likely Brief
21 November 2008
SINGAPORE (Dow Jones) – Singapore’s stock market followed its Asian peers in recovering from early falls Friday, but analysts dismissed the gain as a technical rebound that isn’t likely to last.
The Straits Times Index closed up 3%, or 48.15 points, at 1662.10 points. In the broader market, winners outnumbered losers 254 to 170. Volume was 1.2 billion shares, up from 951 million shares Thursday.
Reasons for the rebound around the region weren’t clear, especially in Singapore, where the government released final third-quarter gross domestic product figures confirming the island has entered into a recession that could last through 2009.
Some traders said markets were supported by expectations of further stimulus moves by China over the weekend, while others cited a potential sale of Citigroup or parts of the giant firm as a healthy move for the troubled banking industry.
Some, however, dismissed the rally as a short-lived technical rebound not connected to any news.
“Nothing has changed on the fundamentals, it’s just a technical rebound like we’ve seen before,” said AmFraser senior vice president of equity sales, Gabriel Gan.
Big gainers of the day included companies that had seen their shares beaten down recently.
Developers CapitaLand and City Developments closed up 6.6% and 5.3% at S$2.60 and S$5.60, respectively. Their shares have fallen sharply on fears that the property market will cool down sharply next year on lack of demand.
Shares of banks DBS, UOB and OCBC also rose, with some analysts pointing to a S$2.3 billion fiscal stimulus package announced by the government earlier Friday to provide local businesses with access to more credit. To encourage more bank loans, the government from Dec. 1 will increase its share of the risk of loan defaults and extend financing schemes to all local companies.
“This is clearly sending a strong message to the corporate sector that the government is prepared to help,” said Nomura strategist Jit Soon Lim.
DBS closed up 4.8% at S$9.60, while UOB ended at S$11.70, up 2.6%. OCBC finished up 2.2% at S$4.60.
Asian Stocks Rise, Snapping 4-Day Decline; HSBC, Fortescue Gain
By Kyung Bok Cho and Ian C. Sayson
21 November 2008
(Bloomberg) -- Asian stocks rose for the first time in five days, led by finance companies, on speculation governments will step up efforts to revive economies and after the Wall Street Journal reported Citigroup Inc. may be sold.
HSBC Holdings Plc gained 4.5 percent after Hong Kong’s monetary authority said China branches of the city’s banks can receive liquidity from the mainland’s central bank. Mizuho Financial Group Inc., Japan’s second-largest bank, climbed 10 percent on optimism a merger between Citigroup and a rival will help shore up the financial system. Fortescue Metals Group Ltd. jumped 40 percent after reporting a quarterly “trading profit” of A$360 million ($219 million).
“For the global economy, the best stimulus out there is for governments to spend to stimulate their respective economies,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila, which has more than $6 billion in trust assets under management. A Citigroup merger would “avert a collapse, which the financial system and investors wouldn’t want to hear at this stage.”
The MSCI Asia Pacific Index added 2.3 percent to 76.91 at 2:38 p.m. in Tokyo, erasing a 2.3 percent retreat. Finance companies were the biggest contributor to the gain. Today’s advance pared the weekly retreat to 7.5 percent.
The index has plunged 51 percent in 2008 as global financial companies’ losses and writedowns from the collapse of the U.S. subprime-mortgage market neared $1 trillion, eventually toppling Lehman Brothers Holdings Inc. Rallies have fizzled – most recently a 25 percent gain posted in the seven trading days following Oct. 27 -- as the economies of the U.S., Japan and the euro-zone entered recession.
Stimulus Measures
Japan’s Nikkei 225 Stock Average added 1.6 percent to 7,826.39, with most markets in the region reversing earlier declines. South Korea’s Kospi index advanced for the first time in nine days, rising 5.4 percent, while Hong Kong’s Hang Seng Index gained 4.5 percent.
Futures on the U.S. Standard & Poor’s 500 Index advanced 2.1 percent. U.S. stocks tumbled yesterday, with the S&P 500 dropping 6.7 percent to its lowest in 11 years, as economic data pointed to a worsening recession and lawmakers postponed a vote on a plan to salvage the auto industry.
HSBC added 4.5 percent to HK$79. China Construction Bank Corp., the nation’s second-largest, surged 6.7 percent to HK$3.83 in Hong Kong.
China branches of Hong Kong banks can pledge collateral to receive cash from the mainland’s central bank if needed, Joseph Yam, Chief Executive of the city’s monetary authority, said today.
City Developments Ltd., Singapore’s second-largest developer by assets, added 3 percent to S$5.48 after the nation said it will extend more loans to local companies.
Citigroup Merger?
Mizuho Financial Group Inc., which invested in Merrill Lynch & Co. in January, rallied 10 percent to 219,100 yen. Woori Finance Holdings Co., owner of South Korea’s second-biggest bank, rose 6.9 percent to 5,400 won.
Citigroup, whose shares fell a record 26 percent yesterday, is considering selling off assets or the whole company, the Journal reported. The board of directors will meet later today to discuss options, the newspaper said. Shares of the bank, which reported $20 billion in losses during the last four quarters, have fallen 50 percent this week.
Executives at Citigroup aren’t actively exploring a sale or breakup of the U.S. bank in response to pressure from shareholders and analysts to boost its share price, the New York Times reported, citing two people with direct knowledge of the discussions.
Citigroup spokesman Richard Tesvich wasn’t immediately available to comment.
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