STI drops, has thin turnover as Christmas and New Year beckon
Index following pattern of annual year-end virtual standstill
The penultimate week of 2016 was not particularly memorable as the Trump-inspired rally of the previous five weeks lost momentum and liquidity drained rapidly away.
Yesterday, the day before Christmas Eve, the Straits Times Index (STI) dropped 10.99 points to 2,871.05, bringing its loss for the week to 66 points or 2.2 per cent.
Turnover was a thin 1.5 billion units worth $593.1 million. Excluding warrants, there were 174 rises versus 216 falls.
To be honest, this is not surprising - the Christmas/New Year holiday period traditionally sees trading wind down to a virtual standstill as traders close their books and depart for their vacations.
There are also uncanny similarities between trading this month and a year ago - daily volume in the final weeks of December 2015 was below $1 billion; the STI traded between 2,815 and 2,880; Noble Group, Ezra and Ezion were regulars in the daily actives lists as they are now; and in mid-December, the US Federal Reserve raised interest rates by 25 basis points as it did 10 days ago.
All these suggest that not much has changed in 12 months, which is perhaps also within expectations, given the weak economic outlook.
Still, despite the lack of performance by blue chips, some small caps have shone.
Together, they averaged a 128.4 per cent total return over the period.” SGX investor education portal My Gateway on the five best-performing FTSE ST Small Cap Index constituents
The Singapore Exchange's (SGX) investor education portal on Thursday reported that for the year to date, the five best-performing constituents of the FTSE ST Small Cap Index were Best World International (+377.5 per cent), Japfa (+96.1 per cent), Geo Energy Resources (+60.7 per cent), Super Group (+56.4 per cent) and PEC (+51.2 per cent).
"These five stocks have a combined market capitalisation of $3.8 billion, and represent 6.3 per cent of the Index. Together, they averaged a 128.4 per cent total return over the period," said My Gateway.
"Three of the five best performers - Best World International, Japfa and Super Group - belong to the Consumer Staples sector, while the other two - Geo Energy Resources and PEC - are from the Energy and Industrial sectors respectively."
Over on Wall Street, observers are pondering the chance that the Dow Jones Industrial Average can close above 20,000 for the first time in history in the remaining days of this year.
US newspaper Barron's on Thursday quoted economic research firm Cornerstone Macro as saying the odds are good.
"The statistics relating to final-five-days-of-the-year performance are as follows for the S&P 500 since 1928 - average return for the last 5 trading sessions of year: 114 basis points, with a standard deviation of 186 bps," it said.
"Average return for all 5-day periods 1928 to 2016: 14.3 bps, with a standard deviation of 262 bps. So… not only is there a higher-than-average return during the last five days (8-fold average return of 114 bps versus 14 bps), there is less variability around the average.
"In addition, the probability of the last five days of the year being positive is 77.3 per cent, compared to a probability of 55.7 per cent for any five-day return."
This article appears in The Business Times today. For full listings of SGX prices, go to http://btd.sg/BTmkts
Markets slide as traders wind down for holiday period
Singapore equities rolled further downhill yesterday as investors wound down for the holidays. Most other markets in Asia finished weaker as well.
The benchmark Straits Times Index (STI) slid 10.99 points, or 0.38 per cent, to 2,871.05 - down 66.81 points or 2.27 per cent for the week, and lower by 0.44 per cent for the year so far. Shanghai fell 0.94 per cent, Hong Kong shaved off 0.28 per cent and Kuala Lumpur eased 0.37 per cent. Tokyo was closed for a holiday.
"Volatility dropped to extremely low levels as markets sank into the holiday mood on the last trading day ahead of Christmas," said Ms Margaret Yang, market analyst at CMC Markets Singapore, noting that trading volumes have also thinned.
"But that couldn't mask the fact that emerging markets are suffering from capital outflows, which is observed in the performance divergence between US equities and Asian equities," she said.
Wall Street retreated 0.12 per cent overnight - though only after having pushed record highs over the last few days in tandem with the US dollar, buoyed by optimism that President-elect Donald Trump's fiscal stimulus policies will help spur economic growth.
"Going into next year, we are confident the dollar will continue to make headway. It will be the currency that appreciates in 2017, it's just a question of how much," Mr Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh, told Bloomberg.
Commodity plays were among the biggest drags on the STI's performance yesterday.
Wilmar International dropped seven cents or 1.9 per cent to $3.59 while Golden Agri-Resources fell half a cent or 1.2 per cent to 42.5 cents.
Keppel Corporation dipped three cents or 0.5 per cent to $5.80. The conglomerate said on Thursday evening that a Keppel Land unit has bought a 50 per cent stake for 250 billion rupiah (S$27 million) in a joint development with a subsidiary of major Indonesian real estate developer Metropolitan Land. The development is in Greater Jakarta.
Some 1.46 billion shares worth just $593.1 million changed hands across the bourse.
The Singapore market is closed on Monday for Christmas.