Mainly mixed trading as momentum falls

Trading of the three local banks dominated proceedings this week as a rush to buy them in the first two days propelled the Straits Times Index to its highest in almost 22 months.

Possibly because it was a case of "too much, too soon" or because investors suddenly realised that the outlook may not be that robust, the momentum faltered in the second half of the week, with the index weakening on Thursday.

Yesterday, it managed a 1.11-point rise to 3,229.73 after dropping into the red for much of the day. For the week, the index gained 54 points or 1.7 per cent.

Turnover yesterday amounted to 4.2 billion units worth $1.2 billion, the unit figure significantly elevated by trading in MDR, which rose $0.001 to $0.007 on turnover of 1.6 billion units. The highest dollar volume was done on Tuesday, when a large play on the banks erupted and drove turnover up to $1.5 billion.

An odd divergence manifested itself throughout the week, the broad market sagging when the index surged, and the broad market firming when the index fell.

Yesterday, this was again apparent when there were 195 rises versus 281 falls, excluding warrants.

The week also saw the Catalist debut of Johor-based Capital World, an integrated property developer that focuses on working with landowners on a joint venture basis to enhance the value of the landowner's land asset. It was listed after a reverse takeover of marble producer Terratech Group.

"Through such joint ventures, Capital World undertakes the conception, design and implementation of integrated property development projects, while minimising capital outlay for the acquisition of land banks," said the Singapore Exchange (SGX) in a news release.

The ratio of upward earnings revisions is highest in Europe and Japan, and lower in the US and emerging markets - though they are still good by historical standards. Mr Marco pirondini, executive vice-president and head of US equities for pioneer investments

The stock finished trading yesterday at $0.182 on volume of 26.3 million.

Among other news of interest was that SGX has issued a public reprimand to mail operator SingPost for breach of the Listing Rules when disclosing the 2014 purchase of UK freight forwarding firm FS Mackenzie, while Sembcorp Industries' announcement of a strategic review of its business sent its shares and those of Sembcorp Marine surging.

On the outlook for global equities, Mr Marco Pirondini, executive vice-president and head of US equities for Pioneer Investments, in his May 4 What's Driving Global Equities? Earnings and Politics note, said although geopolitical risks are rising because of European elections and tough talk from North Korea, for equity investors, something important is happening to global earnings: they are also on the rise.

"Not only are they up, but earnings revisions, an important forward indicator, are also increasing.

"Even more interesting is that, for the first time in years, the relationship between earnings upgrades and downgrades is better for international equities than for US equities, according to Bloomberg data," said Mr Pirondini.

"The ratio of upward earnings revisions is highest in Europe and Japan, and lower in the US and emerging markets - though they are still good by historical standards."

This article appears in The Business Times today. For full listings of SGX prices, go to btd.sg/BTmkts