Singapore Markets Morning Briefing - what you need to know for Fri May 11, 2012
There were gains on Wall Street but declines in profits among stocks in Singapore could be worrisome to traders.
OCBC Investment Research said:
With most US stocks halting their decline overnight and the Nikkei index having a positive start (+0.4% now), these are likely to offer further relief to the local bourse this morning.
The STI had managed to hold its ground at the 2900 key resistance-turned-support yesterday; despite opening 0.2% lower, the index rebounded to a 0.1% gain by the close.
With today's tone likely to show further improvement, we could see the index recovering in the direction of the 2950 immediate resistance (support-turned-resistance).
Beyond that, the subsequent obstacle still lies at the 3010 resistance (various peaks). Meanwhile, the secondary support is located at the 2852-2860 gap support.
IG Markets Singapore meanwhile noted:
Big drops in profits among some of Singapore’s most loved stocks will be a concern to traders worried about the resilience of the local economy to weather the global storm.
To add to a growing list of under-achievers releasing poor Q1 earnings are Noble, City Development and Genting.
They join the likes of Singapore Airlines and Wilmar which yesterday also disappointed investors.
Commodity giant Noble has seen profits fall 46%, joining rival Wilmar which saw its Q1 profits slump this week. Property developer City Developments posted a 45% drop in profits, although this was skewed by a one-time gain for Q1 2011.
More bad news came from gambling firm Genting, a long-time investor favourite, which saw profits plummet 33% due to lower gambling revenues.
These poor results are likely to weigh heavily on traders’ minds this morning who are still digesting an eventful week of panic-stricken trading as the future of the eurozone hangs in the balance.
Thankfully, last night Wall Street got down to business and put on some mild gains as we enter the final day of trading this week.