STI down for 7th straight session

pub_date:Banks lead falls this time; index loses 128 points for the period, 3.文件倉4% deficit for the yearTHE Straits Times Index yesterday dropped for the seventh consecutive session, this time losing 20.98 points to close at 3,060.74. This brings the total loss for the seven trading days to 128 points or 4 per cent and its loss for 2013 to 3.4 per cent.This time it was the banks which led the decline, while close behind were stocks from the Jardine group and property counters. Turnover in the 30 STI components amounted to $684 million, which was 68 per cent of the total $1.06 billion done by the whole market. Excluding warrants, there were 106 rises versus 289 falls.There was no new theme for the selling. Dealers said the market continued to be weighed down by the same reasons that have led most Asian markets lower over the past 2-3 months, namely the US Federal Reserve tapering its money printing and slowing growth led by China.These concerns have led most investment houses to recommend a "buy" on developed markets which are expected to lead global growth next year. Most of these recommendations, while rating Wall Street and Europe as an "overweight", have also rated Asia as an "underweight".In keeping with a well-established pattern in the local market, the bulk of the actives list yesterday were penny speculatives priced below 10 cents. Most finished weaker though recent penny leader Albedo did manage a 0.9 cent or 21 per cent jump to 5.2 cents on volume of 354 million. Albedo's turnover was 25 per cent of the 1.4 billion units traded by the whole market.In the second line, Ausgroup's shares slumped 2 cents to 23 cents with 6.6 million traded. The company announced on Tuesday that it has work in hand worth A$219 million and that it is in存倉confidential discussion with a number of parties on potential funding after recent problems with its banks.In response, OSK DMG issued a "sell" on the stock. "We are negative on Ausgroup for its increased insolvency risk as banks have pulled their lines, while its work in hand is unprofitable, in our view. The A$219 million orderbook is insufficient for even two quarters of breakeven performance. Maintain 'sell', with a lowered 21 cents target price, based on 0.65x FY14F P/BV (forecast price/book value)," said the broker.In his Outlook 2104: Emerging Markets, Schroders head of emerging market (EM) equities Allan Conway said global emerging markets (GEMs) have underperformed developed markets for the past three years due to a combination of weaker-than-expected economic growth and earnings, a strong dollar and more recently, concerns over the potential ramifications of policy stimulus tapering in the US."These factors have led some commentators to suggest that the positive structural story for EMs is over. We would strongly disagree with this view," said Mr Conway, adding that although the short-term outlook is uncertain, the outlook for GEMs is extremely positive. "In our opinion . . . the structural case for GEMs is intact, valuations are attractive and profit margins/earnings have room to surprise on the upside," said Mr Conway.In its daily notes, financial research firm Ideaglobal said it expects US growth to be 3 per cent next year and for unemployment, currently 7 per cent, to fall below this level well before the middle of the year."The Fed will gradually remove QE (its monetary stimulus) over a 9-month span and will have started by March . . . the Fed is then likely to start raising rates in the first half of 2015," said Ideaglobal.儲存