Monday, 9 July 2018

Education Series: STI End Q2 Quick Observations

Technically this market snapshot is not really end Q2 - its is already one week into July as I wrote this article late.

But market had some big movements on Fri 6 Jul, after latest round of property cooling measures announced on Thursday (5 Jul) night. So i might as well base this article on 5 Jul closing price, to better reflect latest market movement.

Source: Business Times, 7 Jul 2018
Q1 article can be found here.

  1. As of last Friday, there was only one company priced above 75th percentile of its past 52 week price range: Comfort Delgro. There were 5 companies in Q1: CDL, Venture, and the three banks. Venture had since registered a spectacular drop due to trade war fear and worries on tech stocks, while banks and CDL were roiled by the recent property cooling measure. 
  2. There are 17 companies within 25% of their past 52 week low. Among them, Yangzijiang, Sembcorp, Thai Beverage, SGX, and Golden Agri are all very close, or sitting on, their one year low price. 
  3. Looking at year-to-date figures, 20 companies has negative returns. Worst-performing ones are Yangzijiang (-39%), Starhub (-38%), and Hutchison Port (-28%). Same as Q1. 
  4. There is only one company that had positive double digit return this year: Comfort (+18.8%). Second place is Jardine Matherson at 6.7%. 
  5. PE ratio wise, lowest is still Hongkong Land at 3.0; highest is Golden Agri at 59.6. 
  6. PB, lowest is Hongkong Land (0.46), highest is SGX (7.43).
  7. Dividend yield. Excluding Hutchison Port at 10% (due to its history of relentless price slide and decreasing dividends), highest yield is Starhub with 9.5%, although I would be wary about the sustainability of Starhub's yield. 
Clearly market sentiment has soured considerably since Q1 due ongoing trade war fear that has just recently became a reality. Last week's property cooling measures did not help too and could further dampen the stock market in the near term. 

I mentioned in Q1 snapshot that 3,350 was a critical support for STI. It had since been broken and STI had skidded to close at 3,191 last Friday. Applying my very basic Technical Analysis, if the downtrend persist, next support is at around 3,100 where we can see some buying activities. 

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