Jan 10, 2014

    STI slips a day after 30-point gain

    SINGAPORE shares slipped yesterday as investors took some money off the table after bumper gains the day before.

    The benchmark Straits Times Index (STI) fell 5.24 points or 0.17 per cent to 3,145.41, giving up a small part of Wednesday's 29.77-point increase.

    There was not much to push the market in either direction, especially after the mixed session on Wall Street overnight.

    Minutes from the December meeting of the United States Federal Reserve released on Wednesday yielded few surprises.

    Investors had been looking for clues to the thinking of the US central bankers, who last month announced a reduction in the Fed's money-printing.

    "That brings us firmly back to US-data watching," said Rabobank Financial Markets Research after the minutes were released. The US will release its December non-farm payrolls data today.

    On the STI, City Developments Limited (CDL) rose two cents or 0.2 per cent to $9.50.

    In a note on CDL, OCBC Investment Research said: "Flash estimates for the Urban Redevelopment Authority private residential index showed a 0.8 per cent quarter-on-quarter decline in the fourth quarter of last year."

    The index measures private residential property prices.

    OCBC believes home prices will enter bear territory this year and next year, citing the "dual impact" of existing housing curbs and the fact that many new homes are slated to be completed.

    It has a "hold" call and fair value estimate of $9.98 on CDL.

    "While execution from management continues to be spot on and the balance sheet remains strong, we foresee increased uncertainties ahead as (CDL) grapples with weakening fundamentals in its core domestic residential space," said OCBC.

    Fellow developer CapitaLand slipped one cent or 0.3 per cent to $2.97.

    Outside the STI, Keppel Land fell four cents or 1.2 per cent to $3.20.

    Many analysts and strategists continue to speak positively about global stock markets.

    Mr Peter Garnry, head of equity strategy at Saxo Capital Markets, said: "The fourth quarter of last year saw numerous fund managers suggest (global) equities were moving into bubble territory."

    In a note, he said: "While the bull market has been impressive, it has happened against the backdrop of growing cash flow and an expanding global economy."

    Mr Garnry argued that global shares remain slightly below the average valuation since 1996.

    "In our view, global equities are clearly not in a bubble."