BT: H1 slump wipes $120b off market cap (01 Jul 2008)
H1 slump wipes $120b off market cap
SGX the biggest loser in dollar terms, down $6.9b to $7.37b
By LYNETTE KHOO
(SINGAPORE) It is a sea of red as a slate of listed companies took a battering from the volatile market and chalked up falls in market value as the year hits half-time.
Since January, the market slump has sliced $120.4 billion or some 15 per cent from the total market capitalisation of the Singapore bourse to $677.4 billion.
Yesterday, the benchmark Straits Times Index shed another 8.37 points to 2,947.54, bringing its losses to 15 per cent over the first half of this year.
'We probably have come to a stage when trading turnover is pretty low,' said UOB KayHian dealing director Chan Tuck Sing. 'In the second half, if we do see some improvement in global economic statistics and if commodity prices start to retreat, we will see more activity in equities.'
In the second quarter, average traded volume was more than halved from a year ago to about 1.5 billion, and slid some 13 per cent from a quarter ago.
Reflecting the declining trading volumes and values, the stock of Singapore Exchange - the biggest loser in absolute dollar terms - saw some $6.91 billion being wiped off its market value since the beginning of the year to $7.37 billion at end-June.
The second biggest loser was Singapore Telecommunications, which lost $6 billion of its market value to $57.6 billion. Cosco Corp, which was troubled by contract concerns after its cancellation of a US$202 million project in April, saw its market value fall by some 44.6 per cent to $7.17 billion.
Related link:
Click here for the market cap of all SGX-listed companies
Other Singapore-listed Chinese shares or S-shares mostly chalked up double-digit declines in market values in the first half of this year, hurt by the major sell-off in the mainland Chinese markets as well as concerns over rising costs.
Bucking the trend, Noble Group topped the gainers in dollar terms, with its market value growing by $1.5 billion or 23.7 per cent to $7.8 billion, possibly riding on the commodity story. The dry bulk carrier saw tonnage volume rise 56 per cent and net profit quadruple to a record US$167 million in the first quarter.
Brokers noted that while stocks may have turned less expensive, market risks have become greater than the perceived value, prompting investors to stay on the sidelines.
'The market is telling us that the risks are still higher than what the growth potential these companies can offer,' said a local broker.
In terms of share price, much movements have been a result of corporate activity, dealers noted.
For instance, Straits Trading's share price surged on the back of a takeover battle between Tecity and OCBC's Lee family that eventually saw the former as the new controlling shareholder.
Shares of Chinese steel maker Delong Holdings - which were stoked by the offer by UK-listed Evraz Group SA in February to acquire up to a 51.05 per cent stake for $3.9459 a share - jumped from $2.04 at end-December to $3.17.
Property counters City Developments and Guoco- land took major losses in their share prices in the year to date, losing their shine amid the softness in the residential market.
Mr Chan of UOB KayHian observed that stocks that have proved more resilient than the broader market have been blue chips or illiquid stocks that are seeing less volatility simply because of their low trading volumes.
'Investors are switching into quality,' he said. Institutional investors or funds that stay invested in the market have helped create trading activities for the blue chips, he added. Retail investors who are mainly interested in second-liners and S-shares have been sidelined by market volatility.'
Exchange traded funds (ETFs) which offer direct exposure to the commodities boom have also seen a surge in share prices. Gold 10US$, formerly known as StreetTracks Gold Shares, and Lyxor Commodities CRB Fund 10 have jumped 16.4 per cent and 50 per cent respectively so far this year.
'The prices are moving as a reflection of the underlying but they are still traded at a discount,' Mr Chan said. The Gold 10US$ is currently traded at a discount to the spot market.
Analysts told BT that further downside in the stockmarket is probably to be expected given the persisting concerns over the global economy and inflationary outlook.
Market sentiment is likely to remain negative in the second half as corporate earnings 'start to mirror the harsh impact of inflation,' said Kim Eng regional head of research Stephanie Wong.
But although it is unclear if the market has hit bottom, analysts say this need not stop investors with a longer-term view to go bottom fishing selectively.
'As Singapore is structurally still healthy, we expect longer-term investors to continue to invest in Singapore and investors with a longer-term investment time frame should use this uncertain period to buy into some of the key proxy plays into the Singapore economy,' said Carmen Lee, research head at OCBC Investment Bank.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
SGX the biggest loser in dollar terms, down $6.9b to $7.37b
By LYNETTE KHOO
(SINGAPORE) It is a sea of red as a slate of listed companies took a battering from the volatile market and chalked up falls in market value as the year hits half-time.
Since January, the market slump has sliced $120.4 billion or some 15 per cent from the total market capitalisation of the Singapore bourse to $677.4 billion.
Yesterday, the benchmark Straits Times Index shed another 8.37 points to 2,947.54, bringing its losses to 15 per cent over the first half of this year.
'We probably have come to a stage when trading turnover is pretty low,' said UOB KayHian dealing director Chan Tuck Sing. 'In the second half, if we do see some improvement in global economic statistics and if commodity prices start to retreat, we will see more activity in equities.'
In the second quarter, average traded volume was more than halved from a year ago to about 1.5 billion, and slid some 13 per cent from a quarter ago.
Reflecting the declining trading volumes and values, the stock of Singapore Exchange - the biggest loser in absolute dollar terms - saw some $6.91 billion being wiped off its market value since the beginning of the year to $7.37 billion at end-June.
The second biggest loser was Singapore Telecommunications, which lost $6 billion of its market value to $57.6 billion. Cosco Corp, which was troubled by contract concerns after its cancellation of a US$202 million project in April, saw its market value fall by some 44.6 per cent to $7.17 billion.
Related link:
Click here for the market cap of all SGX-listed companies
Other Singapore-listed Chinese shares or S-shares mostly chalked up double-digit declines in market values in the first half of this year, hurt by the major sell-off in the mainland Chinese markets as well as concerns over rising costs.
Bucking the trend, Noble Group topped the gainers in dollar terms, with its market value growing by $1.5 billion or 23.7 per cent to $7.8 billion, possibly riding on the commodity story. The dry bulk carrier saw tonnage volume rise 56 per cent and net profit quadruple to a record US$167 million in the first quarter.
Brokers noted that while stocks may have turned less expensive, market risks have become greater than the perceived value, prompting investors to stay on the sidelines.
'The market is telling us that the risks are still higher than what the growth potential these companies can offer,' said a local broker.
In terms of share price, much movements have been a result of corporate activity, dealers noted.
For instance, Straits Trading's share price surged on the back of a takeover battle between Tecity and OCBC's Lee family that eventually saw the former as the new controlling shareholder.
Shares of Chinese steel maker Delong Holdings - which were stoked by the offer by UK-listed Evraz Group SA in February to acquire up to a 51.05 per cent stake for $3.9459 a share - jumped from $2.04 at end-December to $3.17.
Property counters City Developments and Guoco- land took major losses in their share prices in the year to date, losing their shine amid the softness in the residential market.
Mr Chan of UOB KayHian observed that stocks that have proved more resilient than the broader market have been blue chips or illiquid stocks that are seeing less volatility simply because of their low trading volumes.
'Investors are switching into quality,' he said. Institutional investors or funds that stay invested in the market have helped create trading activities for the blue chips, he added. Retail investors who are mainly interested in second-liners and S-shares have been sidelined by market volatility.'
Exchange traded funds (ETFs) which offer direct exposure to the commodities boom have also seen a surge in share prices. Gold 10US$, formerly known as StreetTracks Gold Shares, and Lyxor Commodities CRB Fund 10 have jumped 16.4 per cent and 50 per cent respectively so far this year.
'The prices are moving as a reflection of the underlying but they are still traded at a discount,' Mr Chan said. The Gold 10US$ is currently traded at a discount to the spot market.
Analysts told BT that further downside in the stockmarket is probably to be expected given the persisting concerns over the global economy and inflationary outlook.
Market sentiment is likely to remain negative in the second half as corporate earnings 'start to mirror the harsh impact of inflation,' said Kim Eng regional head of research Stephanie Wong.
But although it is unclear if the market has hit bottom, analysts say this need not stop investors with a longer-term view to go bottom fishing selectively.
'As Singapore is structurally still healthy, we expect longer-term investors to continue to invest in Singapore and investors with a longer-term investment time frame should use this uncertain period to buy into some of the key proxy plays into the Singapore economy,' said Carmen Lee, research head at OCBC Investment Bank.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
posted by mrmoon at 6:38 AM
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