Hang Hong stocks pared their early losses to close at new high for the third straight day, propelled by the price upsurge of blue-chip Hong Kong Exchange and Clearing.

The benchmark Hang Seng Index opened slightly lower at 25,659. 96 and the momentum remained weak afterwards to fall 63.18 points, or 0.25 percent, to close the morning session at 25,637.95.

But abundant liquidity looking for higher-yielding companies pumped up the Hang Seng Index with a strong comeback shortly after trading was resumed in the afternoon. The blue-chip index rose 142. 65 points, or 0.65 percent, to 25,843.78, after trading between intra-day low 25,554.54 and all-time high 25,893.20 during the session.

Turnover rose to 132.28 billion HK dollars (17.01 billion U.S. dollars) from Thursday's 118.91 billion HK dollars (15.29 billion U.S. dollars)

Friday's advance wrapped up a shining week for Hong Kong's stock market, which advanced 945 points, or 3.8 percent, during the week.

Hong Kong Exchanges and Clearing, the operator of the city's stock and futures exchanges, led the biggest gainers among blue chips. The stock rocketed 12 percent to close at a record 219.20 HK dollars after hitting a record intraday high of 220.60 HK dollars.

The stock's gain pushed up the Hang Seng Index alone by 128.61 points and analysts said the stock will continue to benefit from rising trading volume on the exchanges.

China Mobile, the market's largest stock measured by capitalization, receded 1 percent to 111.6 HK dollars.

HSBC, the market's second largest stock and the city's biggest bank, edged up slightly to 141.6 HK dollars.

Airline industry laggard Cathay Pacific soared 11 percent to 22. 7 HK dollars.

China stocks fared better, with H-share index closing up 141 points at 15,693.

China Eastern Airlines soared 13 percent to 9.72 HK dollars after Thursday's 23 percent surge. China Southern Airlines also jumped 8 percent to 13.9 HK dollars.

Resources sectors continued to outperform on expectation that easing interest rate will fuel global inflation. Zhaojin Mining gained 6 percent to 29.95 HK dollars. Zijing soared 11 percent to12.7 HK dollars. Lingbao also surged 15 percent to 7.25 HK dollars.

PetroChina, the country's largest oil producer, rose 4.7 percent to 12.96 HK dollars, after touching a record intraday high of 13.06 HK dollars, following news that China's securities regulator will hold a hearing Monday on the company's A-share listing application.

PetroChina was the most heavily traded stock on the broader market, with 9.81 billion HK dollars worth of shares changing hands.

Coking coal and coal producer Hidili Industry International Development soared 77 percent from its offering price to 12.12 HK dollars. (7.775 HK dollars = 1 U.S. dollar)

source : xinhua news

BT article on SGX new board :

WHILE the Singapore Exchange (SGX) is on track to make announcements on its new second board, there are concerns that some outfits may find it hard to list if sponsorship is restricted to just a few players.

In May, SGX announced plans to overhaul its junior board Sesdaq to attract small, fast-growing firms from overseas to list here.It aims to transform Sesdaq into a market where professional financial advisers, known as sponsors, will take a key role in the listing process. The sponsors who face strict admission rules will supervise listing aspirants who will not need to formally demonstrate a business track record, SGX said.

Sources say that SGX is targeting the local banks and some of the larger corporate finance outfits such as CIMB-GK Securities to be on the first list of approved sponsors.'There won't be so many players in the first batch. The exchange would prefer to have the more established players first,' a source said. The question is whether this could put the brakes on the growth of the second board. With this approach, some fear that there may not be enough sponsors to meet market needs and that fees will be prohibitively high for smaller companies.

On top of having enough sponsors to handle prospective listings on the junior board, some 159 listings on Sesdaq also need sponsors.

While sources say local banks are keen on sponsoring their clients whom they are already familiar with, they may not embrace non-clients because the effort required to do due diligence checks on them is not compensated by the low sponsorship fees.

According to the proposed rules, sponsors have to be at hand to advise on all listing and corporate governance matters. They also have to monitor their issuers' trading and be alert to any leakage of price-sensitive information.'We will be keen to sponsor our clients because we already know them,' a source from a local bank said. 'We want to grow with them, and sponsoring them is part of the total package of services we offer so that we don't lose them. But for companies who are not our clients, we will be more selective.'

Responding to queries, SGX told BT that it is in the final stage of preparation for the rollout of the new board and that details are expected to be announced before the end of the year.

It also said that it received good response from prospective sponsors.

As to its approach to be selective about the first list of approved sponsors, a source said that SGX wants to ensure that standards of good corporate governance are maintained. 'The exchange is more comfortable with the outfits owned by banks because they have to protect the reputation of the bank. If the smaller houses do something wrong and there's a scandal, they can just close shop,' a source said. Foreign banks, however, are unlikely to be keen to come on board as sponsors, sources say.

'The junior board is for smaller deals and the foreign banks here are just not geared for that,' a source from a foreign bank said. The relatively low fees that foreign banks charge from sponsoring new companies on the junior board will not be enough to cover their costs.

Sources from smaller corporate finance houses want to be included in the action and say that they offer a better deal than the banks who charge higher fees. 'The banks will want to be compensated for taking on the higher risks and work that comes with sponsorship, but if the costs are too high, then it does not make sense to go for a listing on a growth board,' a source said.

At London's growth board, Alternative Investment Market (AIM), firms typically pay 3-5 per cent of the value of the issue in appointing a nominated adviser, or Nomad.

According to the London Stock Exchange website, there are about 70 Nomads.

There are about 30 corporate finance outfits here. The question is how many of them will be allowed to play sponsor.

Stock Market Blog - volatility ahead

Both malaysia and singapore stock markets have rebounded nicely after the big sell down few weeks ago. And now, I think the markets are at a cross road again……..

I expect most markets, including malaysia and singapore stock markets to take their cue from the US market after tonight's much anticipated FOMC rate decision meeting. I was told that most people are expecting a 50 basis point cut. And if that happens, we could see another short term boost in global markets.

Singapore Straits Times Index is now hovering around the 61.8% fibonacci retracement level of about 3500 points since the sell down from 3688 intra day high on 16th july to the intra day low of 2962 on 17th august. So if the 50 basis point cut materilized, STI may well try to retest the recent day high of 3561 and after that the next greater resistance at 3669.

Some "danger" signals to watch out for :

1. candlestick - doji formed on 14th sept is a warning signal of potential reversal signal
2. MACD histogram - forming lower highs while STI higher highs warns of potential weakening momentum
3. stochastics - forming lower highs while STI hit higher highs warns of potential weakening momentum

As for the Kuala Lumpur Composite Index (KLCI ) technical indicators

1. Bollinger band is narrowing - telling us that KLCI may soon experience a sharp move…..either up or down? Maybe depends on US lor i think

2. Parabolic SAR - since turning positive on 21st august, parabolic SAR is narrowing the gap with KLCI and only a fraction away from turning negative

3. Fibonacci retracement - similar to STI, KLCI is also hovering around the 61.8% fibonacci retracement level of around 1290 since rebounding from the day low of 1141 on 17th august. But KLCI seems a bit weaker than STI since it failed to stay above 1290. The recent high of 1305 will be the near term resistance for KLCI.

All eyes on the Feds tonite

And of course what if the Feds disappoint the market by cutting the rate by 25 basis points only, then markets may see another round of correction.

Whatever the case, we will continue to see lots of volatility in the near term.

Be nimble when trading lor.