4july2008

Hong Kong dry-bulk shipping line company Maritime Capital Shipping has
decided not to proceed with an initial public offering (IPO) in the Singapore Stock Exchange due to weak sentiment for the Singapore stock market in recent weeks.

A report quoted the CEO of Maritime Capital Mr. Mark Harris saying “The performance of the global equity markets has deteriorated sharply in the last few days and equity markets have closed for IPOs, regardless of the underlying fundamentals of the company.” Mr. Harris did not say when or whether the company might reconsider listing plans.

After witnessing the “failure” of some of the recent IPOs in Singapore share market, most investors would find it hard to jump into another IPO. Most recent Singapore IPOs have tanked on day one of listing and are still trading below their respective IPO prices. The last count is that 15 of the 18 new companies whose shares are listed in the Singapore stock exchange this year are now trading below their offer prices.

After the recent sell off in the broad market, some recent IPOs are trading at 3-4 times FY08 earnings…….it’s no wonder new IPOs are finding hard convincing investors to subscribe to them at 4-5 times FY07 earnings.

If you are value investors, do some homework yourself on some of the recent IPOs where stock prices have fallen to 3-4times FY08 earnings. Monitor their 2Q08 results and track if these companies are on track to meet consensus estimates or the forecast FY08 earnings given during IPO. If they are on track, then the next question is WHEN is the right time to accumulate …….this is when Mr. Chart’s technical indicators and analysis come into play

Happy Hunting!

Singapore share market update 2july2008

Broad Market sentiment based on technical analysis

many hot stocks (eg ferrochina, sino environment, china hongxing, mercator, china milk, celestial)  have broken their recent support levels over the past two days - this is what i would consider a “group breakdown” signal.

as opposed to “group breakout” signal which is positive, “group breakdown” is a negative signal, and in my analysis i usually used one technical indicator called parabolic SAR.  if you look at the stock chart, say using metastock or other charting software, you can see that ferrochina parabolic SAR turned negative on 27th june, china hongxing turned negative on 1july, celestial on 1july, china milk on 30th june, china XLX on 27th june and sino env as early as on 9 june…….so there bearish parabolic SAR signals is across the board.

so it should not came as a total surprise that yesterday and today (2july) that we continue to see renewed selling pressure in the singapore share market.

Watch out for potential rebound as we move closer to 15 July

the question next is when do we expect to see a possible technical rebound (bear in mind that we are likely still stuck in a downtrend so any rebound is considered a technical rebound for many stocks)……i personally think based on last quarter market behavior, when the sell down continued until 15 april ie 45 days after march end financial reporting period, this time round, i would expect market to stabilized around 15 july again 45 days after the june end financial reporting period…… just in time for a rebound ahead of the release of  2Q08 results.

In the mean time, either you continue to look for potential short ideas or play online games to pass time.

cheers

rooney

 dow jones looking better in the near term - hope that it will give some power to singapore market too

As i said on friday morning, i was looking forward to a technical rebound for some of the s-chips or china companies listed in the singapore stock exchage but that failed to materialize……i did not act on friday cos one of the main criterias which is supposed to trigger a buy signal is that prices move above the day high of thursday….most of the stocks i monitor did not have this breakout signal

with dow jones closing up 165 points on friday, i have revisited some of my charts

firstly, dow jones short term chart looks nice, closing at five day high of 12307, above the resistance of 12286 on 11th june with stochastics crossing up in oversold zone, this means there is potential for a bit more upside in the near term (the near term support for down jones is now at 12079 and near term resistance around 12600)

as for some of the hot singapore stocks i monitor, their respective near term resistance are :

sino env - 1.43

ferrochina - 1.29

china milk - 0.785

mercator - 0.49

first resources - 1.17

sinotel - 0.295

oceanus - 0.375

sunvic - 0.375
china hongxing -  0.475

buy signals are triggered if the resistance is broken, but i will cut loss if stock prices close back below the resistance levels

some times, these resistance levels will change the next day depending on stock price behavior so have to check the charts regularly…..this is the pain with short term trading.

cheers

rooney