Singapore Market - Sentiments Likely To Improve

Singapore:
Market rebounded with low volume after a surged inthe US on Thursday night. Similar to the Wall Street, investors were bargain hunting for blue chips. This had led to a rise in STI while the FTSE Mid Cap, Small Cap and Fledgling indices all suffered loses.

The STI rose 29.52 points or 1.2% to close the week at 2,570.67. For the week, the STI fell slightly by 3.54 points or 0.1%. Volume fell with 0.95 billion shares worth S$1.10 billion transacted.

Despite the gain in the benchmark index, losers led gainers 277 to 219.


Wall Street:
Wall Street closed mixed with all eyes focused onLehman Brothers next move. After the Bear Sterns and Fannie-Freddie near collapse and rescue plans in March and early September, investors preferred to apply a wait-and-see attitude towards Lehman.

This had led to a two days surge in the Dow on Wednesday and Thursday followed by a small decline on Friday, despite disappointing results and restructuring plans announced by Lehman on Wednesday.

The Dow fell marginally by 11.72 points or 0.1% to close the week at 11,421.99 while the tech-heavy Nasdaq rose 3.05 points or 0.1% to 2,261.27. Light sweet crude up slightly by US$0.31 to close NYMEX at US$101.18.


Outlook:
Market is likely to remain volatile in response to majorannouncements this week. Investors' focus will be on the US financial institutions, with Lehman Brothers likely to file for bankruptcy and the results announcements of Goldman Sachs on Tuesday and Morgan Stanley on Wednesday.

The US Federal Reserve Open Market Committee meetings on Tuesday will also be closely watched. Although we do not expect a rate cut, the Fed could possibly hint a cut in future meeting.

On the local front, the URA is to announce the New Home Sales number for August. As August is traditional a slow month as it landed in the Chinese Ghost month, we expect sale to be slowed from the near 900 units in July to about 600 to 700 units. This should provide some support for the dampened property stocks.

The other important local released for this week is the non-oil domestic exports number for August, to be announced on Wednesday. Although not much attention has been paid to the non-oil domestic exports number in the past, the current number will be closely watched given that most Singapore economists have downgraded their economic outlook given the lacklustre numbers in the past four months.

While market could continue to be depressed by the current uncertainty, any positive development in any the above events could turn the market around.