Asia Slides, Shanghai Hits 14-Month Low

The Chinese stock market led the region lower, hitting a 14-month low, as tight liquidity in the local market forced investors to sell to make room for Agricultural Bank of China's initial public offering, potentially the world's largest IPO to date.

The key Shanghai Composite Index [CN;SHI 2427.052 -108.226 (-4.27%)]sank 4.3 percent to 2,427.1 points, its lowest close since April 2009.

The index, one of the world's worst performers, is down about 22 percent so far this quarter and 26 percent for the year.

Institutions will start subscribing to the Shanghai portion of AgBank's dual Shanghai-Hong Kong IPO on Thursday, while retail subscriptions are scheduled for early next week.

Analysts are forecasting AgBank's Shanghai IPO will attract subscription funds of 2 trillion to 3 trillion yuan ($294-441 billion), worsening a shortfall of funds in China's money market.

STI 21 June - Stale Bull?

STI gapped up in the morning at 2862.77 above 2856 and made a bullrun of 50+ points towards the end of the day. Next resistance is 2890 and be cautious if it trades at 2,950 (neckline). Gainers outnumber decliners by 3.5 to 1 in broad market. Overall market volume modest at 882.8 million shares but expected to exceed whole of Friday’s 960.2 million by end of session.

“News of the (RMB) revaluation will help to inject a decent amount of risk appetite into markets across the board,” says Phillip Securities. SIAS Research head Roger Tan expects more upside in coming sessions, “we believe that the STI will continue to strengthen as funds start to window-dress for the mid-year as we approach the end of June.”

Anyway, the market for this week has strong uptrend with few whipsaws (profit taking). Commodity, China plays most resilient in market, with FTSE ST Basic Materials Index +3.0%, FTSE ST China Index +3.6%. Notable gainers in these sectors include Noble Group (N21.SG), +3.3% at $1.90, Olam (O32.SG), +2.7% at $2.67, Wilmar (F34.SG), +2.6% at $5.98, Midas Holdings (5EN.SG), +4.7% at $1.00, China Hongxing Sports (BR9.SG), +4.0% at $0.13.

If you have loaded at the pullback as posted earlier. enjoy the second wave.

Disclaimer applies.

STI 16 June - Waiting for next pull back (profit taking)

Short term bullish trend for STI as it is testing the 2856 resistance. For any buying, wait for a healthy pullback especially yesterday's closing with high volume. Take note of Shipping, Oil/Gas and Commodity counters. Penny counters are also staged for a short run soon.

STI 04 June (Follow up posting)

STI was losing 0.3% at mid day when it rebounded, tested 2,800 and closed high at 2806.51, a good sign that the road to recovery (short term) is imminent following a double bottom formation. Shares are showing triangle patterns which means short term outbreak is possible after last week's major retracement.

Trade with care.

Enjoy the ride if you have loaded.

STI 03 June (possible reversal)

STI climbed 2.4% to 2,793.34 with high volume which is a good sign that market has stabilised for now. Buying Momentum is good today which is expected to carry through the next few days. Bargain hunters who has loaded last week are seeing substantial returns just as the market has flushed out contra and weak punters. Therefore rule of thumb applies to holding power in a bearish market.

Alot of people debated on the recovery of STI in the midst of the crisis but today STI was testing 2,800 resistance and well above 200 MA at 2,784. A double bottom has formed instead of pennent..

Top performers among STI components include Noble Group (N21.SG), +4% at $1.82, NOL (N03.SG), +3.8% at $1.90, UOB (U11.SG), +3.3% at $19.06, OCBC (O39.SG), +3.4% at $8.53.