By R SIVANITHY
SENIOR CORRESPONDENT
INDEX watchers have every reason to be grateful for a sudden renaissance in Singapore Telecom's shares - it was largely thanks to the latter's 10-cent surge to $3.08 that the Straits Times Index's loss yesterday was limited to only 36.66 points at 2,865.14.
Had it not been for speculation that SingTel's Australian operations have turned the corner, the index's loss would have been a much more severe 45 points since SingTel's rise propped the index up by just under 9 points.
Then again, it looks like with the speculative fever currently coursing through the market's veins, large moves for the index have become relatively commonplace - had such a loss occurred yesterday, it would have been the third time the index moved by almost 50 points in less than two weeks.
The first was on Tuesday, Nov 28, when the STI lost 53 points in response to an alarming slide on Wall Street and the second came on Tuesday this week when a sudden rush into the banks (mainly OCBC) sent the index up 51 points past 2,900. 'Volatility and, therefore, risks have gone up sharply in recent weeks,' noted a dealer. 'At these levels, the emotions of greed and fear are at their extremes.'
Still, even with yesterday's alarming loss, the index managed a 28-point or one per cent rise over the week. Weakness yesterday came about because of a selling wave that swept through regional markets and extended into Europe when the latter opened in the late afternoon.
The mid-week push on the banks - and, to a lesser extent, property - probably came about because of yesterday's announcement of the winner of the Sentosa integrated resort licence. As it turned out, Genting's win could mean pressure on CapitaLand, which was widely tipped as a winner.
Elsewhere in the property segment, players clearly switched out of almost all the currently listed Reits (real estate investment trusts) to buy into the latest, CapitaRetail China Trust (CRCT). Offered at $1.13, CRCT closed at $1.80 with 117.4 million units traded while the likes of Ascendas Reit dropped 6 cents to $2.44, CapitaComm Trust lost 19 cents to $2.40, and CapitaMall Trust lost 12 cents to $2.70.
Meanwhile, the week was also notable for the fact that China stocks hardly featured - except perhaps towards the downside - and that more houses are upgrading the tech sector. Credit Suisse, for instance, mid-week called for an overweight on the Asian tech sector and OCBC Investment Research yesterday said it is maintaining its 'overweight' on the sector.
'We think that there is still room for appreciation as there are signs of an overall improvement in the industry and the stock prices may not fully reflect these positives. The Semiconductor Industry Association (SIA) is projecting that the industry will continue to ride a strong wave of consumer demand for electronic products. From total global chip sales of US$227.5 billion in 2005, the SIA is projecting sales to hit US$321 billion in 2009, or a 9 per cent CAGR over 2006-2009.'
