BT: Market cap dips 2.9% in choppy July (01 Aug 2008)
Market cap dips 2.9% in choppy July
Month saw plantation and agri stocks hit by retreating oil prices
By WONG WEI KONG
THE total market capitalisation of stocks listed on the Singapore Exchange (SGX) fell in July, a month of choppy trading which saw optimism fuelled by the drop in oil prices alternating with fears that the financial crisis in the US might deepen.
At the end of July, total market capitalisation of stocks on the SGX stood at $657.5 billion, $19.9 billion or 2.9 per cent lower than $677.4 billion at the end of June.
This comes after some $120 billion was slashed from the combined market value of companies listed on the SGX in the first six months of the year.
The one thing that stood out in July was the hit plantation, resource and agriculture-related stocks took from retreating oil prices, in a reversal of a trend that had run through the first half of the year.
Wilmar lost 12.8 per cent in market value to finish the month of July with a market cap of $28.2 billion, still the fourth largest stock on the SGX.
Noble saw its market value drop 8.5 per cent to $7.1 billion, while Straits Asia Resources lost 21 per cent of its market cap to finish the month with a market value of $3.04 billion.
National shipping line Neptune Orient Lines (NOL) continued to suffer from poor sentiment over its bid to acquire Hamburg-based Hapag-Lloyd from Germany's TUI Group.
The stock shed 12 per cent of its market cap in July on worries that it might overpay for Hapag-Lloyd, ending the month with a market value of $4.2 billion.
But despite the banking crisis in the US, the three Singapore banks have continued to hold up relatively well, with DBS Group, United Overseas Bank (UOB) and OCBC Bank all enjoying gains in market cap in July.
The banks will be in the spotlight next week, as they report their second quarter and first half earnings.
'Second quarter 2008 results should lead to confidence being restored in the sector,' said JP Morgan in a report.
'The concerns have included substantial further marks on CDOs, asset quality turning dramatically, and market share losses for loans, and margins suffering from low Sibor. Upcoming results should address these to an extent, leading to further outperformance.'
Year to date, Singapore banks have outperformed the MSCI Singapore Index by 12.3 per cent and the MSCI Asia ex Financials Index by 21.4 per cent, according to JP Morgan calculations.
Investors should take advantage of the bear market in financial stocks to buy shares of well-managed banks such as DBS, according to Fortis Investments said.
This is because the global credit crisis is 'half-way through', John Chisholm, Boston-based head of investment specialists in equities at Fortis, which oversees US$7.5 billion of global assets, said in an interview with Bloomberg.
UOB is expected to report its results on August 5, with DBS and OCBC both reporting on August 7.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Month saw plantation and agri stocks hit by retreating oil prices
By WONG WEI KONG
THE total market capitalisation of stocks listed on the Singapore Exchange (SGX) fell in July, a month of choppy trading which saw optimism fuelled by the drop in oil prices alternating with fears that the financial crisis in the US might deepen.
At the end of July, total market capitalisation of stocks on the SGX stood at $657.5 billion, $19.9 billion or 2.9 per cent lower than $677.4 billion at the end of June.
This comes after some $120 billion was slashed from the combined market value of companies listed on the SGX in the first six months of the year.
The one thing that stood out in July was the hit plantation, resource and agriculture-related stocks took from retreating oil prices, in a reversal of a trend that had run through the first half of the year.
Wilmar lost 12.8 per cent in market value to finish the month of July with a market cap of $28.2 billion, still the fourth largest stock on the SGX.
Noble saw its market value drop 8.5 per cent to $7.1 billion, while Straits Asia Resources lost 21 per cent of its market cap to finish the month with a market value of $3.04 billion.
National shipping line Neptune Orient Lines (NOL) continued to suffer from poor sentiment over its bid to acquire Hamburg-based Hapag-Lloyd from Germany's TUI Group.
The stock shed 12 per cent of its market cap in July on worries that it might overpay for Hapag-Lloyd, ending the month with a market value of $4.2 billion.
But despite the banking crisis in the US, the three Singapore banks have continued to hold up relatively well, with DBS Group, United Overseas Bank (UOB) and OCBC Bank all enjoying gains in market cap in July.
The banks will be in the spotlight next week, as they report their second quarter and first half earnings.
'Second quarter 2008 results should lead to confidence being restored in the sector,' said JP Morgan in a report.
'The concerns have included substantial further marks on CDOs, asset quality turning dramatically, and market share losses for loans, and margins suffering from low Sibor. Upcoming results should address these to an extent, leading to further outperformance.'
Year to date, Singapore banks have outperformed the MSCI Singapore Index by 12.3 per cent and the MSCI Asia ex Financials Index by 21.4 per cent, according to JP Morgan calculations.
Investors should take advantage of the bear market in financial stocks to buy shares of well-managed banks such as DBS, according to Fortis Investments said.
This is because the global credit crisis is 'half-way through', John Chisholm, Boston-based head of investment specialists in equities at Fortis, which oversees US$7.5 billion of global assets, said in an interview with Bloomberg.
UOB is expected to report its results on August 5, with DBS and OCBC both reporting on August 7.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
posted by mrmoon at 11:09 AM
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