Spore market: likely to see a strong opening, following the rally in US stocks overnight. Positive drivers come from the coordinated action by the global central banks to boost credit supply, as well as China’s surprise cut in RRR.
As at 8.13 am, the KOSPI is up 3.4%, and Nikkei is up 2.4%.
Expect main beneficiaries to be the banks, property firms with exposure to China (GLP, CapitaLand, Keppel Land), commodity plays (Noble, Olam, plantations), transport (NOL, SIA).
Corporate news flow is light.
GLP prices its $500m perpetual bonds at 5.5%, at the lower end of 5.5 – 5.7% guidance due to strong demand.
On broker calls,
F&N: Deutsche, KE reiterate Buy
NOL: Deutsche raises container shipping sector to Overweight. Upgrades stock to Hold from buy.
On the technical front, the indicators are starting to tilt up, with Stochastics likely to reverse out of oversold territory, which bodes well for a short term bounce. The 20 day MA at 2763 seems like a more reasonable resistance level than the 50day MA, in light of the favorable news backdrop.
See support at ~2650, which if broken could signal the continuation of the longer term downtrend.
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