Insufficient Capital Inflows, Straits Times Index Up Slightly By 0.59 Points
2022-12-29 05:00uSMART

Source: Lianhe Zaobao

December 29, 2022


The lack of short-term inflow of risk capital resulted in a narrow fluctuation of the local stock market throughout the day. The Straits Times Index closed at 3266.97 points on Wednesday, December 28, with a slight increase of 0.59 points or 0.02%. The index fluctuated within a narrow range of 3256.24 to 3270.33 points throughout the day.

In terms of stock markets in the Asia-Pacific region, the rapid lifting of restrictions in China attracted risk capital to flow into Hong Kong's stock market, pushing it up by 1.64 points. Other stock markets all showed a decline, with the Seoul stock market showing the largest decline, falling 2.24%; Taiwan and Shenzhen stock markets fell 1.08% and 0.95% respectively; the decline in Tokyo, Sydney, and Shanghai ranged from 0.26% to 0.41%.

In an interview with Lianhe Zaobao, market strategist Huang Jiar Ren said that due to the inflow of risk capital into Hong Kong's stock market following the opening of China, the Straits Times Index has recently seen a lack of inflow of capital. The Straits Times Index has risen about 9% for the year, while Hong Kong's stock market has previously shown a larger decline, making it more attractive in the short term.

He believes that the U.S.' final interest rate and economic situation will be the main factors that affect the future trend of the Straits Times Index. Among them, the U.S. Consumer Price Index in mid-January will be key. As a safe haven market, if the U.S. economy experiences a hard landing, it may attract capital to flow into the Straits Times Index.

China's accelerated opening will have a positive impact on the market in the long run, according to Tan Ying Ying, Chief Stockbroker at Philips Securities. She said that the market is expecting poor fourth quarter results this year, which may limit the flow of funds into the Straits Times Index. Before the release of next year's January performance, the index may fluctuate between 3220 and 3280 points.

Additionally, although China's accelerated opening has led to a surge in COVID-19 cases, in the long run, the opening will have a positive impact on the market. In the short term, it has also stimulated a significant rise in stocks related to the pandemic. Tan Ying Ying is particularly optimistic about the continued rise of glove stocks, but mask stocks may have limited growth due to market oversupply.

Furthermore, Tan Ying Ying pointed out that oil prices continue to rise due to macroeconomic factors. If oil prices continue to rise next year, it may exacerbate inflation and have a negative impact on the market. However, this will be beneficial for the trend of stocks related to oil.

The local stock market's total volume was 826.74 million shares with a total turnover of 521.05 million yuan. There were 274 rising stocks and 215 falling stocks.

In terms of constituent stocks, 11 were up, 10 were down and nine were unchanged.

The biggest gainers were DFI Retail Group Holdings and Wilmar International, with increases of 3.78% and 1.44%, respectively.

The biggest losers were Jardine Cycle & Carriage and City Developments, which fell 1.15% and 0.73% respectively.

In terms of individual stock, Chip Eng Seng announced after market close that as of December 28th at 6pm, major shareholder Tang Dynasty Treasure and its concert parties have acquired 495,223,450 shares, equivalent to about 63.15% of Chip Eng Seng's total issued shares. The proposed price for the full acquisition is SGD 0.75 per share.

Japfa requested a temporary suspension of trading before market opening due to the listing of its China milk business subsidiary, AustAsia Investment Holdings (AAG), on December 30th in Hong Kong.

HRnetgroup's subsidiary, RecruitFirst, in Taiwan has received a TWD 1 million (SGD 43,000) investment and a license from the Kaohsiung City Government's Labor Affairs Bureau to provide employment recruitment services both locally and internationally."



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