Singapore Markets Morning Briefing - what you need to know for Thurs May 10, 2012

Analyst says the STI has now reached a significant tipping point after its 1.1% retreat to the 2900 level.

OCBC Investment Research said:

The continuous retreat on Wall Street overnight and the poor Nikkei start (-0.7% now) are likely to dent local sentiments further this morning.

Following yesterday's 1.1% retreat to the 2900 key resistance-turned-support level, the STI has now reached a significant tipping point.

While we could potentially observe some buying interest at this key base, a bearish break below this level could imply further medium-term downside pressure.

On the upside, 2950 is now the immediate support-turned-resistance with the subsequent obstacle pegged at 3010 (various peaks).

IG Markets Singapore meanwhile noted:

There are plenty of stocks on the radar screen in Singapore this morning.
Palm oil giant Wilmar has reported a 34% slump in Q1 earnings. It blames the fall on tighter margins in its China based business.

After yesterday’s announcement that SingTel had put on a 11% more customers, today it announced a modest rise in net profits from $998 million to $1.02 billion. Its Thai and Indonesian acquisitions are finally starting to show a profit.

UOB reported better-than-expected Q1 results after the market closed last night thanks to higher loan margins and fees. UOB has seen its share price slide of late but it is slowly building up quality deposits which will give its more liquidity for regional expansion.

But the biggest gasps of shock will be saved for Singapore Airlines which has posted an unexpected loss of $38.2 million as it was hit by weak passenger demand and high fuel prices.

These poor corporate earnings are likely to weigh on local traders today along with the Greek effect, although the futures markets hint at a slightly firmer open for the STI this morning.