STI drifts into negative territory

Tone is forecast to remain more downside biased, says OCBC Investment Research.

OCBC Investment Research said:

The correction on Wall Street overnight and the poor Nikkei start (down 0.7% now) are likely to cue the local bourse to a lower opening this morning.

As a recap, the STI traded in a fairly muted fashion yesterday on low trading volume; after opening some 0.1% higher, the index drifted into the negative territory with a 0.1% lower close.

And with today's tone likely to remain more downside biased, we could see the index slipping further in the direction of the 2980 minor troughs.

Below that, the subsequent support lies at the 2930 minor trough. On the upside, 3040 is still the immediate obstacle to overcome with the next resistance pegged at the 3090 recent peaks.

IG Markets Singapore meanwhile noted:

In Singapore today the battle for Asia Pacific Breweries via Fraser & Neave rumbles on. It seems ThaiBev is serious about acquiring F&N and is looking to bring onboard partners to help it acquire the soft drinks manufacturer.

But shareholders may still prefer selling F&N’s APB stake to Heineken rather than trust a half-cocked effort by the Thais to acquire the company at the eleventh hour with another interested party. APB and F&N’s ownership structure is already complicated enough.

The futures market points to a slightly weaker open for the STI this morning after yesterday’s lacklustre performance.