STI forecast to drift sideways

Investors are expected to remain on the sidelines ahead of the long weekend.

OCBC Investment Research said:

The muted Wall Street close and the sluggish Nikkei start (flat now) are unlikely to provide much of a boost to the local bourse today.

Instead, we expect the STI, which closed 0.2% lower yesterday, to drift sideways as investors are likely to remain on the sidelines ahead of the long weekend.

Very little cues from the technical indicators as well and the index appears to be trapped between the 3020 (lower Bollinger band) and 3058 (centre of Bollinger band) for now.

Meanwhile, key support remains at 3000 and key resistance at 3100.

Separately, the suspension of Dynasty REIT’s IPO may have a mild negative near-term impact on sentiment; but we think that the overall effect could still be positive as there won’t be a liquidity drain.

IG Markets Singapore meanwhile noted:

It was a busy day in Singapore yesterday with Singapore Airlines’ bumper plane order while Dynasty Reit pulled its IPO at the last minute.

There is a danger the floatation may go the way of Manchester United and Formula One and never materialise. While Dynasty’s sponsor ARA says demand was there perhaps it feels this was just one Reit IPO too many for the SGX this year.

And this morning Thai tycoon Charoen has extended the deadline for F&N to consider its $8.88 a share offer to November 8. He may now be going back over his sums to see how much he can improve the current offer to deter a rival bid from succeeding while keeping shareholders happy.

The futures market points to a slightly weaker open for the STI this morning.