Finally, the market behaved more rationally today. Stocks eased down – especially the banking counters. STI retreated 13 points to close at 1,745. Volume traded in terms of value has come down considerably compared to yesterday. The turnover is 1.70 billion shares worth $1.08 billion. One thing worth noting is: Chartered and its rights both took up one third of the entire trading volume today.
There was no window-dressing effect today. It probably happened yesterday.
Though profit-takings were evident today, the underlying strength in the broad market could still be felt. I suspect this was caused by those investors rushing to jump into the market once they spot some price weakness. I also observed that some institutions were offloading their holdings already. If we disregard Chartered and its rights today, then the volume traded would be quite indecent actually.
Chart wise, STI certainly looks like it is due for some correction soon. Ideally, we should start collecting at 1,664 and more at 1,600.
On Chartered rights:
If you happened to be allocated the rights, I suggest that you sell them off in the market for some cash now since they have been showing some strength on the back of the mother share rebounding. The traders seem to be pushing up the mother share just like what happened to CapitaMall Trust (CMT) and its rights recently. Chartered has been a loss-making company for God-knows-how-many-years. Frankly speaking, I don’t think there is any good bargain here by throwing in another $0.07 per share to subscribe to the rights. If this is really a can-do company, the rights issue would not be done at such a steep discount.
The rights will be trading till 31/03/2009. Though there might be a chance that the traders will continue to push up both the mother share and the rights as we get nearer to Tuesday. However, do not be too hopeful that you can get to sell them any much higher. Just be glad that you can finally get back some cash, after holding such a poor performing counter for so many years.
Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.
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