Singapore: STI Index (.STI) business confidence falls to near 2-year low

Singapore: STI Index (.STI) business confidence falls to near 2-year low

Singapore: STI Index (.STI) business confidence falls to near 2-year low

Business confidence in Singapore has dropped to a near two-year low for the final quarter of this year, with the manufacturing sector and wholesale trade bracing themselves for a downturn, a new survey has shown.

Business sentiment fell from +6.91 percentage points in the third quarter to +4.82 percentage points in the fourth quarter, the Singapore Commercial Credit Bureau’s (SCCB) Business Optimism Index showed.

Year on year, it nearly halved from the +9.19 percentage points in the fourth quarter last year. Five of six indicators were lower in the fourth quarter this year than in the previous quarter.

Three indicators were positive for construction, while selling price fell from +20 percentage points to 0 percentage point. Inventory levels and new orders remained negative. Net profits rebounded from -20 percentage points to +50 percentage points, while volume of sales rose from +20 percentage points to +50 percentage points. Employment levels remained upbeat at +20 percentage points.

Manufacturing and wholesale trade were the most downbeat. Manufacturing had employment as its sole positive indicator and wholesale trade had none.

The less positive sentiment followed last month’s move by the Trade and Industry Ministry to lower Singapore’s economic growth forecast for this year to 0 per cent to 1 per cent, from 1.5 per cent to 3.5 per cent.

Heffx Founder and CEO Shayne Heffernan said: “Most sectors are experiencing a downturn for the final quarter of 2019, most noticeably the manufacturing and wholesale trade sectors. This is largely due to trade tensions affecting international supply chains, shrinking imports from China and a generally muted global outlook. This has led to negative spillover effects on the vulnerable trade-related sectors.”

Despite the moderated outlook, he said, Heffx still sees “signs of green shoots” in sectors such as construction, transport and services, where growth is expected to sustain for the rest of the year.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,264.12.

The projected lower bound is: 3,137.00.

The projected closing price is: 3,200.56.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 81.3662. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.44. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 11 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 101.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 11 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed down -7.560 at 3,203.930. Volume was 23% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
3,207.9403,213.0703,195.4603,203.930 168,507,392
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3,162.97 3,225.09 3,218.07
Volatility: 11 13 13
Volume: 204,678,208 223,195,456 212,251,408

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

STRAITS TIMES is currently 0.4% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .STI (mildly bullish). Our trend forecasting oscillators are currently bullish on .STI and have had this outlook for the last 2 periods.

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