A VOLATILE Straits Times Index (STI) that drew its inspiration from the Hang Seng Index and continued churning of penny stocks were the main features of a mainly weak and featureless trading session yesterday that ended with the STI losing 34.25 points at 2,237.20.
The backdrop was the same as the previous five occasions - investors apparently are now unsure of the 'green shoots' economic recovery story that was all the rage over the past three months. This has led to a loss in momentum and liquidity or, to put it simply, the trend bending.
The source - as always - of the browning of green shoots was Wall Street, where the major indices have stalled so far this week, reportedly because of uncertainty over the economy and concern over rising joblessness.
Most brokers however, remain unfazed by the sudden appearance of weeds, with mainly 'buy' calls issued.
UOB-Kay Hian (UOB-KH) on Wednesday, for example, in a 'buy' report on the property market titled 'On the Road to Recovery' said that the recovery in volume in the high-end segment implies investors are more accepting of present prices. With a relatively stable job market and sales momentum likely to continue, the local broker said that conditions are good for favourable land bank valuations, that is, the risks of writedowns is now lower.
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