Dear friends,

We have seen the STI falling for the past 5 days straight. Is this the end of the rebound? Are we testing a new low?

Key Events:

Obama inauguration – 20^th Jan

Singapore Budget announcement – 22^nd Jan

CNY – 26, 27^th Jan

Earnings:

SPC – 20^th Jan

Kepland – 21^st Jan

Kepcorp – 22^nd Jan

Intel – this week

Outlook:

The index is standing near key support region of 1760, consolidating in the form of an ascending triangle. A rebound is imminent from this point but failure to sustain strength and a close below this key support will bring a retest of 1470, last low formed in October.

For the past few days, the index has retraced sharply after testing resistance at 1940. Oil price plunged back below US$40 per barrel after hitting US$50. These can partly be attributed to the higher than expected US unemployment figures of 7.2%, Alcoa (aluminum producer) reporting first quarterly loss in 6 years and Intel to release their results later this week. Fears over upcoming results by banks and commodity players continue to suppress prices.

Another trend to note is the strengthening of USD and Yen. Using SGD as a base, USD rose from 1.43 to 1.5 in the last 10 days while Yen rose from 0.0157 to 0.0167 in 6 days. Firms with USD based revenue will stand to benefit but those with USD denominated expenses like airlines will tend to be affected.

Regards,

Heiwa