Trading set for optimistic tone

The index is forecast to recover part of the losses incurred on 29 October 2012.

OCBC Investment Research said:

With the US market closed overnight, the positive Nikkei start (up 0.6% now) could cue the local bourse to a mild technical rebound this morning.

As a recap, the STI ended more than 0.9% in the red following a 0.3% lower opening yesterday.

But with today’s tone possibly turning a tad more optimistic, we could see the index recovering part of yesterday’s losses with the immediate obstacle still pegged at the 3065 support-turned-resistance.

Above that, the next resistance is at the 3100 psychological level. On the downside, the immediate support is still pegged at the 3020 minor trough, with the subsequent base marked at the 3000 psychological support.

IG Markets Singapore meanwhile noted:

In Singapore today the big news centres on Singapore Airlines taking a 10% stake in Virgin Australia as Asian carriers look at further consolidation in the region. The move is in response to the planned tie-up between Qantas and Emirates.

SIA already has a strategic alliance with Virgin and wants to help it compete against Qantas in the lucrative Australian market. As a thank you Virgin Australia will take a 60% stake in SIA’s struggling budget airline Tiger Australia.

And Tiger needs all the help it can get. It released its Q2 results this morning which show further losses racked up, although at $18.3 million they are much less than the $50 million it lost this time last year.

The local corporate earnings season continues with CapitaLand seeing Q3 profits up 85% which will please Temasek which owns a 40% stake in Southeast Asia’s biggest property developer.

On the Fraser & Neave front, the talk circulating trading floors is that Thai Bev is busy trying to secure additional funding should it need to improve its $8.88 a share offer in light of OUE’s potential bid.

While OUE remains quiet on who it is talking to about a rival offer, F&N’s share price has already moved above $8.88 calling into question the true value of the conglomerate. Some see a potential offer coming around the $10 a mark which would fall nicely in the middle of the F&N’s own value range.

Despite Charoen kick-starting the whole battle for APB and then F&N he has so far nothing to show for his efforts apart from an increased holding in the property and drinks company.

Heineken has APB, OCBC has a tidy profit from the sale of its APB and F&N holdings while Thai Bev has yet to get its hands on the conglomerate despite building up a near 30% stake and amassing huge debts to do so.