Published On: Thu, Nov 22nd, 2012

Stocks Rise Following Ceasefire in Gaza Strip

In Singapore, Petra Foods opened up the day with a ‘buy’ rating. As one of the top producers and suppliers of cocoa in the world, Petra Foods Ltd has large market shares in Indonesia and the Philippines. From 2004 to 2011, the company’s consumer division grew by 20.2 percent a year. Most of this rise was attributed to increased consumption in Asia, although some of its top clients include the Meiii Group, Nestle, the Mars Group and Cadbury. By 02:39 GMT time, shares in the company were up by 1.1 percent for the day at a level of S$2.70. Since the start of 2012, share prices for the company have grown by 45.9 percent.

Another winner in Singapore was Neptune Orient Lines LTD (NOL). This group saw its share prices rise by 03:18 GMT to a level of S$1.12. This marks a 5.7 percent increase from Wednesday’s close of 20.9 percent. In the last year, the container shipping company has watched its shares climb by 20.9 percent. Despite growing by an impressive amount for the year, by Wednesday’s close, NOL had posted a decline of 8.6 percent for the month. As Neptune Orient Lines’ market share increases in the Pacific, it is forecasted to become more profitable in 2013.

CIMB Research also chose to downgrade Capital Mall Trust this week. Shares in the company were switched from a forecast of outperform to underperform. Previously, the target price for Capital Mall trust was at S$2.43. The recent downgrade switches the target to just S$2.23. The shopping mall owner recently announced a plan to raise new funds that it does not need.  Following the downgrade, shares retreated by 2.4 percent to a level of S$2.07. For the year, Capital Mall trust is still up by 22 percent.

In South Korea, shares in Daewoo Engineering & Construction rose by 1.5 percent. Hyundai Engineering & Construction advanced by 2.7 percent. Japanese export shares also gained during the session with Sharp Corporation rising by 4.3 percent and Yamaha Motor Company gaining by 4 percent. In Hong Kong, China Mobile Limited advanced by 1 percent.

Indian Shares

The Indian parliament is opening its winter session today. Some opposition leaders are threatening to raise a no-confidence motion due to executive actions taken by the government. This measure could decrease investor confidence. A lack of action could also allow investor and consumer sentiment to sour.

Shares of the BSE Sensex were 0.29 percent higher, or 53.54 points. They reached a level of 18,513.92 by 9:15 a.m. The BSE Realty Index advanced by 0.7 percent following reports that the finance minister had requested banks in the country to bail out residential construction projects. This move is expected to help prop up builders in India and restart economic growth. The 50-share Nifty rose by 0.25 percent to 5,629.10. It is 14.30 points higher for the day so far.

During the opening session, Mahindra & Mahindra, TCS, Bharti Airtel, Infosys and Sun Pharma were the only stocks that posted lower values. Briefly during the session, the Indian rupee hit a two-month trough. By 9:17 a.m., it was at a level of 55.04. This marks a 0.12 percent, or 6 paise, rise since Wednesday’s close of 55.11 rupees.

The Winter Session in India is expected to include the introduction of new bills that promote foreign investment in the Indian insurance market. Presently, insurers can only allow up to 26 percent of investments come from foreign companies. If the bill passes, it would allow for foreign investments to total up to 49 percent.

Overall, Asian stock markets advanced during the morning session on Thursday. A private survey was released that showed manufacturing levels rising in China to a 13-month high. The HSBC’s Purchasing Managers’ Index rose from 49.5 in October to 50.4 in November. In September, PMI was at 47.9.  The rise in share prices was also caused by an agreement to cease-fire in the Gaza Strip.

In South Korea, the Kospi rose by 0.8 percent to 1,898.25 while the Japanese Nikkei 225 index advanced by 1.1 percent to 9,319.36. The Australian S&P/ASX 200 index increased by 1.3 percent to a level of 4,424.20. Hong Kong’s Hang Seng saw a 0.5 percent increase to 21,622.82. Benchmarks in Taiwan and Singapore also advanced during the session.

At the opening bell, stocks in Tokyo rose by 1.23 percent on Thursday. This is in line with markets in Europe and the United States. The announcement of the end of fighting between Israel and Hamas contributed to the advance as well as a much weaker yen. Japan’s currency retreated from 83.51 yen per United States dollar on Wednesday night to a level of 82.54 yen on Thursday morning. At the same time, the euro rose from $1.2826 versus the greenback to $1.2859. The euro currently is trading at 106.12 yen. At the end of Wednesday’s session, it was only fetching rates of 105.84.

United States stock markets saw a decrease in volume on Wednesday. The markets will be closed on Thursday due to the celebration of Thanksgiving Day in the United States. Markets are expected to reopen on Friday for a shorter session. In Japan, stock markets will be closed on Friday in commemoration of a national holiday.

Prior to Thursday’s holiday, the Dow Jones Industrial Average advanced by 48.38 points or 0.38 percent. It is ended at a level of 12,836.89. The Nasdaq composite index increased by 0.3 percent to end at 2,926.55 while the Standard & Poor’s 500 index advanced by 0.2 percent to a level of 1,391.03 by the end of Wednesday’s session.

Oil Rises

Benchmark crude for January deliveries saw an advance of 22 cents to reach a level of $87.60. On Wednesday, January crude oil rose by 63 cents to end the day at $87.38. In Nigeria, oil production dropped by 1.5 million barrels on Wednesday. ExxonMobil became the fourth major oil company to caution clients about potential delays in the Nigerian oil market and among exports. Normally, Nigeria produces 2.4 million barrels a day. Most of the outages were caused by a pipeline spill that occurred on November 9. This spill is reported to include 20 miles of coastline in Nigeria.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.