The move, announced on Sept 17, collectively by the Ministry of Trade and Industry, EDBi, the Monetary Authority of Singapore and Temasek to boost the local equity market is a welcome departure from the Singapore Exchange’s multi-asset strategy with its focus on mainly derivative products be they equity, commodity or foreign exchange. The impact is likely to be longer term rather than immediate. As a result, the move could lift the local market over the next 12 months despite the STI’s short term weakness.
The Hang Seng Index broke below its 200-day moving average in early-July and since then it weakened. Support is at 24,748 initially, a low made on July 27, and then at 24,581, a low made on Aug 20. A break below these levels would indicate a downside of 23,512. Resistance is at the declining 50-day moving average at 26,209. More immediately though, the HSI needs to regain 25,000 as this level may turn out to be a psychological resistance.
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