The stock market capitalisation of Singapore soared up 17.7 percent to $641.7 billion during the entire third quarter of 2009, which had ended yesterday, 30 September, from the recorded $545 billion at the end of the second quarter last June.
When stock trading came to its end yesterday, the total market value of the 790 listed companies showed a 4 percent increase in the month of September from the $617.6 billion recorded at the end of August. However, this result was lower, compared to the $657.5 billion at the end of July.
Even though the third quarter was opened with a few consolidations in the liquidity-fuelled stock rally, the Straits Times Index (STI) spiked again on the back of the firmly positive lookout in the property market in mid-July.
“Property stocks led the gains, which soon filtered down to other blue chips”, stated the market review that was offered in the equity strategy report of the DBS Group Research, which was released yesterday.
However, these blue chips had taken a back seat up to the end of the quarter after the interest shifted from small to mid capitalisations, the report noted. Consequently, smaller firms had stronger gains in the wider market.
The company that gained most in terms of percentage is the Genting Singapore, an integrated resort operator. Its market capitalisation almost doubled up in the third quarter to $13 billion.
The report also highlighted stocks, such as Ezra, Ezion, Swissco, Meiban, and Mermaid as examples that recorded an increase in the interest in the small caps, particularly in the technology and marine and offshore sectors during the quarter’s second half. A gain of 40 up to 80 percent in the market cap was recorded throughout the third quarter.
However, many of the blue chips, during that quarter still fared well. Despite losing some of its market value last August, SingTel, the largest listed entity in Singapore, gained 8.3 percent to $51.7 billion in its market cap throughout the quarter.
Also, the top ten largest companies in the country in terms of market capitalisation were able to retain their 30 June rankings at the third quarter’s end, except for Dairy Farm, which fell to the 13th place after its market capitalisation declined to 9.5 percent. Though, the company is still included as one of the 13 companies that are worth over $10 billion. There are a total of 88 companies that finished with over $1 billion market cap yesterday.
The combined market caps of all the 30 STI’s heavyweights at the end of the third quarter, which amounted to $402.4 billion, has recorded a 15.4 percent increase over the quarter.
Many of the components of the STI saw gains in the market value during the third quarter. The only companies that experienced loss are the SIA Engineering with 8.2 percent, the Cosco Corp with 4 percent, and the SMRT with a loss of 0.5 percent.
The stock rally may possibly have a way to go as more outlook for positive earnings are expected in the upcoming months.
“The market is heading towards the 3Q earnings season with an optimism on the earnings outlook going forward. This is in contrast to the ‘wait and see’ approach taken in June ahead of the 2Q earnings season”, wrote Janice Chua, a DBS Vickers analyst.
However, a break in the stock rally may arise, especially when the usually quiet months of November and December come. “The bull has held its head up high for six months and its neck may need a holiday rest”, said Ms. Chua.