SGX Prediction for 8 Aug 2011

I predict that SGX index will take a hit and might even test the 2900 point intraday for the following reasons even though DOW recovered on Friday on the back of better than expected employment figures:

1. A portion of the sell-off on SGX last Friday could be due to foreign funds selling index linked stocks due either to profit taking or to increase their liquidity for margin calls on funds that are more highly leveraged.
2. SGD weaken against USD last Friday on both the spot and forward market partly because foreign funds that have convert back to their home currency. I am not sure if MAS has intervened to support SGD.
3. SGX is closed on Tuesday 9 August due to national day celebrations.
4. To add additional time window risk, there is a FOMC meeting also on Tuesday 9 August in USA.

Just my common sense and I can be wrong.

Peter Lye aka lkypeter
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