Analyst: The Haizhi still has the potential to continue its upward trend this week

Analysis: The Straits Times Index Will Be Supported by External and Internal Factors

In terms of individual stock news, Great Eastern Holdings will hold a special shareholders' meeting for privatization on Tuesday (8th). It was previously questioned by the Singapore Investor Association (SIAS) and shareholders about whether it violated the Takeover Code by disclosing the independent financial advisor's suggested offer price range to OCBC during the negotiation period.

Nanofilm, a manufacturer of advanced nano materials, announced on Saturday that it has signed a sale and purchase agreement with Venezio Investments, a non-wholly owned subsidiary of Temasek Holdings, to acquire all 49 million preferred shares held by the latter in Nanofilm's subsidiary Sydrogen Energy for SGD 15 million, equivalent to a 35% stake. Of this, 11.67% is planned to be acquired in November this year; the remaining 23.33% is expected to be completed by November 2026. Nanofilm's shares fell 3.79% to SGD 0.635 last Friday.

LHN Group, a real estate management services company, announced after trading on Friday (4th) that, due to cost and utility considerations, the board has unanimously approved a plan to delist from the Hong Kong Stock Exchange. The group will maintain its primary listing on the Singapore Exchange. According to the announcement, the trading volume of the group's shares on the Hong Kong Stock Exchange is low, leading to insufficient opportunities to utilize the platform for any post-listing equity financing. Additionally, maintaining a listing in Hong Kong incurs ongoing extra costs.

"From a technical perspective, the short-term support level for the Straits Times Index is around 3953 points, corresponding to its 20-day moving average, which provides certain technical support. As the index is in a historically high area, there are currently no obvious resistance points to follow."

He believes that once market sentiment shifts to chase lagging sectors, these stocks will have opportunities for catch-up gains, further driving the index upward.

He also holds an optimistic view on the fundamentals of the local stock market, as many components of the Straits Times Index are still at low levels, such as Real Estate Investment Trusts (REITs) being suppressed by high U.S. interest rates, leading to low valuations.

Further Reading

Great Eastern stated in a written response on Saturday (5th) that it and the independent directors responsible for the exit offer do not believe there was any misconduct or violation of the Takeover Code during negotiations with OCBC. The code stipulates that exit offers must be fair and reasonable and comply with other regulations. Sharing the offer price range with OCBC does not violate the rules, as there is a note indicating that the code does not prevent companies from sharing information confidentially with genuine offerors. Furthermore, the final exit offer price is higher than the price discussed when OCBC and Great Eastern were unaware of this range.

The FTSE Straits Times Index closed down 0.15% or 5.95 points at 4013.62 points last Friday (4th), ending a two-day streak of hitting new highs However, the Hang Seng Index rose a total of 1.20% last week, leading analysts to believe that the single-day decline is merely a short-term fluctuation and not a signal of the end of the upward trend.

Liu Weixiong, Chief Stock Broker at Phillip Securities, responded to inquiries from Lianhe Zaobao, stating that Trump's "big and beautiful" tax and spending bill was passed on July 3rd, U.S. time, causing declines in U.S. stock index futures, Japanese stocks, and Hong Kong stocks, with other Asian markets, including our country, also affected on Friday (July 4th).

This is just a preliminary delisting plan, pending a vote at a special shareholders' meeting and must meet several conditions, such as obtaining approval from the Hong Kong Stock Exchange Listing Committee. LHN Group fell 0.69% last Friday on the Singapore Exchange, closing at SGD 0.715.

IG market strategist Tony Sycamore pointed out that investors are waiting for Wednesday, and their lack of optimism regarding the trade agreement is leading to weakness in export-oriented Asian economies, especially in the stock markets of Japan and South Korea. He said, "The U.S. economy is performing better than most people's expectations, which I believe makes it easy for the current market to continue to improve."

"The Hang Seng Index at 4000 points is just the beginning, not the end. There is no bubble phenomenon in the market, and there is no obvious fear of heights among investors. Therefore, I advise investors to maintain patience and confidence, avoiding easy arbitrage exits at the early stages of the rise."

The 90-day reciprocal tariff suspension set by U.S. President Trump is due this Wednesday (July 9th), which makes the Asia-Pacific and Singapore stock markets cautious, with mixed results in the last trading week. Interviewed analysts believe that the Singapore stock market has dual support from both domestic and foreign sources, and still has the potential to continue its upward trend this week.

He said, "Overall, the slight adjustment last Friday was driven by external sentiment leading to technical adjustments, and the market structure remains robust, with the main upward phase not yet over."

CMC has been suspended from trading since July 15th last year, and it will soon reach one year, with the stock price reported at SGD 25.80 before suspension. OUE closed up 0.24% last Friday, at SGD 16.48.

Looking ahead to this week, Liu Weixiong believes that the Hang Seng Index will be supported by both external and internal factors, continuing its upward momentum. External factors include recent new highs in the U.S., European, and Japanese stock markets, with investor sentiment leaning towards optimism, which can drive regional stock markets to strengthen simultaneously.

On the other hand, the Singapore seller stamp duty was raised late on July 3rd, which poses some pressure on Singapore's real estate sector, but the adjustment is relatively mild, so it does not constitute a systemic decline