| 07/08/2002 Monday 11:50 pm Mont 11:00 pm Just when the Dow looks rosy, in comes Merck with yet another sharp error in previous reported revenue. This may not be the last company to report their misdeeds of the past years and each time it comes out, the US markets would pay dearly. How long this will go on is anyone guess and from now, any strong earnings or profitability surges would be view with askance. What does this means for the other markets? The major beneficiary of this 'crisis' would be currencies such a Euro and Yen. Other instruments such as bonds and Gold could see interest from time to time. Overseas markets which are perceived as triple A in accounting and disclosure standards may stand to benefit. But are there many stock markets that could withstand close scrutinty? That is a million dollar question. With today's plunge, we have seen reversal patterns on many stocks but with the mood of the market likely to be bouyant once the Merck crsis blown over, some play may return. For now, the best guess is that we may see a weaker opening tomorrow and then a firmer close as very short term, the indicators are oversold. Sun: Dow closed up 324 points, Nasdaq up 68 points and SOX is up a hefty 9%. The rally ignores a worsening employment numbers as panic short covering in the aftermath of a relatively troubled-free Independence day holiday. Baring another Enron and WorldCom scandal, the week ahead could see the US markets heading higher. Stocks which were hammered down last month, such as semi-con and telcos could be the major beneficiaries. Over here, Stats, Chartered, Venture, Ellipsiz, Creative could continue their rally. Blue chips have benefited from Temasek's plans to divest or scale down their stakes in sectors perceived as non-critical to Singapore's security. Those stocks as well as banks may ride the next wave up. The week ahead could not come any better for IPOs. A slew of IPOs, such as Aspnetcentre, Viz Branz, Darco, CityAxis and CapitalMall could benefit from the improved market sentiments. Demand expected to outstrip supply as most issue are in the realm of 0.20 to 0.30 with the exception of CapitalMall which is from 0.94-0.96. Previous commentaries |
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