Keep closer eye on late large cap trades

AT the end of last week, the Straits Times Index closed at its highest in eight months, up 2.7 per cent for the year to date. It would be tempting to conclude from this that most stocks had gained, on average, 2.7 per cent or thereabouts for 2014. Unfortunately, this was not the case - 47 per cent of the market or about half of all stocks was still in negative territory.

Perhaps more importantly, 12 of the 30 STI components were also in the red for the year, including market mainstays such as DBS, OCBC, SembCorp Industries, SembCorp Marine, Keppel Corp and perhaps the best proxy for the local market, the Singapore Exchange.

A look at the index's best performers shows that its gain was largely due to Olam International and the Jardine group - Olam is up a whopping 45 per cent since the start of the year because of Temasek's takeover bid and the Jardine group's gains ranged from 12 per cent for Jardine Strategic to 34 per cent for Jardine Cycle & Carriage. With Jardine's large market cap, its influence on the index is typically substantial.