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THE five trading days just past closely resembled the five that preceded them - the first common feature being that each day the Straits Times Index (STI) moved ahead of Wall Street, taking cues mainly from the Dow futures but also from China and Hong Kong.
With the latter two rebounding on hopes of more government stimulus and with Wall Street now powering ahead on the conviction that the US Federal Reserve will not raise interest rates this year, the outcome here was a 32 points or 1.06 per cent gain for the STI over the week at 3,030.61, which included a 15.47 points rise on Friday.
The second common feature was the high proportion of business done in the 30 index members. For most days, 70-75 per cent of total dollar volume came from trading in the STI's components, which means that the more than 750 stocks which comprise the rest of the market are only contributing 20-25 per cent of business. On Friday, volume was 1.8 billion units worth S$1.08 billion of which S$692 million or 65 per cent came from the STI.
This lopsided concentration is perhaps only to be expected since retail participation has dwindled over the past few years - the penny stock crash involving Blumont, Liongold and Asiasons is now two years old with no answers forthcoming yet - which suggests that institutions running highly sophisticated programmes are the main participants.