Gains in the N225 over the past two sessions erased the previous seven-day pull back. This was a strong signal for a firmer assault, which resulted in a breach of the 20,000 level. With corporate earnings season due out soon, we may see momentum drivers for a firmer follow through here. Japanese Exports for March, out this morning, came in showing an increase of 8.5%. This is in line with the market’s forecast and a strong bounce up from last month’s 2.4% growth. With the tourist season heading into full swing, the advantage of a lower yen will also have a huge impact on these numbers in the months ahead.

Hong Kong and Chinese Indices

The three major Chinese Indices - the Hong Kong 43, the HK China H-shares and the China A50 - have almost identical charts. They all seem to be consolidating the very fast moves up from earlier in the month. This is technically a very positive sign as the consolidation is managed at a high level. If this can hold, we might see a higher move up from here. Trading volumes have continued to stay strong, indicating continued interest in these Chinese names. Our Client Sentiment indicators support the view that the market may be ‘fully loaded’ here. In view of the huge moves we have seen, traders may find it prudent to incorporate trailing stops into their execution process.

Noble Corp

It is encouraging that Noble has come out this morning, agreeing to address the transparency needs of public shareholders, vowing to increase disclosures, starting with their Q1 results. The stock at yesterday’s close of S$0.87 is down more than 25% from its high in February. This is just above its 18-month low of S$0.825 hit just last week. With the increased focus on the company’s accounting practices, it hardly comes as a surprise that the Credit Default Swap for the company (NOBLSP CDS USD SR 5Y D14) has gapped up once more in these past three days, highlighting an increased concern over the outlook for the company’s debt.

Stocks to watch

China Southern Airlines: Reports quarterly numbers today with strong figures expected in view of solid traffic growth and the ‘gift that keeps on giving’, namely lower fuel bill. Keppel Corp: Trades ex-dividend of S$0.36 .
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