SGX

By Charlie Lau Suan Liat

SGX’s trading was halted at $9.54 mid-morning on Friday, October 22, 2010. The announcement that followed was the proposed takeover of the Australian Stock Exchange [ASX].
Halted at $9.54, SGX traded at a Price Earning Ratio of 31.7x. ASX simultaneously halted at A$34.96 on Friday has a Price Earning Ratio of 17x.

SGX has about 800 public listed companies and its market capitalization is about S$10b. ASX has about 3000 public listed companies and its market capitalization is about S$8b.

Singapore Exchange [SGX]

SGX’s offer to takeover the ASX is valued at A$48 – A$22 in cash & A$26 in stocks.
From the chart of SGX it can be seen from the increased trading Volume & Share Price [$7.65 – September 8, 2010] that this ASX takeover started brewing in the first week of September 2010.
From the peak of $10.26 on October 15, 2010, the 14-day Relative Strength Indicator started to turn down. The 5-day Stochastic Momentum also started to turn down. The Share Price already cut the 5-day Moving Average from above, on October 20 at $9.94. This was the first sign of danger that the SGX share price would be down further.
Once the Critical Support of $9.40 is broken, the drop in share price would be drastic, testing other previous Lows.

Do not attempt to “catch a falling knife” by trying to speculate on a technical rebound.