This being the case, you can expect the "Cheong Ahh!" fans to be back in droves later... :)

After the recent correction, as evidenced by the way the market has so solidly recovered since those gloomy days in just a month or so, one can expect only further strength to show... 

There's underlying strength in the market...

See how it weathers the 'downdraft' whipped up by last night's big Dow fall...

STI first down on fear this morning, then recovered stably and, most likely, on the way upward strongly...



The bull is a different animal now!... refreshed and eager... there's money to be made!... :)

 

Quotes:

Stronger than expected first quarter GDP growth bodes well for earnings surprises this year and push ST Index to next 3500-3600 target

The economy grew 6.0% q-on-q in first 3 months of 2007 against 6.6% in earlier quarter and at annualised 7.2%, slowing slightly from the 7.9% annual pace in fourth quarter 2006 but well above all expectations. GDP looks set to expand at the higher end of the government?s 4.5-6.5% forecast which itself may be revised upwards (5 to 7%?) as soon as the full first quarter numbers are known which could be disclosed in the PM?s May Day speech.  Although it is a flash estimate ( kostly January-February statistics) an upward revision in the actual numbers appears more likely than a downward revision given that the performance in March which saw the stock market rebounding strongly from its end-February correction should be better than the preceding short month which had lower output due to the Chinese New Year holidays.Yesterday?s strong rally had portended this morning?s numbers and the slight pullback is a healthy breather as the market braces itself for more detailed analysis of sectoral performance and the first quarter earnings reports that will be streaming in briskly starting with SGX today. Even if the economy slows to 6-7% growth this year against 7.9% in 2006 this does not mean that corporate earnings will slow down as well from the 13% pace last year. In fact with the property market still at best at middle stage of its growth potential, property companies as well as those with significant property exposure and banks too should be a key driver of overall corporate earnings. Strong domestic spending boosted by higher wages and salaries across the broad spectrum of the population led by the civil service and political office holders as well as the wealth effect of the booming stock market should contribute to earnings growth. It should not be a surprise if earnings match or even better last year?s 13% growth, which could then sustain the STI to heights of 3600 and higher.Besides stock market gains, many Singaporeans will also be making capital gains from property investments with the middle private to lower end public housing set to join the high end boom albeit at a slower pace. This will create a double wealth effect which will boost the economy further as the asset enhancement policies of the 80s and early 90s finally make a comeback with a vengeance.    

With strong foreign liquidity flows showing no signs of letting up and the S$ rising steadily, stocks will continue to be in hot demand while companies made cash rich by strong earnings growth dish out higher dividends to make average yields attractive around 5%. At the same time, the market?s PE (about 15-16X now) will not climb too fast to reach the historical mean of 18-19x even as the STI keeps on climbing higher as market anticipates positive earnings surprises going forward. So far this year the index has already moved some 468 points in barely a month from 2932 March 5 low to 3400 yesterday, while year to date it has gained 414 points or 13.9% from 2986 at end-2006. Last year the STI rose 27.2% from 2347 at end-2005, which if repeated this year would take the index to 3800 at year-end but the level to watch out is around 3600 which would bring the market?s PE close to its 18-19x mean. However without bearish external shocks, this level can be reached if earnings surprises are the order of the day as investors anticipate more such pleasant surprises for the rest of the year. Further upward adjustments to the official GDP growth forecasts in the National Day speech and later in the year cannot be ruled out if the US economy does not slow down abruptly and interest rates continuing benign.After touching 3400, a pullback to around 3340-3460 is normal. A slower climb to the 3500-3600 target would be healthy after the 468-point surge from March 5 to April 9 as the year is still young and to avoid another unexpected mid-year correction which had set in after last May 6 GE. Since the STI has already undergone a sharp 11.6% correction earlier from 3316 to 2932, we should be able to avoid a more serious fall in the mid-year months with support around 3300 and 3200-3250 expected to be defended stoutly as the index fulfils its goal of climbing towards 3600. Having moved 713 points last year between 2278 and 2991, a repeat will take the STI to a high of 3645. Thus some stronger resistance can be expected when the index as forecast climbs towards 3600.