Friday, August 30, 2013

Will it be a Singapore bear market?

The Straits Times Index dipped below the 3,000 mark this week and that got me scrambling. Looking at the chart above, we see that compared to the peak 3 months ago, the Singapore benchmark lost 13%. Is this sudden plunge that will see us enter the bear market phase or is it just a correction? When compared to the S&P 500, the Singapore market has taken a battering. There are of course reasons for the strength in America's stock markets despite possibility of the tapering of QE3. However, I would strongly argue that the next three months are very crucial for those looking at the Singapore market. If  it is just a correction, we should see support at the 2,850 level before the market returns to an upward trend. if it is a bear market, we will see the 2,700 level being breached with a bottom most likely at the 2,500 level. We are unlikely to return to the March 2009 bottom because the fundamentals point towards a shaky recovery. 

Keep in mind that the Singapore property market (private and public) is effectively dead due to the measures implemented by the government. As it is we see private sales down to a trickle and cash-over-valuation premiums approaching zero. What happens next, I would speculate, people are taking their money out of their stock and shares to help cover for their loss of capital gains in property. The amount of money in the Singapore system is being reduced. I am currently accumulating cash and will consider entry into the market once the STI hits 2,700, with 2,500 being the trigger point. Based on my above projections, we should look at buying in at the start of December. Once that happens, I would suggest picking quality dividends paying blue chips as well as commodity stocks. This is a balanced approach.

Saturday, August 24, 2013

Etika International: Possible big announcement

The share price of Etika cleared the 45 cents level, some 12.5% above its long time plateau of 40 cents, in a week mark by general market weakness. The graph above tells us two possibilities. One, it could be that the price is being pumped up before insiders cash in their options, or worse, a possible dilutive share issue. The cashing in of options has happened a few times although the price increase has not been that significant. Or two, it could be that there is a big announcement of either acquisition or buy in from a big player. These are speculation on my part but it is backed up by strong interest in the counter. I am invested in Etika so I naturally hope that it is positive news that will be announced some time next week. 

Tuesday, August 20, 2013

Cost and benefits of working in town

I moved recently to a new office in town near Lau Pa Sat from International Business Park, which is in Jurong East. My quality of life has changed drastically as a result of this move and it is meaningful to list out the costs and benefits:

1. Travelling time cut by half. It now takes me 30 minutes (door-to-door) to get to my new office compared to one hour one average. This means I save 1 hour each day. However, because I have class at NTU, it means there are times I may have to take a taxi down and it will costs $30.

2. I find it easier to meet people. As most of my friends work in the town area, there is a higher chance of me meeting them for a quick catch up or even a chance meeting compared to at Jurong. I find that this has helped me reconnect and with it, increase the number of opportunities that were previously hidden.

3. Food cost has gone up. One of the down side of a town location is that a simple lunch fare easily costs $5-6 compared to $4-5. When it rains, my food options get severely limited and the nearby food court costs me $8.

Overall, if I were not doing classes at NTU, working in town is probably one of the better options for most young adults because it helps you connect. I have worked in off center locations before and unless it is close to where you stay, you may be missing out on a lot. There are of course people who work in the yards (extreme west) or airports (extreme east) but these areas are clusters of expertise.