Saturday 31 August 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 lose 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 balanced approach.
Gabriel Gan: Emerging Markets Take A Tumble; The Tightening Starts Before It Even Begins
30 AUGUST 2013
Emerging Markets Take A Tumble; The Tightening Starts Before It Even Begins
By Gabriel Gan
It sure looked like the end of the world for investors in certain parts of the world as stock markets in emerging economies took a huge beating with some of these indices falling into bear market territory.
What are the emerging markets and who are they?
At the start of the new millennium, a group of countries – Brazil, Russia, India and China – became the investors’ darling due to the high-growth nature of their economies. We now know that China has catapulted itself into the world’s number two economy in the world although we cannot ignore the economic might of the rest when combined.
Soon after, Indonesia joined the ranks of BRIC to form BRIIC while South Africa, too, joined in the party to be collectively termed BRIICS. These markets have enjoyed a spectacular bull run but were all hit when the US financial crisis in 2008 blunted the edge of these economies. Their fortunes were revived when Federal Reserve (Fed) chairman Ben Bernanke first introduced quantitative easing in November 2008 followed by another few more rounds of money-printing exercises to jumpstart the US economy.
The commodities super cycle that started with the growth of China took a big hit when the Chinese economy fought inflation in 2009 but demand for energy and resources soon made countries such as Australia, Brazil, Indonesia, Russia and South Africa very rich as they rode on the cycle.
While quantitative easing helped to inflate financial assets in the US, it helped to keep alive prices of commodities although prices of precious metals and resources that are intrinsic to infrastructure development were under pressure from slowing economic growth.
We can safely assume that cheap money printed by the American printers helped to push up stock prices and also artificially fuelled speculative, not real, demand for commodities.
Jakarta Nosedives!
With this in mind, the smart investors have probably thought that cheap money used to jack up commodity prices will invariably cause prices of the same assets to plunge once the printers are decommissioned. Hence, we can probably explain why the Jakarta Composite Index fell from a high of 5,251 points on 21 May (Did Ben Bernanke say something back then?) to 3,967 points on 27 August. The 1,284 points plunge, or some 24.4 percent, firmly qualifies as a bear attack! The index has now fallen into bear market territory and may fall even more depending on how much cheap credit will be taken off the tables of the financial system.
To make matters worse, the weakening rupiah is reminiscent of 1997 when the collapse of the currency resulted in skyrocketing debt and inflation so much so that the rupiah was compared to the “banana note” in Malaya during World War II!
India’s Growth Days Over
Once touted as the next China, India’s heydays seem to be over after economic growth fell by half in merely two years from double-digit growth to a mere 5 percent in 2013. The falling rupee and rising inflation form a huge challenge that the government needs to tackle, and challenges for the currency and economy has translated into losses in the stock market.
A major triple-top formed in February, May and July this year has put the Sensex under a lot of pressure with the index now losing some 2,300 points from its peak of 20,351 points in July. It is desperately holding onto 18,000 points which, if failed, will probably see the index move towards 16,000 points. Should this happen, it can only mean that the rest of the Asian markets would have suffered the same fate caused by a mass exodus of funds from Asia to elsewhere.
Sabai, Sabai, No More!
The Thai economy is definitely not in such a mood after falling into a recession under the stewardship of Prime Minister Yingluck Shinawatra. The Thai economy fell 0.3 percent in the second quarter following a 1.7 percent contraction in the first quarter, largely reflective of weak domestic demand and the end of large-scale infrastructure projects that pump-primed the economy.
From a high of 1,649 points in May, the SET is now trading at 1,275 points – a huge 374 points away from the peak – falling into bear market territory.
Blame It On The Printing Machine?
There is a sense of hopelessness in some Asian markets – the “peripheral ones” – after the bloodbath. Why did some markets fall more than the others?
Asian economies that report slowing or negative growth have been punished very harshly while major markets like Hong Kong, China, Japan and Singapore have not been badly hit. It is likely that hot money, which is the result of cheap credit, has decided to take flight believing that Asia will be hit the hardest once cheap credit is no longer available and, worst still, when interest rates finally rise.
Most importantly, hot money will soon be returned to the Fed when stimulus measures are trimmed or ended in the future. This looks like the trend for the foreseeable future, confirming what I have been forecasting despite strengthening economic fundamentals in the US.
Investors are too reliant on cheap credit and money borrowed to fund speculative activities must soon be returned hence the flight from Asia.
At this point in time, investors do not want the economy to recover because it will spell a sooner end to Quantitative Easing III. We have arrived at a conclusion, and that is economic fundamentals are still not able to wean investors off the stimulus addiction.
Beware Of September!
The Hungry Ghost Festival has done it again! We failed to escape from the clutches of past fates when markets fell during the lunar seventh month!
If you think that we have had enough, think twice because we are in for a very volatile ride in September starting from 4 September when the US will announce job creations in the private sector for the month of August followed by the non-farm payroll and unemployment figures on 6 September. This will wreak havoc in the stock market as strong data will more or less confirm that the Fed will start tapering from 17 to 18 September during the FOMC meeting.
Even if the Fed does taper, investors will be trying to second-guess the market by speculating on how much of the US$85 billion will be reduced. Investors are now looking at the Fed to trim to US$70 billion a month. Anything more, the stock market drops and anything less will still lead to investors worrying about when the next tapering will come and when the complete exit will arrive.
Lots of things to worry about so sit tight.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com/
Publish date: 30/08/13
Emerging Markets Take A Tumble; The Tightening Starts Before It Even Begins
By Gabriel Gan
It sure looked like the end of the world for investors in certain parts of the world as stock markets in emerging economies took a huge beating with some of these indices falling into bear market territory.
What are the emerging markets and who are they?
At the start of the new millennium, a group of countries – Brazil, Russia, India and China – became the investors’ darling due to the high-growth nature of their economies. We now know that China has catapulted itself into the world’s number two economy in the world although we cannot ignore the economic might of the rest when combined.
Soon after, Indonesia joined the ranks of BRIC to form BRIIC while South Africa, too, joined in the party to be collectively termed BRIICS. These markets have enjoyed a spectacular bull run but were all hit when the US financial crisis in 2008 blunted the edge of these economies. Their fortunes were revived when Federal Reserve (Fed) chairman Ben Bernanke first introduced quantitative easing in November 2008 followed by another few more rounds of money-printing exercises to jumpstart the US economy.
The commodities super cycle that started with the growth of China took a big hit when the Chinese economy fought inflation in 2009 but demand for energy and resources soon made countries such as Australia, Brazil, Indonesia, Russia and South Africa very rich as they rode on the cycle.
While quantitative easing helped to inflate financial assets in the US, it helped to keep alive prices of commodities although prices of precious metals and resources that are intrinsic to infrastructure development were under pressure from slowing economic growth.
We can safely assume that cheap money printed by the American printers helped to push up stock prices and also artificially fuelled speculative, not real, demand for commodities.
Jakarta Nosedives!
With this in mind, the smart investors have probably thought that cheap money used to jack up commodity prices will invariably cause prices of the same assets to plunge once the printers are decommissioned. Hence, we can probably explain why the Jakarta Composite Index fell from a high of 5,251 points on 21 May (Did Ben Bernanke say something back then?) to 3,967 points on 27 August. The 1,284 points plunge, or some 24.4 percent, firmly qualifies as a bear attack! The index has now fallen into bear market territory and may fall even more depending on how much cheap credit will be taken off the tables of the financial system.
To make matters worse, the weakening rupiah is reminiscent of 1997 when the collapse of the currency resulted in skyrocketing debt and inflation so much so that the rupiah was compared to the “banana note” in Malaya during World War II!
India’s Growth Days Over
Once touted as the next China, India’s heydays seem to be over after economic growth fell by half in merely two years from double-digit growth to a mere 5 percent in 2013. The falling rupee and rising inflation form a huge challenge that the government needs to tackle, and challenges for the currency and economy has translated into losses in the stock market.
A major triple-top formed in February, May and July this year has put the Sensex under a lot of pressure with the index now losing some 2,300 points from its peak of 20,351 points in July. It is desperately holding onto 18,000 points which, if failed, will probably see the index move towards 16,000 points. Should this happen, it can only mean that the rest of the Asian markets would have suffered the same fate caused by a mass exodus of funds from Asia to elsewhere.
Sabai, Sabai, No More!
The Thai economy is definitely not in such a mood after falling into a recession under the stewardship of Prime Minister Yingluck Shinawatra. The Thai economy fell 0.3 percent in the second quarter following a 1.7 percent contraction in the first quarter, largely reflective of weak domestic demand and the end of large-scale infrastructure projects that pump-primed the economy.
From a high of 1,649 points in May, the SET is now trading at 1,275 points – a huge 374 points away from the peak – falling into bear market territory.
Blame It On The Printing Machine?
There is a sense of hopelessness in some Asian markets – the “peripheral ones” – after the bloodbath. Why did some markets fall more than the others?
Asian economies that report slowing or negative growth have been punished very harshly while major markets like Hong Kong, China, Japan and Singapore have not been badly hit. It is likely that hot money, which is the result of cheap credit, has decided to take flight believing that Asia will be hit the hardest once cheap credit is no longer available and, worst still, when interest rates finally rise.
Most importantly, hot money will soon be returned to the Fed when stimulus measures are trimmed or ended in the future. This looks like the trend for the foreseeable future, confirming what I have been forecasting despite strengthening economic fundamentals in the US.
Investors are too reliant on cheap credit and money borrowed to fund speculative activities must soon be returned hence the flight from Asia.
At this point in time, investors do not want the economy to recover because it will spell a sooner end to Quantitative Easing III. We have arrived at a conclusion, and that is economic fundamentals are still not able to wean investors off the stimulus addiction.
Beware Of September!
The Hungry Ghost Festival has done it again! We failed to escape from the clutches of past fates when markets fell during the lunar seventh month!
If you think that we have had enough, think twice because we are in for a very volatile ride in September starting from 4 September when the US will announce job creations in the private sector for the month of August followed by the non-farm payroll and unemployment figures on 6 September. This will wreak havoc in the stock market as strong data will more or less confirm that the Fed will start tapering from 17 to 18 September during the FOMC meeting.
Even if the Fed does taper, investors will be trying to second-guess the market by speculating on how much of the US$85 billion will be reduced. Investors are now looking at the Fed to trim to US$70 billion a month. Anything more, the stock market drops and anything less will still lead to investors worrying about when the next tapering will come and when the complete exit will arrive.
Lots of things to worry about so sit tight.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com/
Publish date: 30/08/13
Wednesday 28 August 2013
Saturday 24 August 2013
曾淵滄專欄 21.08.13：大戶角力製造波幅
恒指昨早11時後突然大跌，也不知道是甚麼原因。上網查一查內地股市，上午表現得還不太差，一度出現升勢；午後下跌，相信是反過來受港股大跌所影響。
既然不知道為甚麼下跌，不妨聽一聽市場裏傳來的聲音。有一種分析認為，是多個亞洲新興國家的貨幣幣值及股市正在大幅下跌，有人提到印尼、印度……更有人將之形容為新的亞洲金融風暴，情況有如1997年，然後是大量的黑天鵝論。
印尼、印度股市下跌、貨幣幣值下跌不是發生於昨日，而是發生了好一段日子，為甚麼會突然成為昨日跌市的理由？莫名其妙。
經濟問題未及97
我認為，昨日股市突然下跌，真正的理由是市場淡靜、大戶無所事事，就在期指市場角力，製造一些波幅。若連波幅也沒有，股市就更加一池死水，散戶全離場了。
近年來，多個新興國家的經濟都出問題，而且不局限於亞洲，也包括南美洲、澳洲。最近澳洲國會選舉，經濟衰退成了執政黨與反對黨最主要的辯論課題，辯論過程中，中國的經濟放緩被扯進去，成了澳洲選舉的辯論內容，理由是澳洲經濟衰退的真正原因，就是中國經濟放緩。印尼、印度、南美洲也同樣出產大量的礦產及農業經濟作物，如棉花，中國的需求一下降，全都出了問題。
不過，問題應該沒有1997年那麼嚴重。97時，亞洲多個國家經濟上已問題多多，但是，貨幣幣值依然與美元掛鈎，才引起索羅斯這群大鱷的狙擊。現在，這些新興國都學了經濟，經濟出問題，就任由貨幣貶值，大鱷就沒有狙擊的誘因。
曾淵滄
大學教授
Source/Extract/Excerpts/来源/转贴/摘录: 蘋果日報
Publish date: 21/08/13
既然不知道為甚麼下跌，不妨聽一聽市場裏傳來的聲音。有一種分析認為，是多個亞洲新興國家的貨幣幣值及股市正在大幅下跌，有人提到印尼、印度……更有人將之形容為新的亞洲金融風暴，情況有如1997年，然後是大量的黑天鵝論。
印尼、印度股市下跌、貨幣幣值下跌不是發生於昨日，而是發生了好一段日子，為甚麼會突然成為昨日跌市的理由？莫名其妙。
經濟問題未及97
我認為，昨日股市突然下跌，真正的理由是市場淡靜、大戶無所事事，就在期指市場角力，製造一些波幅。若連波幅也沒有，股市就更加一池死水，散戶全離場了。
近年來，多個新興國家的經濟都出問題，而且不局限於亞洲，也包括南美洲、澳洲。最近澳洲國會選舉，經濟衰退成了執政黨與反對黨最主要的辯論課題，辯論過程中，中國的經濟放緩被扯進去，成了澳洲選舉的辯論內容，理由是澳洲經濟衰退的真正原因，就是中國經濟放緩。印尼、印度、南美洲也同樣出產大量的礦產及農業經濟作物，如棉花，中國的需求一下降，全都出了問題。
不過，問題應該沒有1997年那麼嚴重。97時，亞洲多個國家經濟上已問題多多，但是，貨幣幣值依然與美元掛鈎，才引起索羅斯這群大鱷的狙擊。現在，這些新興國都學了經濟，經濟出問題，就任由貨幣貶值，大鱷就沒有狙擊的誘因。
曾淵滄
大學教授
Source/Extract/Excerpts/来源/转贴/摘录: 蘋果日報
Publish date: 21/08/13
Sunday 18 August 2013
Comparing STI ETF and Singapore Equity Funds Performance
18 Aug, 2013 Alvin Chow 2 Comments Funds
Passive investing advocates will always say that most unit trusts or mutual funds cannot beat the index and an investor is better off buying an index fund. This post will investigate the returns of STI ETF and the Singapore Equity Unit Trusts and ranks their performance.
Scope of Study
The source of data is SPDR STI ETF and Fundsupermart for Unit Trusts. To make a fair comparison, we will only consider funds which invest solely in Singapore equities. Data is taken as at 31 Jul 13.
We will only compare 5-year and 10-year performance since we have sufficient data and any returns in a period shorter than 5 years is not meaningful.
The Unit Trusts are notorious for their high sales charge and management fees. We will examine the impact of sales charge on investment returns. I have also factored the brokerage charges of 0.28% for STI ETF and projected its impact to 5- and 10-year returns.
Comparing 5-year performance (without Sales Charge)
Out of the 11 funds with 5 years of existence, STI ETF ranked 9th with 4.5% returns. Most funds have beaten STI ETF if sales charges have not been considered. This means that the fund managers are adding value to investors by getting above market average returns. These returns are include reinvestment of dividends.
- DWS SGP SMALL/MIDCAP: 9.4%
- Nikko AM Shenton HIF Singapore Dividend Equity: 7.6%
- Aberdeen Singapore Equity Fund: 7.0%
- DWS Singapore Equity: 5.8%
- LEGG MASON WA Singapore Opportunity Trust: 5.8%
- Amundi Singapore Dividend Growth: 5.5%
- Schroder Singapore Trust: 5.5%
- United Singapore Growth Fund: 5.4%
- STI ETF: 4.5%
- NIKKO AM Shenton Thrift Fund: 4.2%
- LionGlobal Singapore Trust: 2.9%
Compare 5-year performance (with Sales Charge)
After factoring the sales charge, STI ETF jumped to a joint-4th position with Nikko’s Shenton Thrift Fund at 4.2% returns. This shows the impact of the sales charge on your investment returns. It may look small at the start but the opportunity cost compounds over time and become significant.
Nonetheless, there are unit trusts that have outperformed the STI ETF. The safe conclusion is that STI ETF is the market average and most funds are likely to revert to the mean in the long run. This means that the funds that outperform currently are less likely to continue to outperform, while the under-performing funds are likely to catch up. You can try to pick the funds that you think may outperform the STI ETF, but chances are similar to you picking your own stocks that beat the market. It isn’t easy.
- DWS SGP SMALL/MIDCAP: 7.6%
- Nikko AM Shenton HIF Singapore Dividend Equity: 5.8%
- Aberdeen Singapore Equity Fund: 5.2%
- NIKKO AM Shenton Thrift Fund: 4.2%
- STI ETF: 4.2% (factored 0.28% brokerage fee)
- Amundi Singapore Dividend Growth: 3.7%
- DWS Singapore Equity: 3.7%
- United Singapore Growth Fund: 3.7%
- Schroder Singapore Trust: 3.6%
- LEGG MASON WA Singapore Opportunity Trust: 3.4%
- LionGlobal Singapore Trust: 1.2%
Comparing 10-year performance (with Sales Charge)
There are only 3 funds with 10-year history. STI ETF is ranked in the middle and once again, it shows that it is indeed the market average returns. Never the best but never the last.
One interesting point to note is that Aberdeen Singapore Equity Fund is outperforming STI ETF lesser in the 10-year period as compared to the 5-year period. Aberdeen was outperforming STI ETF by 24% [(5.2%-4.2%)/(4.2%)] in the 5-year period. But if we look at the 10-year returns, Aberdeen was only outperforming STI ETF by 9% [(10.9%-10.%)/(10%)]. This is what I mean when I said in the above paragraphs that funds tend to revert to the mean over the long run.
- Aberdeen Singapore Equity Fund: 10.9%
- STI ETF: 10.0% (factored 0.28% brokerage fee)
- LionGlobal Singapore Trust: 8.7%
I hope this short study about investment returns gives you a good understanding about the risks and rewards when investing money with professionals. No doubt they are good at what they are doing as we can see signs of out-performance. However, the cost of investing with the professionals is eroding the returns of the investors. The out-performance is not significant if the investment period becomes 10 years or more. With so many investment options, investors have to be more savvy to evaluate and make good money decisions.
- See more at: http://www.bigfatpurse.com/2013/08/comparing-sti-etf-and-singapore-equity-funds-performance/?utm_source=rss&utm_medium=rss&utm_campaign=comparing-sti-etf-and-singapore-equity-funds-performance#sthash.w7FMrOfU.dpufWhat is the monthly Total Return since 2008?
By nature, stock market is volatile. STI ETF is the market so be mentally prepared to ride the roller coaster ride across market cycles of Bull and Bear.
Monday 5 August 2013
Daily Market Summary 2nd Aug 2013
US market up. Blmberg
DJ +0.83% at 15628.
S&P +1.25% at 1706.
Nasdaq +1.36% at 3675.
Japan Nikkei +1.32% as at 8:27am. blmberg
China Avation Oil 2Q13 net profit -6.9% to US$13.4m. SGX
CNA partners chinese state-owned enterprise to develop smart connected cities in China. SGX
Cosco 2Q13 net profit -56% to $12m. SGX
Cosco secures contract over US$170m for one jackup rig. SGX
Dairy Farm HY13 net profit -6% to US$229m. SGX
Hi-P 2Q13 net profit is $10.9m vs a loss of -$2.1m a year ago. SGX
Hong Kong Land HY13 net profit -4% to US$598m. SGX
Keppel secures another jackup order worth US$206m for mexican market. SGX
Ley Choon bags $63.9m new contracts from LTA. SGX
LMIR Trust 2Q13 DPU +17.7% to 0.93c. SGX
Mandarin Orential HY13 net profit +91% to US56.8m. SGX
OCBC 2Q13 net profit -8% to $597m. SGX
OUE 2Q13 net profit -36.1% to $14.6m. SGX
Popular: Closure of Prologue ION store and opening of Borders bookstore. SGX
Roxy-Pacific 2Q13 net profit +10% to $19.5m. SGX
Sembcorp expands energy-from-waste capacity in Singapore with new facility over $250m. SGX
Sembcorp Marine 2Q13 net profit -12.5% to $124.9m. SGX
UOB 2Q13 net profit +9.9% to $783m. SGX
US market up. Blmberg
DJ +0.83% at 15628.
S&P +1.25% at 1706.
Nasdaq +1.36% at 3675.
Japan Nikkei +1.32% as at 8:27am. blmberg
China Avation Oil 2Q13 net profit -6.9% to US$13.4m. SGX
CNA partners chinese state-owned enterprise to develop smart connected cities in China. SGX
Cosco 2Q13 net profit -56% to $12m. SGX
Cosco secures contract over US$170m for one jackup rig. SGX
Dairy Farm HY13 net profit -6% to US$229m. SGX
Hi-P 2Q13 net profit is $10.9m vs a loss of -$2.1m a year ago. SGX
Hong Kong Land HY13 net profit -4% to US$598m. SGX
Keppel secures another jackup order worth US$206m for mexican market. SGX
Ley Choon bags $63.9m new contracts from LTA. SGX
LMIR Trust 2Q13 DPU +17.7% to 0.93c. SGX
Mandarin Orential HY13 net profit +91% to US56.8m. SGX
OCBC 2Q13 net profit -8% to $597m. SGX
OUE 2Q13 net profit -36.1% to $14.6m. SGX
Popular: Closure of Prologue ION store and opening of Borders bookstore. SGX
Roxy-Pacific 2Q13 net profit +10% to $19.5m. SGX
Sembcorp expands energy-from-waste capacity in Singapore with new facility over $250m. SGX
Sembcorp Marine 2Q13 net profit -12.5% to $124.9m. SGX
UOB 2Q13 net profit +9.9% to $783m. SGX
Sunday 4 August 2013
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