Singapore stocks: Once bitten, twice shy

[karlmarx]

AS a seasoned stock market investor since the 1990s, Ken is no stranger to market fluctuations and paper losses. As of today, the 56-year-old has lost some S$300,000 in the Singapore stock market, while his investments in the United States and Hong Kong have given him sizeable profits. "Retail investors don't have much confidence here, they're getting toasted," he tells The Business Times. "I've lost so much money that I'm scared."

While Singapore continues to be lauded as a financial hub, drawing big business and billions in foreign investment, the local stock market appears to have lost some of its appeal to retail, or non-professional, investors like Ken. Concerns like regulatory lapses and lack of liquidity, he says, have diminished confidence.

"I would generally avoid the Singapore market unless there are sound stocks like the blue-chips," he says, "but I have allocated less for Singapore unless we see a marked improvement in the supervisory environment here".

Some of Ken's biggest losses in the local market to date include S$20,000 in embattled commodities trading company Noble Group, and about S$200,000 in entertainment production company Spackman Entertainment Group which has incurred the ire of regulator Singapore Exchange Regulation (SGX RegCo) for issues related to its management and certain acquisitions, and is currently trading at about 0.5 Singapore cent. The counter's high was 50.5 cents back in July 2014.


It is a similar situation for 65-year-old retiree CK Law. He has been investing since 2000, and has been more active in the stock market since his retirement last year.

...

https://www.businesstimes.com.sg/brunch/...-twice-shy

---

This topic has been repeated quite frequently in recent years. But I think there's a lot of bias so I don't agree with most of it. Although the local market is quieter, I think there are still make instances where valuation multiples can be driven to sky high levels.

Recall how medtec was given the dirty name of a speculative stock when it rose from 5 cents to 20 cents. Even if you bought it at 20 cents you still would be in the money today. There are so many more. So it is hard to argue that there isn't money to be made.

And notice how none of the investors in this story mentioned about their friends making big bucks in Chinese tech stocks. 

S&P may have done superbly since 08 but who knows for sure how it will do in a year's time? I generally think it is a bad idea to jump onto something that's going up just because. (But if it is jumping onto BRK then I guess that's different). 

Maybe BT is just plugging for its robo-investing ad buyers?

Anyway, for long-term investors with little skills/interest in evaluating small caps, I will suggest banks and real estate stocks. The returns won't be spectacular but it will be decent and you can forget about paying attention to it most/all of the time. That's what I will do if I have to pick a stock (definitely DBS) and go somewhere where I can't trade.

[Wildreamz]

Avoiding home bias (https://www.valuebuddies.com/thread-10537.html) probably do more good than harm to your investment decisions.

Peace.

[dreamybear]

I do appreciate the availability of earnings calls transcripts for US stocks. Unless one has the right contacts, it does not seem easy to be able to attend earnings briefings conference calls with research analysts for SG stocks.

I wld think nowadays most listed companies have operations across the world. Borrowing the late Mr Deng's white cat black cat saying, at the end of the day, I guess if one invests according to COC, it may not matter as much where the company is listed as long as it gives the investors value.

Anyway, Prof Mak's full article on his views - brings to mind my BestWorld.....

REFLECTIONS ON THE CURRENT STATE OF OUR MARKET
https://governanceforstakeholders.com/20...ur-market/

[Wildreamz]

Who would want to invest in such a market, where bad companies are everywhere, and companies providing big upside returns are so rare? Investors understand that they will have to accept losses due to business risks, but they should not be expected to accept losses due to poor corporate governance or fraud. Caveat emptor does not mean anything goes.

Rebuilding investor confidence

In terms of rebuilding investor trust, I have been saying for years that we must start with strong investor protection. The developed markets understand that strong investor protection is the bedrock of a strong capital market.

..

We should aim for a market with good quality companies, not aim to increase the number of listings regardless of quality. The KPIs of the management of SGX may warrant scrutiny.

Enforcement actions take far too long and are not sufficiently transparent Enforcement needs to be timely.

I understand the importance of due process but from my analysis of timeliness of enforcement actions in the early 2000s and now, enforcement actions are clearly much slower now.

Great quotes from Prof Mak.

[specuvestor]

I think Prof Mak has helped the local investment community to be more aware of the investment environment and rights

But I think he also need to be pragmatic about the catch 22: we do not have a large market to attract listings just locally and secondly a certain amount of speculation provide price discovery and liquidity. 水至清则无鱼 which is the balance that SGX is still trying to manage after the S-chip and Business Trusts fiascos on one hand and over regulated 2nd board that effectively killed Sesdaq.

If you have large enough domestic markets then the constraints and positioning will be different.

And just today SGX has to think of how to position itself as a viable China A share derivative alternative vs HKSE.

As usual 中庸之道

[Wildreamz]

..
As usual 中庸之道

Do you think current state of SGX is adequate 中庸之道 of investor protection and being an attractive listing destination?

To be honest (and all due respect to all parties involved) I think we are failing at both.

[amperex]

AS a seasoned stock market investor since the 1990s, Ken is no stranger to market fluctuations and paper losses. As of today, the 56-year-old has lost some S$300,000 in the Singapore stock market, while his investments in the United States and Hong Kong have given him sizeable profits. "Retail investors don't have much confidence here, they're getting toasted," he tells The Business Times. "I've lost so much money that I'm scared."

While Singapore continues to be lauded as a financial hub, drawing big business and billions in foreign investment, the local stock market appears to have lost some of its appeal to retail, or non-professional, investors like Ken. Concerns like regulatory lapses and lack of liquidity, he says, have diminished confidence.

"I would generally avoid the Singapore market unless there are sound stocks like the blue-chips," he says, "but I have allocated less for Singapore unless we see a marked improvement in the supervisory environment here".

Some of Ken's biggest losses in the local market to date include S$20,000 in embattled commodities trading company Noble Group, and about S$200,000 in entertainment production company Spackman Entertainment Group which has incurred the ire of regulator Singapore Exchange Regulation (SGX RegCo) for issues related to its management and certain acquisitions, and is currently trading at about 0.5 Singapore cent. The counter's high was 50.5 cents back in July 2014.


It is a similar situation for 65-year-old retiree CK Law. He has been investing since 2000, and has been more active in the stock market since his retirement last year.

...

https://www.businesstimes.com.sg/brunch/...-twice-shy

---

This topic has been repeated quite frequently in recent years. But I think there's a lot of bias so I don't agree with most of it. Although the local market is quieter, I think there are still make instances where valuation multiples can be driven to sky high levels.

Recall how medtec was given the dirty name of a speculative stock when it rose from 5 cents to 20 cents. Even if you bought it at 20 cents you still would be in the money today. There are so many more. So it is hard to argue that there isn't money to be made.

And notice how none of the investors in this story mentioned about their friends making big bucks in Chinese tech stocks. 

S&P may have done superbly since 08 but who knows for sure how it will do in a year's time? I generally think it is a bad idea to jump onto something that's going up just because. (But if it is jumping onto BRK then I guess that's different). 

Maybe BT is just plugging for its robo-investing ad buyers?

Anyway, for long-term investors with little skills/interest in evaluating small caps, I will suggest banks and real estate stocks. The returns won't be spectacular but it will be decent and you can forget about paying attention to it most/all of the time. That's what I will do if I have to pick a stock (definitely DBS) and go somewhere where I can't trade.

The report was not entirely wrong but it did not tell the whole truth. It is true that many retail investors don't make money in the Singapore market. But maybe the reporter should know that most retail investors do not make money in any markets. 
They may claim to make money in US or overseas markets but their profits are likely to be insignificant and transient. They will lose back all they have made and more. If they REALLY did make the money they said they made.

It is not the fault of the Singapore market. The STI may not move much but one can still do very well investing just in local socks. And I mean huge as in 8 figure sums. Not by speculating but by mostly buying and sitting. Not always the same stocks, but sitting on local stocks for years. You make money not by buying on an adhoc basis or simply buying any stocks. Even a strategy as simple as buying the 3 local banks and reinvesting the dividends for years can make you millions. You just need to buy good stocks and keep buying year after year after year. If you have an income, keep adding new money and reinvest the dividends. When you are financially independent from stock investments and decide not to work just reinvest the dividends. Yes simple. But of course it is not easy, like the saying goes.

Dividends from local stocks ( no need REITs ) can be significant. Most people think that owning a private residential property and collecting rentals will beat dividends hands down. My experience tells me just by owning local stocks and collecting dividends is much easier and hassle free. And oh, just imagine the amount of work and angst you avoid if the dividends you collect yearly is equivalent to say NET rentals of a block of condos. 

Investing in stocks ( yes Singapore stocks only ) can be easier, happier and more profitable than most people think. The book common stocks and uncommon profits does not lie.

Maybe the misconception that most ( laymen, professionals, media, academics ) have that investing in Singapore stocks cannot make money at all is helping those who KNOW that money can be made.

[weijian]

Mad respect for Dr Mak as well. As an investor himself + academic, he has both skin in the game and moral authority to call out what is lacking and what needs improvement.

Other exchanges who practise different extent of laissez-faire, have their fair share of blow ups and scandals. Most recent that comes to mind are Luckin Coffee (NASDAQ) and the David Webb's nefarious network. Of course, I don't have the base rates (% of blown ups vs total market cap) to compare between the local SGX market and the foreign markets (US/HKEX) but I tend to like to suspect that the latter is tolerated because on a market cap-weighted basis, it is still giving very good returns recently.

[ksir]

I just cant help to love this kind of news.
It just shows the high pessimism (or perhaps desperation) of the market participants.
Fishing or hunting in such market is great!
Values are there, not even too hard to dig.
It is also a good place for long term business owners to buyout their companies in cheap (many delisting over the years proved this).

Singapore market is (at least to me) a fertile hunting ground for value investors!
In recent months HK seems to catch up as well haha.
I have hard times choosing which good companies with really reasonable valuation to pick up.
I guess this is another moment of child in a candy store.

[Big Toe]

The title does not make any sense. Every market there are winners and losers. Agree that valuation here tend to remain on the low side especially right now, which is great news for longer term value investors.

I dont see how a company doing good business with an ever increasing cash flow and a great yearly dividend can be kept very low for a prolonged period of time. Just be patient and wait.