Singapore stocks: Once bitten, twice shy

[donmihaihai]

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.

I can still remember the period when people in forums and blogs were avoiding US stocks(especially tech) and winning a lot with SGX stocks. But most of those from that period are no longer around in forum or blog. Those that are still around are either good investor or just love the game of chance. And good investors usually don’t blog or chat alot because they don’t need to. Similarly, I expect many of the current “investors” to be gone in say next 5 years. Bull suck people in, bear throw them out.
 
Yes, SGX listed stocks look real interesting right now. And I can still remember that SGX stocks was expensive a few years back, and I spent a long time buying nothing.

[¯|_(ツ)_/¯]

100% agree.

Personally, I had been busy buying shares in US, SG and HK.

From my purchase, SGX performance is actually not bad, comparing to HKEX.  To be fair, those HKEX shares that I brought recently were those with China Tech theme and hence gotten bitten down a lot.  

Will continue to monitor and load up more (hopefully).

If you like to eat hamburger, do you want the price to go up?

Gratitude.

[Wildreamz]

People are focusing on the returns of different markets.

I think the focus of the main article and Prof Mak is corporate governance and legal recourse.

[ghchua]

People are focusing on the returns of different markets.

I think the focus of the main article and Prof Mak is corporate governance and legal recourse.

The topics are really related. One cannot expect high valuation and returns in the long term for markets that exhibit poor corporate governance. Which is why emerging market stocks are almost likely to trade at lower valuation than developed market stocks, to factor in all these risks.

[Wildreamz]

The topics are really related. One cannot expect high valuation and returns in the long term for markets that exhibit poor corporate governance. Which is why emerging market stocks are almost likely to trade at lower valuation than developed market stocks, to factor in all these risks.

Agree. But as Prof Mak said:

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.

Focusing on low pricing multiples (may not be a bad thing for potential investors), or poor long-term returns of the STI (probably a bad sign) etc. is focusing on the symptoms, not the cause.

[ghchua]

Hi Wildreamz,

I guess most investors will know that poor performance of Singapore market is not due to corporate governance alone. It is one of the factors, but there are various other issues. As for STI, most of the stocks inside are big cap companies. Corporate governance should be better, but the stocks inside it might be more towards old economy stocks like banks, property developers, REITs, conglomerates etc, which might explain why they underperform in long term. Investors might wish to look at STI for dividend yield and stability, rather than long term big share price appreciation.

As for corporate governance, we know what are the issues. For me personally, it is the Code of Corporate Governance. It is structured as a "comply or explain deviation". I have seen Corporate Governance reports that gave reasons for deviations which are completely against the spirit of it. It is ok to deviate, just need to explain so I can just give some reasons and move on.

[Wildreamz]

I think even within STI, corporate governance is a factor. Thinking about Noble Group, Olam etc.

As for "Old" vs "New" economy, yes, it's a factor (maybe a big factor); but perhaps not the main focus of the original article and Prof Mak's remarks.

Here is another more detailed dissection of STI components, for those interested in the topic: https://www.drwealth.com/why-investors-a...lue-chips/

Why Investors Are Angry With Singapore Blue Chips

[ghchua]

I think even within STI, corporate governance is a factor. Thinking about Noble Group, Olam etc.

If you had been tracking STI, you would have noticed that Noble Group was already out of STI before the eventual collapse. Olam is no longer a STI index stock currently.

[Wildreamz]

If you had been tracking STI, you would have noticed that Noble Group was already out of STI before the eventual collapse. Olam is no longer a STI index stock currently.

I am aware. Although I did not check, I assume their net impact on the STI during the durations of their inclusion should be quite negative (which also let to their eventual exclusion).

[karlmarx]

Chanced upon this 4 years old video which I thought is pretty interesting and still relevant:
https://youtu.be/ZucG7phvqog

I do agree with Wong and think there is still value in selected local small caps. Though my belief is that the returns are safe and modest (not as exciting as he suggested, and provided you did your due diligence). These are not the kind of stocks that will make you Cinderella rich.

But 4 years for anyone in fund management probably feel like more than a lifetime. I do not think most investors will be happy to see that their returns have been flat (assuming that Azure All Star tracks the STI), hence their pivoting into other more marketable funds.

I became more interested in tech stocks with the recent crackdowns in China, but mostly I still struggle to appreciate the majority of them as value investments. Predicting the future is way more difficult than it is made out by course sellers or random internet commenters. But that is what most businesses and investors are trying to do; figuring out the next hot thing is and trying to get in before everyone else.

I don't think it is necessary to commit oneself to be a local market or foreign market investor, crypto or traditional asset investor, or tech or non tech investor. The approach towards products in the investment market should be the same approach towards products from all other markets; look at everything available and decide for yourself what you think will give you what you want. But with even award-winning analysts/fund managers giving up, maybe one may find more value in local small cap stocks than before.