Singapore narrows GDP growth forecast for the year

[CityFarmer]

Cant be sure about the forward PE of STI, but current PE is about 20? Not exact but should not far off as well.
While the banks are looking rather attractive the rest does not look like a bargain to me. Genting is looking far too expensive at current levels. (But then again genting is expensive at any price )

Look again at all the Constituents of the STI, where is the growth in earnings going to come from? Maybe a recovery in oil price will help companies like keppel and the commodity firms. Banks will get a lift from rising interest rates, but little else can be seen that will boost the STI greatly.

I think there are still pockets of opportunities if we dig deeper in the listed companies and in Sg and US. But for most part, i do not foresee any catalyst pushing the STI very much higher. At best i see banks moving higher in the near term.

Let me provide some numbers.

Based on shareinvestor.com, the up-to-date (rolling) PE of STI is 15.9, and PE (based on latest completed FY) was 15.6. The data is historical, not forward.

[swakoo]

According to Sat's BT:

In her "Singapore market: Excessive selling amid regional capital flight", Credit Suisse private banking and wealth management's head of South-east Asia research Kum Soek Ching said that the Singapore market is now trading at one standard deviation below its historical average valuation, with a 12-month forward price-to-book (P/B) of 1.38 and price-to-earnings of 13.7 due to collateral damage from the surprise yuan devaluation in recent days.

And according to Bloomberg, the Sgp market is the 2nd worst performing among developed markets YTD after Greece.

[Image: stock-market]

[BlueKelah]

The low valuation of SGX could maybe be due to similar conditions as in China few years back when their SSE was at 2000+ levels. Back then every investor was chasing property assets, all the banking credit was going into property. Then as property peaked, investors and companies piled into stocks, funded by a lot of margin trading.

In singapore before the tightening with the TDSR, everyone was chasing property also and no one was chasing stocks much so SGX dun move. In the past year as property prices have moderated, people should start chasing stocks. But unlike in china, where you can get easy margin funding from online companies to buy more stocks beyond your means, in singapore this is not the case with our more tightly regulated financial market. So without easy bank credit for stock asset, there is no way any liquidity is flowing into the SGX and it is no wonder STI will just flounder.

If not for the rumors of a link up with SSE/HKSE couple month back, STI would not have hit 3500+ points, we'd still be trading in the 3000 +- 10% range. The best way to invest in SGX for now would be probably to go for passive investing in strong dividend companies as chances of any big moves in the index and market are very unlikely going forward. At least until the global economy recovers and singaporean companies go booming again.

[Big Toe]

The relatively low valuation also reflects the low earnings growth.
In any case, agree with BlueKelah if you have to invest locally, being vested in strong dividend paying companies is the way to go. I see it as a bond, with a more attractive floating coupon rate and slightly higher risk on capital.

[Porkbelly]

Finally, some real movement...
Its been very, very stubborn. I am impressed with the traders, brokerages... lots of guts, holding power and
the easy cash is still affordable.. impressive attitudes... deep, deep pockets.

lets see if the STI can go down past 2,900 by monday..
and maybe fear is just a tiny blip in the distant horizon.