Singapore Stocks Are Floating on Foam

[cyclone]

To think that Singapore Stocks were laggards for several years, and takeovers are bloosomming.
What is your opinion ?

Singapore Stocks Are Floating on Foam

By Christopher Langner
March 6, 2017 10:21 PM EST

Read the shipping and offshore oil industry news in Singapore and you'd be forgiven for imagining the country's stock market must also be in the doldrums.

A string of restructuring and bankruptcy proceedings was capped last week with reports that distress at oil-services company Ezra Holdings Ltd. has deepened. Ezion Holdings Ltd., one of the biggest companies in the sector, also recently posted its worst loss since the Asian financial crisis.

Regardless, the Straits Times Index is the second best performing stock benchmark in Asia this year, up 11.2 percent, only slightly behind India's Nifty 50.

More details in https://www.bloomberg.com/gadfly/article...ng-on-foam

[Porkbelly]

The MSCI mirrors the FTSE STI.

Both index components have the Big 3 banks.
DBS share price has shot up, pulling the index higher.
so has KepCorp.

Otherwise, the STi ( and the MSCI) would have remained below 3,000.
Despite the 100% certainty of the Fed raising interest rates, REITS here are
holding on to highs. Lots of traders trying to make quick money. Lets see
what happens after 15 March.

[Dosser]

The MSCI mirrors the FTSE STI.

Both index components have the Big 3 banks.
DBS share price has shot up, pulling the index higher.
so has KepCorp.

Otherwise, the STi ( and the MSCI) would have remained below 3,000.
Despite the 100% certainty of the Fed raising interest rates, REITS here are
holding on to highs. Lots of traders trying to make quick money. Lets see
what happens after 15 March.

I would not say that REITs are holding on to highs. They are typically down 15% to 20% from their highs in mid 2015 or late last year. Tendency to drop when US interest rates are about to be or are raised, or poor results announced, and then creep up slightly when the news is quiet. I'm doubtful that Singapore interest rates will increase in lockstep with the US. Singapore interest rates have tended to be low relative to US and UK, at least before all the QE started flying about. If the FED gets aggressive, I suspect that MAS will let the S$ take the strain, rather than pushing up local interest rates in the face of a sluggish economy and falling property market. Rather than focus on interest rates exclusively, rental trends for the relevant sector will also have a major effect. There is, however, a risk of a general dip across the market if the 'Trump bump' reverses direction.

[jjlim84]

Well, saying that property stocks and REITs will go down once interest rate rises, is like predicting the ice cream seller will earn more if the weather gets hotter. I wish the world was so simple and single factored

Am surprised though about the rebound of OnG stocks, as based on information from friends working in the sector, it's still not doing well. STI though has not performed well last year as compared to its peers, probably that's why investors see some undervaluedness in it and we are seeing the increase in volume coming back

[Big Toe]

Rather the big blue chips, there is more value in the small cap.
While growth is not the theme here but many are net cash and with either an improving or stable business.
Add that to a decent dividend yield, I see much more upside for quality small cap. It also does not take too much money to move the needle, in fact, accumulation is tedious and long drawn process due to the low trading volume, lack of liquidity on some of these companies.

A few of the business are good candidates to be taken private. Not too difficult for the major shareholder if the company is cash rich to begin with. After taking it private, listing cost, time is saved. And major shareholder will have have profits all to himself.
Long overdue for a small cap bull run...which I think is already happening.

[sgmystique]

Rather the big blue chips, there is more value in the small cap.
While growth is not the theme here but many are net cash and with either an improving or stable business.
Add that to a decent dividend yield, I see much more upside for quality small cap.  It also does not take too much money to move the needle, in fact, accumulation is tedious and long drawn process due to the low trading volume, lack of liquidity on some of these companies.

A few of the business are good candidates to be taken private. Not too difficult for the major shareholder if the company is cash rich to begin with. After taking it private, listing cost, time is saved. And major shareholder will have have profits all to himself.
Long overdue for a small cap bull run...which I think is already happening.

You have hit the nail on the head, Big Toe! The feel I am getting from 2017 so far is that Quality Small Caps are going to be the theme for 2017. There are quiet a few small/ very small caps (Market cap< 300 mil) that offer very decent value, decent dividends year on year yet have practically been ignored by the market for years.

It is high time for the markets to start paying some attention to them!

[Big Toe]

Indeed. Some are in ultra low tech industry that has been around for many decades, unlikely to be disrupted, generating a decent amount of free cash and giving out dividends. I am one who likes to be rewarded while waiting.
It is a matter of time before the cash horde gets too large to ignore, add a reasonable low single multiple PE valuation to the business and it is close to a no brainer.

There is also a recovery O&G theme but of which the time-line is unsure.
There is also a rate hike earnings catalyst + less bad debt theme on financials. Time line slightly clearer than O&G.

I would still favor more small cap and maybe less mid-large cap(with impenetrable moat). Barring any huge external shock, things should be quite stable for 2017. Also Trump(aside from his wild tweets) seems quite tame thus far.