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PR Newswire
08-03-2011, 07:55 AM
Whatever the article says, the people mentioned within are still speculators, waiting for price rises to justify their purchases. Whether it is the Singapore market, US Market or Hong Kong, there will always be prices to "chase". The question is can one obtain a decent and consistent return? 
Mar 8, 2011
Retail investors rush to Wall Street
Singaporeans drawn by undervalued shares, reduced fees, cheap US$
By Yasmine Yahya
Increasing numbers of Singaporean investors are taking their cue from the big global funds and rushing to invest their money on Wall Street.
The attractions of undervalued American shares, reduced trading fees and the cheap greenback make Wall Street a more enticing prospect than the lacklustre regional bourses.
Global fund managers have already cottoned on. They have been pulling billions of dollars out of emerging markets in recent months for the traditional security of developed economies.
Emerging-market stock mutual funds have just had their sixth straight week of outflows, Citigroup said. Strategist Mark Rosgen noted that US$2.5 billion (S$3.2 billion) was pulled out of these funds in the week ended last Wednesday, up from US$1.9 billion the week before.
Mr Hugh Young, managing director of Singapore-based Aberdeen Asset Management Asia, noted: 'To be honest, I think the unrest in the Arab world and rising inflation have been an excuse.
'What I really think is happening is that these funds made a one-way bet for a few years on the markets that did terribly well, and now they feel those markets are overvalued. It happens all the time.'
Whatever the reasons, since the start of the year, global funds have committed US$29 billion to US equity funds.
Retail investors here are clearly taking note of these numbers and following their lead, buoyed by the knowledge that many US shares are undervalued while trading fees there have plunged.
'In the fourth quarter of 2010, we observed a sharp increase in the revenue generated from trades done in the US market, at approximately 40 per cent over the third quarter,' noted Mr Daniel Kwek, head of retail operations at Kim Eng Securities.
'In the same quarter, we also saw a 20 per cent increase in the number of trading accounts opened for the purpose of trading in the US market.'
Other brokerages have also spotted the trend.
DBS Vickers said the trading value invested by its clients in US shares jumped 200 per cent in the last three years.
'We have been seeing an increase in trading in foreign markets in recent years, especially in the US market. It started as early as 2007 and accelerated from the end of 2008,' a spokesman said via e-mail.
'One possible reason why investors are drawn to the US stocks could be because of the bargain basement prices caused by the collapse of the US sub-prime market.'
Similarly, Phillip Securities said its clients' trading value in US shares increased by more than 200 per cent between 2008 and 2009, but dipped slightly last year.
'US stocks are still trading at reasonable valuations compared to the prices imposed prior to the financial crisis,' noted Ms Margaret Yeoh, head of its global markets unit.
'In addition, aggressive competition to capture the growing market share of Singaporean investors trading in US shares has led to a lowering of brokerage fees, which has made it even more affordable for investors to buy US stocks.'
Investors told The Straits Times that they felt they could reap more gain from Wall Street than in the local stock market - and at a faster pace.
IT specialist Er Kim Yong, 28, said he has been able to gain up to US$1,000 from single-day trades - buying a stock and then selling it within the same trading session.
'I have some money in the Singapore market but I treat that like a long-term savings account, as I feel that it's rather stagnant,' he said.
'But with the US market, it's much more volatile so usually I will hold a stock for a few days and let it go.'
Mr Er began trading in US shares about a year ago and prefers automobile, technology and financial plays.
His best investment so far: Seagate Technology, whose share price soared almost US$4 over a week as rumours circulated that it was a takeover target. Mr Er pocketed a handsome US$6,000 in profit as a result.
Company director Michel Ng, 38, said his best-performing investment has been LV Sands. The stock was hovering around US$10 when he bought it in 2009 but is now worth more than four times that.
He has been trading in US shares for over five years but is looking to focus all his energy on Wall Street.
'I'm now trying to exit the Singapore market as much as I can so I can put all my money into the US,' he said.
Besides offering higher gains, the US market, Mr Ng said, is also much bigger with a lot more participants, which makes it difficult for any one fund to sway the direction of a particular stock.
And this is not just a trend that is growing among younger investors with higher risk appetites.
Retiree John Ang recently began dabbling in the US stock market in the hope of obtaining higher returns for his retirement savings.
'A lot of the stocks in the US are still undervalued now so I think there are a lot of gains to be made,' he said.
He has bought a few financial stocks, including Citi at about US$4.
'Even if it does not go back to its peak price of about US$30, I should still make some gains, and it can't go much lower from here.'
While some investors are enthusiastic about trading on Wall Street, others are still holding back, mainly due to concerns that exchange rate fluctuations will erode any gains they might make.
'You are not just taking a risk on the stock, but the currency too,' noted sales manager Roopert Huang, 29.
'Assume you buy your stock at US$1 and it goes up by 20 per cent two years later. If the currency depreciates against you by 20 per cent, you are back at square one.'
yasminey@sph.com.sg
Mar 8, 2011
Retail investors rush to Wall Street
Singaporeans drawn by undervalued shares, reduced fees, cheap US$
By Yasmine Yahya
Increasing numbers of Singaporean investors are taking their cue from the big global funds and rushing to invest their money on Wall Street.
The attractions of undervalued American shares, reduced trading fees and the cheap greenback make Wall Street a more enticing prospect than the lacklustre regional bourses.
Global fund managers have already cottoned on. They have been pulling billions of dollars out of emerging markets in recent months for the traditional security of developed economies.
Emerging-market stock mutual funds have just had their sixth straight week of outflows, Citigroup said. Strategist Mark Rosgen noted that US$2.5 billion (S$3.2 billion) was pulled out of these funds in the week ended last Wednesday, up from US$1.9 billion the week before.
Mr Hugh Young, managing director of Singapore-based Aberdeen Asset Management Asia, noted: 'To be honest, I think the unrest in the Arab world and rising inflation have been an excuse.
'What I really think is happening is that these funds made a one-way bet for a few years on the markets that did terribly well, and now they feel those markets are overvalued. It happens all the time.'
Whatever the reasons, since the start of the year, global funds have committed US$29 billion to US equity funds.
Retail investors here are clearly taking note of these numbers and following their lead, buoyed by the knowledge that many US shares are undervalued while trading fees there have plunged.
'In the fourth quarter of 2010, we observed a sharp increase in the revenue generated from trades done in the US market, at approximately 40 per cent over the third quarter,' noted Mr Daniel Kwek, head of retail operations at Kim Eng Securities.
'In the same quarter, we also saw a 20 per cent increase in the number of trading accounts opened for the purpose of trading in the US market.'
Other brokerages have also spotted the trend.
DBS Vickers said the trading value invested by its clients in US shares jumped 200 per cent in the last three years.
'We have been seeing an increase in trading in foreign markets in recent years, especially in the US market. It started as early as 2007 and accelerated from the end of 2008,' a spokesman said via e-mail.
'One possible reason why investors are drawn to the US stocks could be because of the bargain basement prices caused by the collapse of the US sub-prime market.'
Similarly, Phillip Securities said its clients' trading value in US shares increased by more than 200 per cent between 2008 and 2009, but dipped slightly last year.
'US stocks are still trading at reasonable valuations compared to the prices imposed prior to the financial crisis,' noted Ms Margaret Yeoh, head of its global markets unit.
'In addition, aggressive competition to capture the growing market share of Singaporean investors trading in US shares has led to a lowering of brokerage fees, which has made it even more affordable for investors to buy US stocks.'
Investors told The Straits Times that they felt they could reap more gain from Wall Street than in the local stock market - and at a faster pace.
IT specialist Er Kim Yong, 28, said he has been able to gain up to US$1,000 from single-day trades - buying a stock and then selling it within the same trading session.
'I have some money in the Singapore market but I treat that like a long-term savings account, as I feel that it's rather stagnant,' he said.
'But with the US market, it's much more volatile so usually I will hold a stock for a few days and let it go.'
Mr Er began trading in US shares about a year ago and prefers automobile, technology and financial plays.
His best investment so far: Seagate Technology, whose share price soared almost US$4 over a week as rumours circulated that it was a takeover target. Mr Er pocketed a handsome US$6,000 in profit as a result.
Company director Michel Ng, 38, said his best-performing investment has been LV Sands. The stock was hovering around US$10 when he bought it in 2009 but is now worth more than four times that.
He has been trading in US shares for over five years but is looking to focus all his energy on Wall Street.
'I'm now trying to exit the Singapore market as much as I can so I can put all my money into the US,' he said.
Besides offering higher gains, the US market, Mr Ng said, is also much bigger with a lot more participants, which makes it difficult for any one fund to sway the direction of a particular stock.
And this is not just a trend that is growing among younger investors with higher risk appetites.
Retiree John Ang recently began dabbling in the US stock market in the hope of obtaining higher returns for his retirement savings.
'A lot of the stocks in the US are still undervalued now so I think there are a lot of gains to be made,' he said.
He has bought a few financial stocks, including Citi at about US$4.
'Even if it does not go back to its peak price of about US$30, I should still make some gains, and it can't go much lower from here.'
While some investors are enthusiastic about trading on Wall Street, others are still holding back, mainly due to concerns that exchange rate fluctuations will erode any gains they might make.
'You are not just taking a risk on the stock, but the currency too,' noted sales manager Roopert Huang, 29.
'Assume you buy your stock at US$1 and it goes up by 20 per cent two years later. If the currency depreciates against you by 20 per cent, you are back at square one.'
yasminey@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/