(By Roger Tan, SIAS Research)
Singapore’s Straits Times Index (STI) fell 1.9 per cent last Monday following a 380-point drop in the DJIA two Fridays ago, but the STI managed to regain some grounds over the week as the US market recovered. The STI closed the week 0.4 per cent lower, while the S&P 500 closed 2.5 per cent higher.
The World Cup is here and markets are expected to stay “quiet” over the next few weeks as many investors retire temporarily from their investing “career” to support their favourite teams. However, we also do not expect investors to totally ignore the market as the danger of a bear entering the market lurks.
However, as we mentioned in our last Weekly Market Thoughts, we believe this may be the best time to pick up equities while others are not focusing on the market. PE ratios are now relatively more attractive than in 2009 and investing now may just reward those who dare to take the plunge. Look into buying ETFs on the US and Asia ex‐Japan markets, such as the Lxyor’s S&P and MSCI Asia ex‐Japan ETFs.
As for individual stocks, we continue to urge investors to keep their eye on the seven companies we have highlighted in the Asian Investment Conference and Exhibition (AICE) last week – especially Marco Polo Marine and Q&M. The current lower market prices have made these value companies look even more attractive as potential returns are now higher.
