Is Singapore Market the worst stock market?

DISCLAIMER: THIS IS NOT A BUY OR SELL CALL. Do your own due diligence before investing

"Eh Singapore Market boring LAH!"

"STI worst performing index"

" Singapore is all about banks and REITs - For dividend/income play".

I believe these are some of the opinions you must have heard that lead you to stray away from investing in Singapore or your investment journey.

I personally do not like the STI index but that does not mean that Singapore Stock market has no opportunities. I am writing this post is to demystify some misconceptions about Singapore Market and gather some patriotic support for Singapore.

TL:DR

1. Opportunity in STI

2. The gold is hidden outside of STI

1. Opportunity in STI

STI is a bad long term passive investment strategy. Why?

The link sums up 3 main reasons why many (or I) dislike STI .

Where is the opportunity?

STI has high weightage on cyclical stocks. Cyclical means that there is a pattern of up and down.

Source: Yahoo Finance

Events of Strong dips:

1998 - Asian Financial Crisis

2001 - Argentine Financial Crisis

2003 - SARS

2008 - Global Financial Crisis

2020 - Covid

Just from trend alone, STI will increase over the long run.

Idiot proof tip: Take advantage of the low price and dollar cost average. When the Singapore market recovers to a bull run, you can take profit. BUY LOW, SELL HIGH.

Fundamentals: Singapore handles COVID better than US. Thus, when COVID is gone, you may expect for a recovery run.

However, I feel that STI is not a good indicator of Singapore's performance

2. 'Gold' is hidden outside of STI

Source: Singapore GDP 2019 from Singstat

99% of Singapore Business are SMEs with a market capitalisation of less than SGD$1 billion. They generate 44% of Singapore GDP. Furthermore, STI is concentrated on Banks, REITS, Developers which does not have a holistic view of Singapore industry

Here are some stocks that have been uncovered and appreciated by investors:

a) Riverstone Holdings

Malaysia-based Riverstone is a global market leader in the manufacturing of nitrile and clean room gloves as well as premium nitrile gloves used in the healthcare industry. Recently, they have completed a share bonus (1-2). The share price has an increase of 1800% from 0.13 in 2010 to 2.35 in August 2020

b) AEM

AEM is a solutions provider for the back-end testing of the semiconductor manufacturing process. It works closely with its key customer, Intel, to design, engineer, and manufacture the test handlers. The share price has an increase of 537% from 0.80 in Sept 2017 to 4.30 in Aug 2020

c) IFAST

IFAST is financial technology ("fintech") group that owns a platform for the buying, selling and trading of securities such as unit trusts, bonds and equity securities.

The share price has an increase of 340% from 1.11 in 2014 to 3.80 in Oct 2020

Conclusion

There are many interesting and undervalued companies in Singapore waiting for Singapore Investors to uncover, valuate and appreciate.

Choosing a good company, knowing why the stock price moves up. Waiting patiently for people to discover. The journey is definitely not easy.

I am personally confident in future economic and political outlook in Singapore. That is why Singapore is the first market that I start my investing journey. Are you confident in the prospect of Singapore?

Guess the stock with the highest gain this year?

Clue: Medical stocks

What are some S-stocks you find undervalued? Comment the stocks that are rewarded after years of patience.

Note: The opinions expressed in this opinion are for general information purposes only and are not intended to be and do not constitute as financial advice. You should seek advice from professionals before making any investment decisions. Also, past performance is not a guarantee of future returns nor is it indicative of future performance.

Disclaimer: I hold positions in Top Glove