Friday, 21 February 2014

Where to invest in Asia ...

In 2001, we heard about the term 'BRIC', when it was first introduced by Jim O’Neill, an economist at Goldman Sachs. About last year, I am sure most of you must have read or heard, the other term, the Fragile Five. Someone from Morgan Stanley decided that due to the various economic changes(negatively), the economics of BRIC is going to be going downhill. So what does this mean to investors?
Let's first look at some of the data from the wordbank, in terms of the current account balance for these countries, in particular, Brazil, Indonesia and India. Why these 3 countries, well, because they are having election this year, and historically has shown that most stock market react positively during the election year.
worldbank data
Above is the chart from the wordbank, Indonesia has the least current deficit follow by Brazil and then India. In another graph below, it shows the comparison of the current account for Brazil and Indonesia. At least from the graph, it shows that Indonesia is trending up strongly.

Now, let's look at how the Indonesia stock market has performed, we used the Market Vectors Indonesia Index ETF (IDX). In the chart below, it has managed to close above the weekly 20MA and weekly 10MA is trending up which is a positive sign.
At the current PE ratio, is it still cheap?

Wednesday, 19 February 2014

Gold correction over ...

After a major correction, gold has lost it's shine and people have not been talking much about them recently. Most of the people were worried about the tapering, stocks and interest rates, this might be a good opportunity to relook at gold again.
In the recent Barron's Roundtable, gold and gold mining stocks were highlighted by few gurus, and in particular George Soros had added gold mining stock into his portfolio. One of which is Gold Miners ETF (GDX).

Let's take a look at the daily chart then follow by the weekly chart.

In the daily chart above, the last closing price is above the 200d MA, this is quite positive, and the 10d and 20d MA has also trended up. When will the 50d MA cross 200d MA, which is the technical divider between the Bull and Bear.
In the weekly chart above, the closing price is above the weekly 20 MA, and 10 MA has trend up as well.

So who's been buying for the past few weeks, when not many people are looking and can this upward trend continue?

Tuesday, 11 February 2014

Stock Watch: Suntec Reit

Yes, this post is about Suntec Reit again. The last 2 weeks we have seen how the Reits have corrected due to the start of the QE tapering and the possibilities of increase in interest rates(nobody knows when), although from one of the FOMC meeting it was understood that the low interest rate should last till 2015. Reits are not the only sector that is affected, across the market, all the counters have reacted negatively too.

As I was doing my lazy surfing, I came across a few interesting posts by fellow blogger about reits and suntec reits. One of the post is from; he has been tabulating the reits data for a while and it helps one to do analysis easily. In another post, he also included charts from most of the Reits, and if you looked at them, most of them are either in downward trend or in consolidation.

And you may ask, why Suntec Reit. Comparing to the other reits, it is one of the highest debt gearing, which is a concern. And apart from trading below it's NAV, yield about close to 5.8%, these are also not too compelling to be in one's shortlist.

However, looking at the daily and weekly chart below, do you noticed that it is different from the other reits counter. Would this trend continue ...

Daily Chart

Weekly Chart

Saturday, 8 February 2014

Market watch: STI 8Feb

Is the selling over or is the rebound sustainable, that's the question that most of us wants to know. Although, STI has recovered a little, the 50d MA is still below the 200d MA. The weekly chart below is also showing weakness, with 10 MA trending downwards. Pivot is at 3105.

On the bright side, the party still continues with VIX below 20. If it goes above 20, one should start leaving before the party ends. :)

Counter debrief: SMRT & Suntec Reit

Happy Lunar New Year to all, in this post, I will be sharing 2 of my favourite counters.

The first one is one which most of us would have and owned at some point of time. I owned this stock since IPO and along the way, I add some as well. Most of us owned the stock for these reasons previously:

  1. defensive stock with good dividend yield
  2. well run company previously with exposure and revenue from rental shops and advertisements
  3. part of the growing story to cater for the 6 million population
In Jan 2013, I sold the stock after news of the CEO Saw had left(about a year, ok, I gave chance to new management) and problems start to surface. In fact, if you looked at the chart below, based on TA, I should have sold even before the first blue bubble and not later. I was like most of you, hesitating and convincing myself(ignoring the TA indicators), that I am in for long term and even if the stock price is down, I am still getting dividends. Fortunately, I sold eventually, and now looking back, it was a right decision because now I have the capital from the sale and the choice of buying at even at a lower price if I want.

This post again to remind myself dont gave yourself reasons against what the chart is telling you.
The next one was Suntec Reit which again, gotten from IPO and then added some along the way. Way before Lehmen crisis, it hit all time high(i think was $2), at that time, the HK boys(major shareholder) were selling the stocks too. Being a long term investor(i thought), i hold on for the dividends, but the share corrected and went to below $1. And in 2013, it managed to repeat the same cycle again, and this time, I followed what the chart told me and took profit as shown in the blue bubble. 
This tells us that there is cycle to any business and investment including shares, if I had make use of the cycle, I would have made not once but twice.

Saturday, 1 February 2014

Singapore 50 - Still land of opportunities ...

Singapore has started preparation and getting ideas from it's people for its 50th year independence celebration in 2015. 50 years is deemed long by some people, but comparing with other developed nation, we are still a young one. In the recent years, there were many issues raised such as high hdb price, runaway condo price, high car price, food prices have also increased, everything has gone up except for salary which has not kept in pace. The young (aged 20 to 25) started asking about their future and if there is still opportunities in the land where they were born. More than 1000 students attended the Ministerial forum 2014 with PM Lee recently to understand his thoughts on these.

As I gathered with a couple of friends during our usual CNY gathering, I looked at them and they are pretty successful in their own ways. Though not very rich, all of us have a roof over our head, all drive car because of needs, kids in neighborhood school and all doing well in their career. We are the Generation X and our 2 generations before us had contributed to growth of Singapore and now in my generation we are still contributing.

Every generation had its challenge, the earlier generation had theirs. In our generation, We witnessed the fast transformation of this country, from a ticketed non-aircon bus to now using card. There is now also more competition in school and in jobs, given our open economy. In job, we had to compete with the FT, some got displaced of their job. I was fortunate to have my previous 3 very professional FT hiring manager. We also experienced firsthand dot com crisis, 911, SARS and Lehmen collapse. These had taught us to understand that if one is able to use the cycle to your advantage, the rewards will follow. This is not the first time COE is so high, it had happened before. And if it's high, then don't buy now cause knowing that it will normalized some time in future again, though no one knows when. Same goes to property price as well, it reached all time high before it crashed during the Asian Financial crisis.

To the young, importantly, spend less than what you are earning and don't make common sense financial mistake because just one mistake it can set you back many years. If you abide by these rules, you should be comfortable as these were the rules that my friends and I followed as well. With the amass cash, your opportunity will come in the next cycle.