Dear readers, as at 19 Mar 2021 (Fri), the Singapore Straits Times Index (STI) was at 3,134.54. While I have been expressing my views that the 3,000 level of the STI look set to be a key resistance (and that the STI should still consolidate around this level), the fact of the matter is that the Singapore stocks did cross the 3,000 level mark and more recently the 3,100 level. Year-to-date, there have also been at least ten Straits Times Index (STI) stocks that already registered more than 10% capital gain in the year-to-date.
So, are there further upside for Singapore stocks? Well, the instant reply to the above question is to look at the macro catalysts for a bullish stock run. As of now, there seem to be not many of these catalysts except for a possible gradual recovery from the Covid-19 pandemic. Also, US and China ties remain not as warm.
Singapore’s Straits Times Index (STI) is currently trading at an estimated Price-to-Earnings (PE) ratio of 16.2. This to me is not as cheap as before when the STI typically traded at Price-to-Earnings ratio of 11.
But the past is the past, looking at the current stocks markets now, Singapore’s stock market by virtue of the PE ratio is still not that expensive if we compare with the following overseas stock markets (as at 19 Mar 2021):
1) US S&P 500: 22.7
2) US Dow Jones: 21.4
3) China SZComposite: 21.1
4) Thailand SET: 20.2
5) Australia: 19.3
6) Taiwan: 17.4
7) Indonesia: 16.9
There could hence be potential for Singapore stocks to trade at higher PE ratios if Singapore’s stock markets did indeed play some catch-up in term of valuation with the other overseas stocks markets.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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