Dear readers, we are into the start of a brand new year!
Till today, almost after two weeks into the brand new year, I still read of analysts giving some positive analyses on the Singapore stocks markets for this year.
Recommended stocks continue to include Singapore’s banking counters (i.e. DBS, OCBC and UOB), as well as conglomerates listed on SGX: Keppel Corporation, Sembcorp Industries, Seatrium, etc.
The bullish sentiment for the Singapore stocks markets this year is inevitable for the following three reasons in my opinion.
Firstly, following the stellar performance of the Singapore stocks markets last year, it seems simple to extrapolate the strong performance of the markets to this year too, especially riding on the bullish sentiments of local investors for the Singapore stocks markets after a strong 2024.
Secondly, the recommendations to rejuvenate the local bourse are expected to be released and with implementation expected to commence. Many are of the view that the measures are expected to fuel the Singapore stocks markets.
Last but not least, there have been several analysts who are of the view that the US stock markets under President Trump will generally have a good performance.
However, as many of us would have known by now, the past is often an unreliable predictor of the future.
And as we all would have know, stock markets move in cycles.
The Singapore stocks markets last corrected in Aug 2024 (roughly half a year ago) when the benchmark indicator of the Singapore stocks markets, the Straits Times Index (STI) reached 3,198.44. Since then, the STI has been on its way up north.
While the STI did indeed close year 2024 with a stellar note, I would still think that the performance of the STI last year was driven mainly by the 3 banking stocks and some other STI stocks which also constitute key weightage in the STI. The STI performance last year was not indicative of the market-wide performance for our local bourse last year.
I believe as we usher in Trump 2.0 in the coming days, there will be the start of market volatilities as market watchers prefer to cash out and wait on the sidelines for better clarity. In fact, the STI has started to trend down in the past few sessions.