Dear readers, much has been said of the Singapore Stocks Markets rally. Is there another possible reason for the Singapore Stocks Markets rally?
Before we go into the possible reasons, let us have a quick recap. The Straits Times Index (STI), benchmark of the performance of the Singapore stocks markets is now at a 17-year high since 2007. The STI is now around 3,640. To put this in perspective, the STI as at 29 Dec 23 was 3,240.27 and hence just for the year-to-date, the STI is already up around 12.3%!
Many attribute the rally in the Singapore stocks markets to the cut of interest rates by the US Federal Reserves. It is only reasonable. A cut in interest rates will make equities attractive (and bonds less attractive).
But could there be another possible reason to the rally in the Singapore stocks markets especially given the fact that not all bourses across the world would gain a double-digit % gain with the announcement of the US interest rates cut.
This is why I thought another reason for the strong showing of the Singapore stocks markets could be the announcement of the high-powered panel to look into revitalizing the local bourse on 2 Aug 24.
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On 2 Aug 24, the STI closed at 3,381.45 and hence from then to now, the STI has rallied around 7.65%. This is a highly possible reason: institutional investors, both Singapore and overseas are highly encouraged at the news of authorities to inject a fresh vigour to the local bourse which has become lacklustre in recent years. Their encouragement via injection of funds, purchases of stock send the Singapore stocks rallying. Coupled with the investors’ encouragement, the US interest rates cut further boost the rally of the Singapore stocks markets.
Singapore stocks markets can be deemed boring in view of the range-bound trading of the STI for many years already. Proponents of the STI lauded the defensiveness of the Singapore stocks markets. Much has been said of the ongoing review of the Singapore stocks markets and I hope to see concrete large strides towards the best outcome for investors from this review.
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