Dear readers, we are about to enter into year 2021. As of yesterday, the Singapore Straits Times Index (STI) closed at 2,848.14 (29 Dec 20) and this closing has been much commented by many analysts as it is still 12% lower than the close in year 2019 and also lower than the close for year 2018. Let us recap:
31 Dec 2019: 3,222.83
31 Dec 2018: 3,068.76
For me, the key STI level for year 2020 is not the current level but the 2,233.48 level the STI reached in Mar 2020. From this intra-year low point in Mar 2020, the STI has staged a quick rebound of approximately 28% to where it is today. This quick rebound is seen in a similar fashion for many other stock markets. The rebound is surprising to me as I was of the view that the STI having reached the 2,000 level mark would continue to go below the 2,000 level.
The current Singapore stocks markets as measured by the STI is definitely not attractive at all. We must note that 40% of the STI is made up of the three biggest bank stocks here: DBS, OCBC and UOB. These three banking stocks, especially DBS stock are currently not cheap thus I view the current STI is still being held up by the three big banking stocks. If not for the reasonably good performance of these three banking stocks, the STI would be at an even lower level now.
Going forward to year 2021, notwithstanding the STI would be impacted by macro factors, investors may also want to take a look at how the three banking stocks in DBS, OCBC and UOB perform and their impact on the STI. And whether the oft-cited financial corrections which has not happened in more than a decade would hit the stocks markets in 2021.
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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