Dear readers, there are three Straits Times Index (STI) stocks which are currently oversold as the STI undergoes some corrections for the trading week ended 4 Sep 2020. The Straits Times Index now stood at 2,509.64 which is close to the support of 2,500 which I have been saying for some time to be the level of consolidation.
The three oversold STI stocks are:
Ascendas Reit
Keppel Corporation stock
Singtel stock
On Ascendas Reit, this Reit closed at $3.28 yesterday. This Reit closed at $2.97 on 31 Dec 2019 and reached an intra-year high to date of $3.54, an about 19.2% capital appreciation excluding dividends. Yesterday’s correction was about 7.35% off the intra-year high for the Reit
Next, Keppel Corporation stock which closed at $4.36, a level that was last seen in year 2009. Some of the corrections could be attributed to Temasek walking away from a partial acquisition of Keppel Corporation.
Last but not least Singtel stock. Singtel stock closed at $2.27 yesterday which was even lower than the low of $2.28 in March 2020. Singtel’s current showing paralleled that of its performance in 2008 during the global financial crisis.
From my noting, many of the so-called blue-chip stocks which are former Straits Times Index stocks or are still in the Straits Times Index have languished in the recent years. I would think that these stocks have seen their heydays when Singapore was rapidly developing and industrialising during the building up of the nation. After this fast development period, for further growth many of these companies turn to overseas and this is where I think most of them face a lot of competition and challenges especially in this current geo-political decade.
Thus, I believe that the most sensible way to invest in Singapore stocks is through investing in the Strait Times Index itself through the STI ETF (ES3.SI). That way, your investing performance is pegged to the STI itself rather than any individual STI company. The STI is also made of the strongest stocks given the quarterly review of which largest Singapore listed company counters should stay or leave the index. And on top of all these, an investor would still receive dividends. To illustrate, since the March 2020 low of $2.241, the STI ETF ES3.I closed at $2.538 yesterday and this translates into a capital appreciation of 13.3% excluding dividends. A very decent gain and simple investing without the need to pick any STI stocks.