Dear readers, the Singapore Straits Times Index (STI) went south by 1.2% yesterday, to reach the 3,089.49 mark. I was not at all surprised at the performance of the STI given what I have shared with readers in all my recent posts.
In fact, given the lacklustre macro environment, instead of having limited upsides for a sustained period, only to give up on the slightest trace of bearishness, and then inch up again and with process repeating itself, it will be good for the STI to correct to a level that is more representative of today’s new Covid-19 normal.
A more representative level to me will be about 2,600 to 2,800 level for the STI now. This level will signal a level that is more balanced for the Singapore stocks markets since the local investors’ mindset is always to equate the 3,000 mark of the Straits Times Index as a good stocks markets with potential to go higher up. But look at all the factors around us, I don’t see any positive catalysts for the Singapore stocks markets, hence the STI should trade at below 3,000. I would give the band of 2,600 to 2,800 level for the STI to consolidate in the near term.
At 2,600, that means a 16% correction from the current 3,089.49 level of the STI. At this level of 2,600, I will think it’s a good interim entry point for long-term investing into the STI.
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