BT INVEST

A Personal Finance and Investment Arm of The Business Times
MARKET TODAY:

Archive

PREPARING FOR WINTER AFTER A FANTASTIC WINNING STREAK

By Gabriel Yap

PREPARING FOR WINTER  AFTER A FANTASTIC WINNING STREAK

The FTSTI index ended July up 3.2% to 3,330 points, lifted by the continued momentum in banks, properties and REITS. Surprisingly, the oil & gas sector also finally stirred upwards.

We had an eclectic combination of good news –

  1. The continued decline in US$/S$ as the Federal Reserve continued to guide for gradual rates increases even as it indicated that the contraction of its US$4.5 trillion balance sheet may begin as early as Sep.
  2. News of buyout offers on United Engineers which lifted many large-cap property stocks
  3. Steady release of 2Q2017 corporate results which have continued to surprise on the upside

On the macro front, Singapore’s 2Q2017 GDP would be released in August and advance estimates point to a 2.5% Y-o-Y growth. This would indicate that the sequential Q-o-Q growth would be 0.4%, a most important figure for momentum traders.

SREITs were amongst the first to release their 2Q2017 results and earnings so far have either come in a notch better than forecast or in line with market expectations. The much feared negative reversionary rentals for Retail Reits was over-rated with a few Hospitality Reits surprised on the upside.

Like the smart investor, I always look forward after a great month of quarter with guarded conservatism. In my current crystal-ball, September is certainly a month where investors should be cautious of as –

  1. It will be a month of sequential meetings for all the key central banks – the Fed, ECB and BOJ will all have to decide at that meeting if indeed, rates are increased or balance sheet size should be shrunk.
  2. Political tensions between North Korea and the US relating to the firing of intercontinental ballistic missiles have already notched up fierce arguments from both sides.
  3. The FTSTI would have gone for more than 2 years without a correction since the tensions related to BREXIT fears last year.

With such overhanging events, perhaps the smart investor should pause and take time off. For me, I have returned to my winter home in Melbourne to enjoy the cool mountain air, great food and wine while preparing my investment portfolio for a possible winter-break.

Gabriel Yap
Gabriel Yap

Mr Gabriel Yap was an eminent stockbroker and investment banker who retired in 2009 to devote himself to philanthropy. He is well-known as the Investment Guru, having being regularly interviewed in the news media like Channel News Asia, Bloomberg TV, CNBC, MediaCorp Radio. Together with the prestigious Fortune Times, Mr Yap hosted the inaugural Asian REITS Pinnacle Awards 2016 in Singapore. Mr Yap was both Chairman of The Future of REITS Forum as well as Chairman of the Fortune Times Asian REITS Pinnacle Awards 2016 Judging Committee comprising of the leading CEOs, deal makers and who’s who in the Asian REIT sector. Mr Yap also chaired the recent Fortune Times REITS Symposium 2017.

Mr Gabriel Yap is also one of the esteemed judges for the prestigious Singapore Corporate Awards 2017 which was first launched on 19 Sep 2005 as the umbrella awards for exemplary corporate governance practices for listed companies in Singapore.

Mr Gabriel Yap has lectured for almost 30 years – He has lectured at the famous Asian Development Bank, Monetary Authority of Singapore, Institute of Banking & Finance, SGX, ASME, SIAS and Share Investors. He has also trained the Top Producers at major insurance companies and banks. He has also trained students for the grueling CFA course and has lectured and delivered academic papers internationally.

Mr Gabriel Yap has also sat in the EXCO of the 13th Council of the Association of Small & Medium Enterprises, ASME. Mr Yap has also served in the EXCO of the Securities Investors Association of Singapore, SIAS.

Mr Yap shutters between his homes in Europe, Melbourne and Singapore.