Akan datang: Chinese money in the Singapore market
While the plummet – and apparent Fed-induced recovery – are still dominating the headlines, there is an announcement by the Monetary Authority of Singapore which should actually get far more press: Chinese commercial banks will be able to invest their clients' money in Singapore stocks. The huge surplusses in Chinese state and individual accounts are well documented. The government in Beijing has decided on a quota of US$16 bln which can be invested in Hong Kong, the UK and now Singapore. This can only be a positive, and will likely outweigh any concerns about a US recession for the Singapore market.
Here is how the Business Times reported the news this morning:
Granted, there are a lot of unknowns. We don't know when these arragements will start to take effect. We don't know how much money will actually come our way. The Hong Kong and UK capital markets, and soon the US, German and Japanese equities markets, will compete strongly for capital from China. And there is no certainty of knowing which Singapore-listed stocks Chinese commercial banks will actually invest in, even if they decide to put some money here.
But the bottom line is: let's get real about the future. The US recession is not the only story in town. Investors ought to take a balanced view, rather than panic and sell out in the childish frenzy of recent days.
Mark Laudi
Here is how the Business Times reported the news this morning:
Yesterday, the Monetary Authority of Singapore (MAS) said it had agreed on a supervisory cooperation agreement with the China Banking Regulatory Commission (CBRC) to allow Chinese commercial banks to conduct investments for their clients under the Qualified Domestic Institutional Investor (QDII) programme. These investments include those in Singapore stocks and funds authorised or recognised by the MAS.
Granted, there are a lot of unknowns. We don't know when these arragements will start to take effect. We don't know how much money will actually come our way. The Hong Kong and UK capital markets, and soon the US, German and Japanese equities markets, will compete strongly for capital from China. And there is no certainty of knowing which Singapore-listed stocks Chinese commercial banks will actually invest in, even if they decide to put some money here.
But the bottom line is: let's get real about the future. The US recession is not the only story in town. Investors ought to take a balanced view, rather than panic and sell out in the childish frenzy of recent days.
Mark Laudi
Labels: banks, China, market decline, Monetary Authority of Singapore, QDII, Singapore Market
Weather and the Markets: Balderdash
It storms, the market goes down. The sun comes out, the market goes up. Sound familiar? Well, it may happen from time to time but its not an exact science. Generally speaking this seems to be the trend though (for whatever crazy reason). Bad weather rolls in and its pandemonium and chaos.
We've never really debated this on the blog but nows the time.
I think its a bunch of bologna. Garbage. Balderdash, whatever you want to call it...weather directly affecting the markets? Give me a break...it's a little rain people!
It's not like we have to deal with hurricanes, blizzards, and freak nor'easters that the eastern seaboard of the U.S. deals with from time to time. In those cases, yes, that will affect the markets only because they are extremes. Hurricanes regularly intrude into the Gulf of Mexico, often shutting down oil rigs cutting energy production thus affecting oil prices, which, have a certain influence on the market.
But here in Singapore, its just rain...big freaking deal.
For instance, today at around 12, some storm clouds rolled in and the market dipped a bit. Hmm. I can recall a few times in the past when it was the same sort of situation; storm rolls in, market dips.
Why is it that this happens from time to time? We have blizzard's left and right in the U.S. where traders are wading through knee deep snow on Wall Street just to get to the floor of the NYSE and things seem to be fine?
For me, I think its a load of garbage that there is an adverse affect on the market (or there appears to be) when it storms. The exchange is indoors people. Come to think of it, the exchange really doesn't physically exist anymore here since its all electronic anyway. It's not like we have things outdoors.
There is a big debate going on about this, so please, post away with your views and opinions. Does weather affect the market? With my tone of the above you should be able to figure out the answer to that for me is a resounding "NO!"
Just google this topic and you'll get a lot of hits.
Leave comments, take a side, and have a great weekend.
We've never really debated this on the blog but nows the time.
I think its a bunch of bologna. Garbage. Balderdash, whatever you want to call it...weather directly affecting the markets? Give me a break...it's a little rain people!
It's not like we have to deal with hurricanes, blizzards, and freak nor'easters that the eastern seaboard of the U.S. deals with from time to time. In those cases, yes, that will affect the markets only because they are extremes. Hurricanes regularly intrude into the Gulf of Mexico, often shutting down oil rigs cutting energy production thus affecting oil prices, which, have a certain influence on the market.
But here in Singapore, its just rain...big freaking deal.
For instance, today at around 12, some storm clouds rolled in and the market dipped a bit. Hmm. I can recall a few times in the past when it was the same sort of situation; storm rolls in, market dips.
Why is it that this happens from time to time? We have blizzard's left and right in the U.S. where traders are wading through knee deep snow on Wall Street just to get to the floor of the NYSE and things seem to be fine?
For me, I think its a load of garbage that there is an adverse affect on the market (or there appears to be) when it storms. The exchange is indoors people. Come to think of it, the exchange really doesn't physically exist anymore here since its all electronic anyway. It's not like we have things outdoors.
There is a big debate going on about this, so please, post away with your views and opinions. Does weather affect the market? With my tone of the above you should be able to figure out the answer to that for me is a resounding "NO!"
Just google this topic and you'll get a lot of hits.
Leave comments, take a side, and have a great weekend.
Labels: Rain, Singapore Market, weather
Coming down the home stretch of the trading year
It's been quite an interesting year, and as we near the home stretch we wanted to make this blog much more interactive. After all, who wants to hear my diatribes against the market detractors and being right when I said not to panic when the market was down (again)!
The final three months of trading are well underway, and the STI hit a new record today on the first day of the month. Surprised? Well, tell us if you are.
But let's summarize what the market has been up to so far this year:
-February: Major regulatory announcements and reforms were announced in China that sent a shockwave across the trading world. Shanghai Composite dropped more than 10% leading to a worldwide selloff. Singapore was down as well.
-April Flowers Bring May Showers! Things start to look a bit better, market for the most part recovers from the February selloff. In July, the Dow sets a new all time record high at 14,000, as well as a new high on the S&P. Singapore, goes back up.
-Subprime rears its ugly head: Subprime issues emerge in the United States and spread globally as well. Market pulls back in the U.S., and in Singapore.
-October: STI rebounds at a new all time high on the 1st. Wall Street recovers after Bernanke and company cut interest rates 50 basis points.
So that's the year in a nutshell. Tell us what you think will happen for the rest of the year and where you think the STI will be at on the last day of trading for 2007.
Curtis Bergh
The final three months of trading are well underway, and the STI hit a new record today on the first day of the month. Surprised? Well, tell us if you are.
But let's summarize what the market has been up to so far this year:
-February: Major regulatory announcements and reforms were announced in China that sent a shockwave across the trading world. Shanghai Composite dropped more than 10% leading to a worldwide selloff. Singapore was down as well.
-April Flowers Bring May Showers! Things start to look a bit better, market for the most part recovers from the February selloff. In July, the Dow sets a new all time record high at 14,000, as well as a new high on the S&P. Singapore, goes back up.
-Subprime rears its ugly head: Subprime issues emerge in the United States and spread globally as well. Market pulls back in the U.S., and in Singapore.
-October: STI rebounds at a new all time high on the 1st. Wall Street recovers after Bernanke and company cut interest rates 50 basis points.
So that's the year in a nutshell. Tell us what you think will happen for the rest of the year and where you think the STI will be at on the last day of trading for 2007.
Curtis Bergh
Labels: SGX, Singapore Market, STI, Straits Times Index
How the Inter-Korean summit will have an effect on investors
What may be happening on the Korean Peninsula thousands of kilometers away from Singapore believe it or not may actually affect you as an investor here. Geopolitical events have just as much drive in the markets as earnings announcements and financial related information that we digest daily. With so many of the regions market moving in sync with one another, just about any geopolitical event in the Asia Pacific region will have an affect on investors and the market.
The announcement that North Korea and South Korea will hold their second summit since the end of the Korean War more than half a century ago was welcomed by the international community which has made steady progress recently in dealing with the North Korean nuclear issue through the six party talks. The timing of the summit and visit to Pyongyang by South Korean President Roh Moo-hyun coincides with the positive developments made at the six party talks and should keep good vibes and progress on track.
But aside from all the diplomacy for a second, how does it affect investors here in Singapore?
Well it goes beyond just stating the obvious here that Singapore is in Asia. But even more deep than that, major Asian markets are located around the Korean Peninsula that have an affect on how the Singapore market trades (Tokyo, Seoul, etc.) and their major indices tend to move somewhat parallel to the STI from time to time (not an exact science but, making a general statement - it happens a lot). Couple that with the fact that a number of foreign companies from the region - mainly China, the host of the six party talks- are listed here and geopolitical events in northern Asia now take on a bit more significance to us here in Singapore.
While China isn't involved in the Inter-Korean summit, it is a major player in the six-party talks which eventually seek to have a denuclearized Korean Peninsula. Getting to that goal will require six party participants to offer assistance to the North in some way shape and form. So far we have seen energy aid in the form of heavy fuel oil. China is also the North Koreans largest trading partner, and any increase in business and trade between the two could have an impact on companies in China, especially those listed here.
So now, you can see how the dominoes can line up geopolitically speaking in terms of affecting you as an individual investor.
Curtis Bergh
ArchivesThe announcement that North Korea and South Korea will hold their second summit since the end of the Korean War more than half a century ago was welcomed by the international community which has made steady progress recently in dealing with the North Korean nuclear issue through the six party talks. The timing of the summit and visit to Pyongyang by South Korean President Roh Moo-hyun coincides with the positive developments made at the six party talks and should keep good vibes and progress on track.
But aside from all the diplomacy for a second, how does it affect investors here in Singapore?
Well it goes beyond just stating the obvious here that Singapore is in Asia. But even more deep than that, major Asian markets are located around the Korean Peninsula that have an affect on how the Singapore market trades (Tokyo, Seoul, etc.) and their major indices tend to move somewhat parallel to the STI from time to time (not an exact science but, making a general statement - it happens a lot). Couple that with the fact that a number of foreign companies from the region - mainly China, the host of the six party talks- are listed here and geopolitical events in northern Asia now take on a bit more significance to us here in Singapore.
While China isn't involved in the Inter-Korean summit, it is a major player in the six-party talks which eventually seek to have a denuclearized Korean Peninsula. Getting to that goal will require six party participants to offer assistance to the North in some way shape and form. So far we have seen energy aid in the form of heavy fuel oil. China is also the North Koreans largest trading partner, and any increase in business and trade between the two could have an impact on companies in China, especially those listed here.
So now, you can see how the dominoes can line up geopolitically speaking in terms of affecting you as an individual investor.
Curtis Bergh
Labels: Inter-Korean Summit, North Korea, Singapore Market, South Korea
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