Singapore stocks: Once bitten, twice shy

[ghchua]

Hi weijian,

I think we cannot just look at TTTI performance and just applied it to everyone out there. To him, performance is everything. We also do not know what kind of risk he is taking, and these cannot be measured only by volatility or performance benchmark with respect to the indexes. Some positions that he took, like shorting, options etc are inherently riskier strategies compared to just pure buy and hold. Also, he is spending much time on the US markets, which is essentially operating in a different time zone as compared to the local market. Do one wish to spend some of your sleeping hours on it? For me personally, the answer is definitely no.

Maybe one should look at other aspects than just returns when spending time doing investments. The non monetary benefits are also important. For example, it keeps the brain active.

[weijian]

Maybe one should look at other aspects than just returns when spending time doing investments. The non monetary benefits are also important. For example, it keeps the brain active.

hi ghchua,

You hit the nail on the brain. I am not encouraging mediocracy here but I believe there are many paths to excellence, although the principles to do so, remains unchanged.

For one, TTTI has categorically stated that keyboard warriors (probably looking at myself) who spends "some" time to do research like read financial/analyst/annual reports or attend AGMs, are probably not doing enough. While my objectives are very different from TTTI, but I have healthy respect because there is much to learn from him.

All business founders surely lost sleep over the decades building up their businesses - whether is it worrying about it or physically working. There were no medical/sick/childcare leave too. So if one is comfortable with a 9-5 timing (and at least 1 off day, preferably a day that coincides with our child's off school day), then one gets "9-5 timing" returns, isn't it? Of course, nothing wrong with that too.

Just like we have to decide between buying a P/E=5 stock with poor quality, OR P/E=25 stock with high quality. We have to choose our poison. This principle is timeless.

[weijian]

In an alternate universe where SGX has listing avenues (non SPAC) that allow non-profitable companies to list on the local Spore bourse, these huge drops would be attributed to CG lapses on the SGX/MAS.

In our current universe where these unprofitable firms didn't list on the SGX (whether primary or secondary or dual listing), it is due to its SGX's unattractiveness and its unattractiveness ultimately attributed to CG lapses on the SGX/MAS.

Singapore ride-hailing firm Ryde’s shares plunge over 80% on New York Stock Exchange

“It appears some large traders might have started building positions around Sep 3, driving up both volume and prices. This likely caught the attention of other investors who jumped in,” said Prof Charoenwong.

“Additionally, the stock has faced heavy sell-offs after the company’s recent secondary listing on the Frankfurt and Stuttgart stock exchanges in June, which may have caused a loss of investor confidence,” he said.

He noted that such price patterns are also “fairly rampant”. For example, Grab also saw volatility following its special purpose acquisition company (Spac) merger. It has fallen some 70 per cent since its Nasdaq listing and has failed to recover so far.

In May, Singapore-based telehealth provider Mobile-health Network Solutions plunged 85 per cent after the stock surged more than 580 per cent in its first weeks of trading in April. The stock has also not recovered.

https://www.businesstimes.com.sg/compani...k-exchange

[weijian]

The SGX chairman (of past and present) has always drawn a million dollar salary. Finally, the current one Chairman Koh has the decency to write his own letter this year. Let's hope it continues. Chairman Koh's letter has asked for some sacred cows to be slayed (below are excerpts from the annual report in italics):

Only when we support our own stock market, can we attract foreign companies to list here. After all, if we do not support our own market, why should we expect others to do so?

Winning and losing are par for the course in every marketplace, whether it is listed shares, over-the-counter derivatives or cryptocurrencies.

But a spirit of caveat emptor must apply across the board, with investors actively owning their investment decisions and outcomes in domestic or foreign shores

Will this plead be worth the million dollars that SGX shareholders pay him annually?

As pillar of Singapore financial ecosystem, SGX needs help to build investor demand: chairman

It was the first time in 14 years that the chairman had issued a separate letter from the chief executive officer in SGX’s annual report.

https://www.businesstimes.com.sg/compani...d-chairman

[ksir]

I just cant help to love this kind of news.
It just shows the high pessimism (or perhaps desperation) of the market participants.
Fishing or hunting in such market is great!
Values are there, not even too hard to dig.
It is also a good place for long term business owners to buyout their companies in cheap (many delisting over the years proved this).

Singapore market is (at least to me) a fertile hunting ground for value investors!
In recent months HK seems to catch up as well haha.
I have hard times choosing which good companies with really reasonable valuation to pick up.
I guess this is another moment of child in a candy store.

👆 Interesting that it was just 3 years ago when extreme pessimism was in abundance and now STI has hit 17 years high! Wow!  😁
The Straits Times Index (STI) was up 0.38 per cent, or 13.78 points, at 3,638.54, which was a 17-year high.

https://www.straitstimes.com/business/co...ear%20high.

But then, some people would say, it's rising tides lifting all boats, yes of course, but it just means that SEA markets were dirt cheap.
Even now, it's not expensive. 
The ponds still have tons of fat fishes although more fishermen (competitors) started joining in. 
Those with local knowledge (the cliché: circle of competence, likely from following the business for years), should still have the advantages.

But sooner or later, when the optimism is extreme, I woudn't mind to let go of this pond!

[weijian]

Hi ksir,

I think it is cold comfort other foreign indexes are hitting ATH, while STI is on its 17-year high. Of course, we can compare with HSI for more comfort.

I agree that there are fishes lying around but since the fishes are generally hiding in "more murky waters", I am not exactly sure whether it is fat or not.

Between "cheap to less cheap" VS "not cheap to expensive", it is still very clear to me which has a higher probability to give happier endings with less nightmares (for the record, it is the latter). But we are definitely all cheerleaders for the "cheap" turning "not cheap"!

[weijian]

The SGX chairman (of past and present) has always drawn a million dollar salary. Finally, the current one Chairman Koh has the decency to write his own letter this year. Let's hope it continues. Chairman Koh's letter has asked for some sacred cows to be slayed (below are excerpts from the annual report in italics):

Only when we support our own stock market, can we attract foreign companies to list here. After all, if we do not support our own market, why should we expect others to do so?

Winning and losing are par for the course in every marketplace, whether it is listed shares, over-the-counter derivatives or cryptocurrencies.

But a spirit of caveat emptor must apply across the board, with investors actively owning their investment decisions and outcomes in domestic or foreign shores

Will this plead be worth the million dollars that SGX shareholders pay him annually?

As pillar of Singapore financial ecosystem, SGX needs help to build investor demand: chairman

It was the first time in 14 years that the chairman had issued a separate letter from the chief executive officer in SGX’s annual report.

https://www.businesstimes.com.sg/compani...d-chairman

Tan Boon Gin, the regulator guy, takes the opportunity to parrot his boss's boss and lobbies for the sacred cows to be slayed. This sort of "intense public lobby" feels relatively rare in the local context and may suggest that resistance is just as strong from other stakeholders. So, who's going to win eventually?

Institutional funds have a role to play in driving governance and performance

The second part is the link between corporate governance and access to capital and how they should complement each other. I believe this has also not been lost on the ACGA. The CG Watch covers not only the performance of regulators such as the Monetary Authority of Singapore (MAS), Accounting and Corporate Regulatory Authority and Singapore Exchange, and gatekeepers such as auditors, but also the contribution of the providers of capital, shareholders and investors.

https://www.businesstimes.com.sg/opinion...erformance

[dreamybear]

Different markets different approaches

----------------

US CEOs fired more quickly over low stock prices this year, report says
https://www.businesstimes.com.sg/compani...eport-says

https://sias.org.sg/latest-updates/comme...ck-market/
"Sias’ hope that is that the fourth question will target mainly companies whose shares trade below book values and will focus on steps managements and boards are planning to take to address this undervaluation."

[weijian]

https://sias.org.sg/latest-updates/comme...ck-market/
"Sias’ hope that is that the fourth question will target mainly companies whose shares trade below book values and will focus on steps managements and boards are planning to take to address this undervaluation."

hi dreamybear,

Book value is derived based on accounting treatment and so it will vary between different sort of standards. Local companies here use IFRS and US companies use GAAP, therefore the comparison done by SIAS (in italics below) is not apple-to-apple:

The Singapore market performed admirably in the decade or so after Singtel went public but after the Straits Times Index reached an all-time high of around 3,907 in 2007, it has since floundered. Today, it is estimated that of the 600-plus listed companies, less than a third trade above their book values, while, in comparison, more than 90 per cent of the S&P 500 trades above 1 time price/book value (P/BV).

PPE and Investment Properties are recorded at historic cost +/- depreciation/impairment for GAAP. As for IFRS, I have seen that companies have used a wide variation of valuation for their PPE and Investment Properties. In general, most companies on IFRS uses cost on PPE and fair value on Investment Properties. But there are exceptions - For example, Oxley uses "fair value" on their PPE (hotels at Stevens) and SingFinance/Isetan uses cost on their Investment Properties.

Looking at the variations, I will not be surprised that IF ever this "4th question" is implemented, companies will handle it by adjusting their accounting treatment instead.  What we hope to see, may not be what we get.

[dreamybear]

When the 10-person group chaired by a minister was formed, it was disappointing to see only 1 private sector representative. Now, 2 separate groups have been announced and the team list announced - we see the line-up is heavily stocked with folks from the private sector. These guys have skin-in-the-game and so I would think it is much better.

Even David Gerald, SIAS founder is part of the team. The NUS academia representative is unfortunately not Prof Mak. I was actually looking for his name but another came up.

Equities Market Review Group Convenes Inaugural Meeting, Identifies Priority Areas, and Announces Members of Workstreams

Singapore, 27 August 2024… The Equities Market Review Group held its inaugural meeting on 19 August, chaired by Mr Chee Hong Tat, Minister for Transport, Second Minister for Finance and Deputy Chairman of the Monetary Authority of Singapore. The meeting discussed key challenges and opportunities facing Singapore’s equities market, and set out its strategic direction for the review.

2 At the meeting, the Review Group identified the following priority areas for the two workstreams:

a. The Enterprise and Markets workstream will focus on ideas to encourage listings, increase investor participation, improve trading liquidity and facilitate fair valuation for listed equities.

b. The Regulatory workstream will study ideas to streamline the regulatory framework, improve the listing process, enhance the effectiveness of our disclosure-based regime, and strengthen corporate governance standards, investor access and recourse.

https://www.mas.gov.sg/news/media-releas...al-meeting

Some of the points could have been discussed here, but kudos to the author who came up with such a comprehensive set of wish list covering various aspects.

https://lonewolfinvestor.blogspot.com/20...t-for.html