As global economies inoculate increasing numbers of their population and loosen Covid-19 restrictions to promote economic activity, many countries have started seeing pockets of economic growth including the United States.
Even so, markets have been responding to the potential reversal of its loose monetary policy, a prediction that was realised after the FOMC meeting on June 15 and 16 which hinted at rate hikes happening before the end of 2023.
Closer to home, markets both here in Singapore and the region continue to throw temper tantrums amid Covid-19 flare ups in many Asian countries that had previously kept the pandemic largely under control.
The benchmark STI is currently up by 10% since the beginning of the year, coming off its peak in April, with sudden dips in between. Individual stocks have seen even greater volatility, sometimes in contrast to what market watchers say about them.
We pick out 5 SGX stocks that have been moving the market in the past month.
iFAST Corp – the Singapore-headquartered wealth management and investment company – has been one of the biggest beneficiaries of the shift towards greater digitalisation accelerated by the Covid-19 pandemic.
Customer account openings increased by 28% over the 12-month period from March 2020, coinciding with the period when Covid-19 cases emerged in Singapore and other Asian territories. AUA (assets under administration) also surged 44% to $14.5 billion over the same period.
Year to date, the company’s share price has more than doubled to $8.28 as of mid-June, following a dramatic 2020 when its share price more than tripled over the full year period.
Analysts note that the company’s successful tender for the eMPF platform project in Hong Kong could boost its bottom line from 2023, while its bid for a digital banking license in Malaysia could be another potential source of growth.
Consensus view: Buy
Price change year to date: up by 150%
Singapore Airlines (SIA)
Singapore’s embattled flag carrier has been getting investor’s attention in recent weeks, as its latest tranche of Mandatory Convertible Bonds started trading on June 25.
The MCBs that SIA issued are a type of zero-coupon bond that gets converted into SIA shares upon maturity in 2030. This was the second time SIA has issued MCBs, and in this rights issue, existing shareholders are entitled to purchase 209 MCBs for every 100 shares of SIA that they own at the price of $1 per MCB.
Market watchers argued that whiled the MCB right issue has helped to shore up SIA’s cash reserves to ride out the pandemic and the prolonged travel restrictions, the exercise could prove to be extremely dilutive for minority shareholders if SIA is unable to redeem the MCBs before maturity.
Consensus view: Mixed
Price change year to date: Up by 18.5%
Singapore banks were in limelight during the recent reporting season, as bank earnings rode on the back of a strong economic recovery both locally and globally. OCBC had a particularly good quarter, with record earnings of $1.5 billion. This was in stark contrast to its earnings of $698 million in the previous corresponding quarter.
Much of its earnings came from higher trading income, fees and commissions, and its insurance business, Great Eastern Holdings.
While loan growth was flat for the bank, market watchers appear confident that demand for consumer loans and business loans will eventually recover as interest rates remain low.
Consensus view: Buy
Price change year to date: Up by 19.3%
Singapore Press Holdings
2021 is the year that SPH became the subject of news headlines, instead of simply being a company in the business of reporting news.
This was particularly poignant with its announcement in early May that the company would be transferring its media business into a not-for-profit entity, SPH Media, funded by both public and private sources.
While many lamented over the possible loss of editorial independence for the newspapers and media owned by SPH, market watchers and investors welcomed the change. The disposal of the loss making media business meant that the company could focus more on its profitable real estate business, which includes a property portfolio estimated to be worth $6.7 billion.
Consensus view: Buy
Price change year to date: Up by 58%
SGX has been building up its technological infrastructure in recent years, in a bid to boost its product offering and help to retain its customers. Initiatives currently underway include an integrated FX marketplace, a digital bond issuance and trading platform, as well as risk management solutions for ESG trading.
Market analysts appear confident that these new initiatives could boost the group’s topline numbers moving forward, despite the higher costs that could be incurred in the early years of implementation.
Consensus view: Buy
Price change year to date: Up by 13%
How to trade stocks in a volatile market
The stocks listed above have seen increased trading volumes since the start of the year, and while their prices appear to be on an uptrend, a number of them have already come off their peak in May.
What should you do if your stocks are falling, but you still want to remain invested for their longer term growth potential?
You can consider trading using Share CFDs. Share CFDs allow you to trade the price movements of a stock without having to own the stock. CFDs can also be used in both long selling and short selling, so you can place a short position on a falling stock to take some profit, while maintaining your existing cash shareholdings in that stock for the longer term gain.
Source: Phillip MT5
The Phillip MT5 platform is a popular multi-asset trading platform by MetaQuotes Software. It is integrated with Trading Central indicators, the Autochartist pattern recognition tool, as well as the Trading Central Market Buzz dashboard to help you identify new investment opportunities based on what is buzzing among other investors.
Phillip Futures is currently offering a zero commission promotion for MT5 customers who wish to trade SGX and US Share CFDs, starting from as low as one share CFD. No platform fees or minimum fees are payable either!
(By ZUU online)
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