Week-on-week, the Straits Times Index actually rose four points to end at 3,084, on Sept 3, despite a rollercoaster week, which saw loss-making Sea making an appearance on the MSCI Singapore Index. This caused a rebalancing, with the banks having to fall to make room for Sea.
To date, the STI remains above its 200-day moving average at 3,054, but only just after touching a low of 3,055 on Aug 31. Unfortunately, ADX is rising, the DIs remain negatively placed, causing some volatility. But the rebalancing is likely to be done and dusted, unless Sea rises sharply. The Nasdaq-listed local gaming and ecommerce company’s share price is up almost 73% this year.
However, as Sea launches its digital bank, and gets regulated by the Monetary Authority of Singapore, it may start to trade at valuations similar to DBS Group Holdings, except that DBS is immensely profitable, and Sea is not.