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The (market) gods must be crazy, but we can still stay sane

Chew Sutat
Chew Sutat • 9 min read
The (market) gods must be crazy, but we can still stay sane
The financial markets may be going crazy, but in the quiet of the night at Chad’s Zakouma National Park, Chew can still stay sane / Photo: Chew Sutat
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Some of us may remember the 1980 South African film, The gods must be crazy, where a Namibian hunter-gatherer chanced upon a bottle of Coca-Cola dropped from an airplane. He believed it to be from the gods, and set about trying to return it. It has been more than 40 years since, and I have just returned from my third trip to Africa in six months. The first was when I took Sharity, Community Chest’s elephant mascot, up Mount Kilimanjaro in Tanzania, followed by a grand tour of Cairo and the Great Pyramid of Giza in December.

Relative to my latest trip, those two were but at the periphery. This time, I ventured into Chad, the heart of the Dark Continent. There was no direct flight from Changi. Rather, the outbound of this week-long trip took me first to Bangkok; next to Addis Ababa of Ethiopia; then to Doula, Cameroon; and finally to N’Djamena, Chad’s capital city.

Aside from the gods, many friends and my wife certainly thought I was crazy.

Chad covers a land area of 1.3 million sq km — making it the 20th largest country in the world. Yet, it is completely landlocked: with Libya to the north, Sudan in the east, Central African Republic in the south, Cameroon and Nigeria in the southwest, and Niger in the west. Its GDP per capita, for its population of 17 million, is just US$743 ($999), or 179th in the world, according to the International Monetary Fund. In contrast, Singapore, a tiny island with a mere land mass of 733 sq km, was able to report a corresponding number of US$79,426 per capita — the second highest in Asia, after Qatar’s US$82,887. The S in ESG is really about survival.

Yet, Singapore and Chad share some similarities: both countries are multi-ethnic and multi-religious, and both are former colonies. While Chad was granted its independence by the French in 1960, the former colonial masters continued to meddle in its affairs, including supporting the military junta as part of a West African coalition in its fight against Boko Haram, which had its last president killed in 2021 by rebels from Northern Chad.

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Nature dominates within the Zakouma National Park / Photo: Chew Sutat

On the other hand, Singapore was de-colonised by the British in 1959 and gained full independence in 1965. Following the end of the Konfrontasi in the late 1960s, the city-state has been a relative beacon of calm and order within a complex Southeast Asia. Good governance counts in countries as well as companies.

I was privileged to spend a week in Zakouma National Park, where conservationists and rangers managed to stem a red tide where more than 4,000 elephants were killed by poachers for ivory in the early 2000s. The remaining 400 were so traumatised that for years after African Parks took over in 2010, the females refused to breed, huddling instead in one massive herd, ironically creating an amazing spectacle if one were able to spot the group that was hiding from the two-legged predator called man.

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The sacrifice of the heroic rangers, many of whom gave their lives on the job as they fought the poachers, has not been in vain. The last time an elephant was killed by poachers was in 2015. Since then, the herd has grown to more than 700 and has even splintered into a few smaller groups as the largest land mammals began to regain more normal lives. Sadly, the gene pool has been altered. Calves born in recent years generally have shorter tusks. That is nature’s way of signalling the key to survival: the ones with the large long ones — reaching as low as the ground — were the first to be targeted.

One of the rangers who helped fight off the poachers / Photo: Chew Sutat

In Chad, I was reminded of another catastrophe. Lake Chad, which used to be one of Africa’s largest lakes, lost 95% of its size in 25 years to 279 sq km, leaving less water for the 30 million people living in the four countries surrounding this water body. We think about climate issues like potential rising sea levels in 100 years and are preparing for that in Singapore. In Chad, both the E and S in ESG are about subsistence, and its 45°C midday temperature in the dry season in the pan wetlands in Zakouma which I experienced is a testament to that.

Digital detox

This trip was a real test. Many, including myself, thought I could survive the “wild” amenities by the “bucket”, or the lions and insects, but I would struggle with the lack of connectivity to the rest of the world. Indeed, it was a real test because with no 3G, not to say WiFi, in the bush, I had no idea if the US Federal Reserve would steepen its rate outlook. I did not know if the Americans were agitating before China holds its 14th National People’s Congress. I didn’t know if the Ukrainians were still stoutly defending Bakhmut, and of course, how the corporate earnings season had panned out. I not only survived but rather enjoyed it, even if it took a few days to get used to the idea that I could not refresh my Singapore Exchange app for stock prices, much less call my wife.

Indeed, when finally leaving N’Djamena to Addis Ababa — where there is WiFi in the airport — I was filled with trepidation about turning it back on. The good news was that I spent the better part of an hour or two downloading over 2,000 WhatsApp and other chat messages, and just under 1,000 emails — I could not do anything else with my devices. And to think I thought I had retired. The bad news was once those came through, I became a bad travel companion, as I was stuck to my phone and iPad for the remainder of the return journey. Fortunately, the great team at Singapore Airlines got me on to an earlier flight and shortened my second transit by half and allowed me a couple more hours of peace before I reached home. In addition, I learnt that my football team, Manchester United, won their first piece of silverware in the league cup, beating Barcelona in the Europa Cup, and got through to the next round for the FA Cup. The other news by then was incidental!

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Back to reality

To my “surprise”, in the two weeks that I was off the grid, the world did not end. Markets as postulated here in this column corrected through the second half of February. The fluffy bounce in the West saw mid-single-digit pullbacks in the S&P500 and Nasdaq, as investors slowly got used to the idea that the Fed may stay tighter for longer.

China and Hong Kong continued to ease in the lead-up to the “two sessions” that began on March 4. The modest 5% GDP growth target announced on March 5 should not come as a surprise to China-watchers who understand the “Common Prosperity” mantra of President Xi Jinping, where stability is paramount over economic growth per se. It did validate the pullback from an overextended November rally in North Asian markets that overshot economic reality. In the case of Hong Kong, this was covered in Chew On This (Issue 1075, Feb 27) on “The Grandmaster”.

US-dollar bears too got momentarily sideswiped as the negative carry forex trades — bets against the US dollar — got more expensive to run, and the greenback (as I have argued) momentarily steadied for a quarter or two. The Straits Times Index similarly saw its gains in late January and early February of around 5% to some 3,400 points whittle back to par for 2023, as some might have taken profit as suggested in Chew On This (Issue 1072, Feb 6) on “Kung Fu Hustle”. Meanwhile, my shift to lower-beta, non-growth plays, as described in Chew On This (Issue 1074, Feb 20) on “oldies but goodies”, seemed to have paid off for my two-week retreat.

Several high-yield, deep-discount, potential corporate and M&A plays, including Fraser Properties, BRC Asia and The Straits Trading Co, did pretty much nothing — in other words, they did relatively well. Keppel Corp (adjusted for Sembcorp Marine distribution) traded up, Sembcorp Industries still stayed well above the fray in its energy transition drive, and Olam Group had a decent pop-up. Those who took profit on blue chips in the run-up too early — including the banks — were able to re-enter the trades 5%–10% below, which have since rebounded post decent corporate results into early March. I even managed to buy back the old chestnut Straits Times Index ETF in my CPF account 5% below its ex-dividend high with a good-till cancelled order with a broker.


With these three African trips in the last six months, I am slowly beginning to understand the value of disconnecting periodically and having a portfolio based on principles and carry, without having to stay up all night wondering what the S&P moves are. This is so even with the odd rotation and hustle required to be successful in 2023. True for those looking for kicks, the “bigger” and more “liquid” markets of Nasdaq and Hong Kong with high-octane ups and downs, as well as more tradable ranges, are good for some, but the consequences of getting it wrong can be very painful as well. While I am mildly optimistic about a tradable bounce generally into April for equity markets that may ease off in May, perhaps there is one more potential area to look at for those who “need” to do something and are patient.

All three spacs that were listed in Singapore over a year ago — Vertex Technology Acquisition Corp, Novo Tellus Alpha Acquisition and Pegasus Asia — have not yet announced any combination. They are generally trading 10%- plus from their respective issue prices. Assuming that the sponsors now have a field of choices at more realistic 2023 valuations to merge into promising growth companies, than say having to do it in 2021 (where deals done are now generally acknowledged as fluffy bull-market mistakes), then whatever the proposal that is put out, one is better off than the original spac holders. If nothing materialises, then the monies (held in escrow) minus some nominal costs will be returned in a year or so. That’s potentially the returns equal to 2.5x that of the T-bills still in vogue.

The world we live in will still be as uncertain, with inflation, geopolitics and war dominating the headlines, but consider ourselves lucky in the safe haven of Singapore. At least, we have options and can still make sane choices.

Chew Sutat retired from Singapore Exchange after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange and he was awarded FOW’s lifetime achievement award. He serves as chairman of the Community Chest Singapore

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