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Under the cloud, one finds silver linings

Chew Sutat
Chew Sutat • 8 min read
Under the cloud, one finds silver linings
Global markets and economies are cloudy but there are silver linings, even for Singapore / Photo: Samuel Isaac Chua
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The winds of change arrived in October in Singapore’s favour. Changing weather patterns that shifted north kept transboundary haze largely away from the city-state but blanketed the Klang Valley instead, adding to the shades of corruption allegations against Umno.

Nonetheless, some vestiges of the haze remain, no thanks to the hotspots down south in Indonesia, causing my eyes to tear and my nose to run as the PSI started rising.

Elsewhere, clouds too have started to circle. The “once in a 100 years” rain that flooded the MTR in Hong Kong found its way to New York, prompting Facebook to create the temporary “I am safe” mark for friends to share in those two cities. Meanwhile, pictures of similarly flooded subways and Central Park becoming a lake came through our newsfeeds as US Congress at the 11th hour passed a stopgap to prevent the US government from shutting down for the fourth time in 10 years.

Having pushed forward the compromise bill with the help of Democrats, House Speaker Kevin McCarthy was forced out by his far right holdouts of his own party in an unprecedented move, having held this role for less than a year.

In the meantime, written into the temporary bill was a demand that the US stops funding Ukraine. With Donald Trump cheering on the Republican far right from the sidelines, it is hard to ignore the conspiracy theories about how he is good friends with Putin, like how President Biden’s son Hunter is said to be involved in some shady business dealings with Ukraine years back.

Meanwhile in North Asia, data out just before the October Golden Week was anything but promising. In the July to September quarter, net selling by foreign investors through the Shanghai and Shenzhen Stock Connect with Hong Kong hit RMB80.1 billion ($15.2 billion), a nine-year high since the trading link was started in 2014.

See also: Should we stop aiming for economic growth?

There was also news that Hui Ka Yan, who founded property giant Evergrande in 1996, was under investigation on suspicion of a whole host of crimes. This long-running saga is perhaps in its final catharsis. However, it is cold comfort for the buyers of uncompleted homes unless there is some sort of a state-supported bailout as part of the eventual resolution.


Is doomsday looming for equities because Black October is here? Last week’s Chew On This highlighted that this is not a worry statistically. Where then are the silver linings?

See also: From stability to agility: nine implications for a new investment landscape

Starting in China, the extended Golden Week, which kicked off in the middle of the Asian Games in Hangzhou, continued to lift all stocks linked to tourism, both domestic and international with businesses like CTrip, the owner of, gaining a nice acceleration on top of the end of the European summer.

Likewise, expect businesses like Singaporelisted Straco Corp, the operator of tourist attractions in China, to have an outstanding 3Q and 2H if reports of a recovery in domestic tourism are true.

More surprisingly, after a dismal 3Q encapsulated by Biden’s “China is an economic time bomb” comments, our thesis of a bottoming out following inventory destocking in Western consumer markets appears to be showing up in the data. This is not the result of some new Apple products which may help stocks like Nanofilm Technologies International MZH -

find a bottom. The cynic in me can’t help but expect the businesses and stock prices to improve once all the analysts have turned their buy calls into sell calls.

More broadly, for the first time in six months, China’s factory activity output and retail sales grew at a faster pace than in August while the decline in exports and imports narrowed. Have they moved past the heavy expectations of a straight line post-Covid rebound (which was never going to happen anyway) and are gradually finding their common prosperity footing?

There is an even chance that following the Golden Week as well as the various political conferences, markets find a bottom amid a time of maximum negativity, albeit temporary. After all, this was what happened last year.

If equity markets stay stable in Black October, that might be the start of a rally underpinned by the green shoots of stability and economic rebound until the Lunar New Year in February. The question to ask for this rally will then be how much rather than if.

Meanwhile, over in the US, for every week that a potential shutdown persists, there could be losses of 0.1 to 0.2 percentage points in quarterly economic growth, estimates Jared Bernstein, chairman of the White House Council of Economic Advisers. Given that a whole lot of Federal employees will continue to draw their pay from Oct 1, will this give data-driven Fed policymakers more pause for thought in their higher-for-longer guidance and act as another brake on inflation numbers which have moderated in recent months?

Sink your teeth into in-depth insights from our contributors, and dive into financial and economic trends

New IPOs stirring

With a 45-day reprieve until mid-November, investment bankers have lots to cheer about as we had postulated in early September because that is precisely the IPO window to clear new issues.

Even in IPO-starved Singapore, the Catalist Board is reawakening. On Sept 28, Evolve Capital lodged the draft prospectus of Sheffield Green, a business that provides manpower for the engineering industries, especially in the wind, solar and green hydrogen segments. In post-pandemic Singapore starved of workers in various industries, Sheffield Green looks promising even as our population statistics released in the last week of September showed a net increase in all manner of passes to augment gaps in our labour market. Ideally, if this pivot to sustainable green energy is adopted rapidly across the region, we may we even have less haze hanging over our beautiful skyline over time.

On the same day, PrimePartners Corporate Finance lodged the preliminary prospectus of art outsourcing company WinKing Studios. One of the largest game art sourcing studios in Asia and operating in China and Taiwan where growth and demand are high, WinKing Studios creates art and graphics for computer games and also develops its own games.

Just two days earlier, on Sept 26, PPCF helped manage TSH Resources’ secondary listing on the SGX. The Malaysia-based palm oil company, which trades at just four times earnings on Bursa, has broadened its businesses into renewables by tapping its assets in Indonesia. Will its signal for expansion via Singapore help lift it to the right multiple over time?

Not to be outdone, SAC Capital on Sept 29 lodged the draft prospectus of Niks Professional, which operates three clinics in Orchard, Jurong East and Tampines, specialising in dermatology and aesthetic medical services. The company also distributes Niks skincare products to 13 provinces in China through regional agents.

With UV rays getting stronger, which may increase the need for skincare, Niks could also be a proxy of rising consumer spending in Asia, where how you look is becoming more important, no matter how good the filters of your mobile app are. If it gets its distribution model right and plays by the rules, could this be another Best World in the making? Only time will tell but Niks will join the company of medical services and healthcare-related companies from hospitals and specialist clinics to Haw Par’s Tiger Balm on the Singapore Exchange S68 -


To cap it all off, the long-awaited business combination of the SGX-listed spacs are finally starting to happen — nearly two years after their listing with great fanfare. On Oct 2, Vertex Technology Acquisition Corp announced its despac to form an enlarged entity worth $1.16 billion.

True to form, the despac target is a new digital economy company, live-streaming platform 17LIVE, so hip that it hurts when seen in contrast to the old economy stocks that are the market mainstay.

While this is happening against the backdrop of a few small Singapore companies braving the large oceans of Nasdaq and NYSE — attracted by this year’s record ARM deal, chances are they will be forgotten soon after the fundraising. In the context of the US markets, they are but a small fry from far-flung geographies. Likewise, although we may lament Alibaba’s Cainiao filed for its listing in Hong Kong instead of Singapore, why would a logistics business in China find a home here? It is after all systemically important on the mainland and “better supervised” over there.

However, should the market clear up, the $1 billion mainboard IPO of Advanced Medtech led by Goldman Sachs and Morgan Stanley could also find a strong home here soon. One swallow may not make a summer but a string of smaller but promising companies and secondary listings on the mainboard could generate interest as the market enters 4Q.

Shouldn’t Singaporeans give the IPOs our full support — just like how we cheered on sprinter Shanti Pereira who went on to win the 200m gold after missing out on the 100m gold. Be it gold or silver, they are still worth celebrating as it portends more to come in Nagoya in 2026. Ganbatte!

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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