On Jan 11, the FTSE STI Index took out the thrice-shy 3,240 points attempted last year. At the end of last week — against the odds and market belief (unless you were long on this column’s calls) — the index held above that level, with a gain of 4.7% year to date to 3,282 points on Jan 14. Indeed, since this column started last September, some readers have described the cautious and increasing optimism shown on the local market as “hope and fantasy”!
Pundits who have been unconvinced of Singapore are starting to buy the story of what I described as a “rotation to reality”. The three banking heavyweights, which make up nearly 44% of the index, are gaining (and pushing up the STI) in anticipation of higher profitability from rising net interest margins as interest rates gradually normalise. Meanwhile, the “platform with no profits yet” correction continues to play out. Grab Holdings, at just above US$6 ($8), is trading at almost half its Nasdaq debut price, while Sea, listed on the New York Stock Exchange, is at a one-year low with its US$175 close on Jan 14. The market is always right.
Perhaps these were a belated catch down to the travails that have sunk Cathy Wood’s Ark Innovation ETF, or the death by almost thousand cuts from the “Common Prosperity” policies inflicted on Chinese tech stocks as represented by the Hang Seng Tech Index — which has survived its early January “Tencent wobble” to stage an impressive “ten percent” rally from its all-time low on Jan 5.
