Joey was interviewed by Michelle Martin on 938 Live after the trading session ended on 13 February 2015. Do check out his Views on the market and what sectors or stocks you should be focusing on right now. The full transcript of the interview can be seen below too.
Singapore market opened slightly stronger today up about 5 points on the back of U.S. stocks ending sharply higher with DOW up 110 points last night due to a ceasefire agreement between Russia and Ukraine.
However it was not able to keep the gains and spent most of the morning trading session down about 2 to 6 points. The 2ND half of the day was slightly better with STI mostly in positive territory supported by commodities play like Noble group which closed up by about 5% and finally we have STI closing up 7 points at the closing bell.
For the entire week, we have indeed seen some volatility in the market mainly due to news coming from Europe. We have Greece anti austerity government meeting with Eurozone finance ministers over the past Wednesday to discuss on an extension of an international bailout to Greece, however no conclusion was made then. So there is a possibility that the parties can’t come to terms before the current bailout program expires at the end of this month. If that happens, Greece would quickly default and we may have a Greek exit from the euro zone, which would be a negative for the equity markets.
Therefore, markets continue to be very uncertain on investor worries over the outcome of Greece’s debt crisis. There will be another Euro group meeting this coming Monday that is largely viewed as a last chance to seal the deal. I think it’s going to be down to watching the headlines from the Euro group for the next week.
The oil and gas sector in Singapore has also seen some volatility due to Oil prices trading up and down.
Oil prices fell as much as 3 percent on Wednesday, with Brent crude hitting a session low of $53.91 USD, after government data showed U.S. commercial crude oil stockpiles rose which stoke concerns of oversupply. After 2 days of losses, yesterday we have seen oil prices rallying again to about 57 USD FOR Brent crude on news of deeper industry spending cuts and a sinking U.S. dollar.
So for a recap, oil prices had actually come down about 50% since June to a low of about 45 USD and had rallied by more than 20 percent in the last four weeks.
So for today, we have seen Oil and gas stocks like Keppel Corp, Semb Marine, Ezion and Ezra rebounding in line with oil prices rallying last night.
So those with oil and gas holdings or looking to go into such plays would have to take note of oil prices in general.
One can look at Singtel for potential capital upside and also dividend yield at above 4%. It’s 3rd quarter results was announced the day before beating expectations with net profit up by 11% year on year to $969m. This was also above consensus estimates by 7.7%. This was mainly due to strong contribution across its regional mobile associates in Australia, India and Indonesia.
So, fundamentally, SingTel’s valuation looks attractive with it trading at about 17.6x versus the 19x P/E for the regional market and about 20 x PE for Singapore peers like M1 and Starhub.
Technically, Singtel has been trending higher since breaking above the key psychological resistance at 4 dollars at the end of January and today we have seen it hit a new high at 4.22 on Top 5 volume and eventually closing at 4.20. So, if it were to consolidate above 4.20 in the coming days, there can still be more upside to 4.30 in the short to mid term. On a side note, Phillip Securities also has an Accumulate call with target price of 4.42 for Singtel.