Joey was interviewed on 938 Live after the trading session ended on Friday, 13 January 2017.
The STI rallied strongly on Friday, being in positive territory for most part of the day and even closing at day high despite US markets weakness the night before. What’s are the key reasons for the rally?
More importantly, check out Joey’s view on the Singapore market as we head into the near year 2017. What are some of the levels we should keep an eye on for the STI? What about certain sectors or stocks to re-position ourselves in 2017?
The full transcript of the interview can be seen below too.
Joey, what pushed the STI higher by more than one per cent on Friday?
Singapore market opened up 8 points today bucking Wall Street’s sell down with DOW Jones closing down 63 points. The sell down in the US markets was largely due to worries that President-elect Donald Trump didn’t sufficiently outline his fiscal and economic agenda.
Back at home, instead, we saw the STI rallied upwards strongly after opening led by property counters like City Development which rallied closed to 2% after some positive research coverage.
The telcos were also in play today with Starhub up closed to 3% on the back of news that a MOU was signed with M1 to study potential further collaboration in mobile infrastructure sharing.
So STI was pretty strong throughout the day with occasional profit taking and finally we saw STI closing up 32 points at the day high of 3025.
Let’s talk a little bit about your view on the Singapore market this year, with the US markets hitting new highs, what do you think?
Well, we have indeed seen Dow Jones rallying by more than 10% since early Nov last year after Donald Trump won the presidential election. This was driven by his campaign promises of lower taxes and fiscal stimulus which was a catalyst for the markets.
However, back at home, the STI did not really follow in line and we even saw a sell down in December last month. Nevertheless, I would say there is less uncertainty now compared to a few months back where the markets were dealing with news on interest rate hike and US election results.
As we began the New Year, we did see the Singapore market strengthening over the past 2 weeks rebounding by more than 100 points led by banks, commodities and some of the property heavy weights like Capitaland.
Personally, I would like to see the STI maintain above the 3000 level where it can suggest a bullish year ahead with a short term target at 3100. So far, over the past few days, we are still seeing this level holding well which is a good sign.
Let’s talk about some of the sectors or stocks that investors can reposition themselves in the new year?
One can look at the oil and gas sector for some bargain hunting after most counters have been beaten down over the past 2 years with crude oil prices hitting a low of US$28 in Feb last year.
Brent crude oil prices has been supported pretty well above the US$50 since December, boosting sentiments which has also led to strength in some of the oil and gas counters.
From sources, exploration and production (E&P) global expenditure will total US$450b in 2017, up 3% compared to 2016 after two years of steep declines. Therefore, we may start to see some light in 2017 for this depressed sector with the negatives largely priced in.
One can consider stocks like Ezion, Mermaid Maritime, Sembcorp Marine that have rebounded from their lows over the past few months and there can be more upside with oil prices pushing past the US$55.