Joey was interviewed on 938 Live after the trading session ended on Friday, 18 December 2015. Do check out his quick views on the market as we head into 2016 and just after a rate hike in almost a decade. Are there still stock trading Opportunities? More downside ahead? Which Sector should you still be wary off?
The full transcript of the interview can be seen below too.
Joey, Singapore Stocks closed lower tracking regional markets, what’s been happening today?
Singapore market opened down 28 points today taking the cue from Wall Street with DOW Jones closing down 253 points as investors come to terms with the prospects of higher U.S. borrowing costs accompanying the rate hike.
We have seen Oil and gas counters like Keppel Corp and Semb Marine tanked by more than 1.5% in the morning dragging the index lower on the back of crude oil prices breaking below USD 35. There were also selling pressure seen in some of the oil and gas peers like Ezion and Ezra.
So STI was negative throughout the day but recovered at the later part of the day with some bargain hunting on blue chips and with local banks recovering from day lows and finally STI closed down just 8 points for the day at 2853.
What’s your view on the stock market Joey as we go into 2016?
Well, this week’s focus has mainly been about Federal Reserve hiking rates. And indeed, just 2 nights ago, there was a unanimous decision to raise the Fed Funds rate by 0.25% for the first time in almost a decade.
I think that markets worldwide have reacted positively to this rate hike given that the FED has talked about this since May 2013, and has in fact given ample hints. Janet Yellen has also used the word “gradual” about a dozen times during her speech to describe the pace of future rate increases which kind of assured the markets. So this move gives some sort of a closure and a sign of confidence about the economy with Dow Jones surging 224 points 2 nights ago.
Back at home, the STI has rebounded from its low of 2800 points at the beginning of the week in line with other markets. However, a stronger US dollar due to the rate hike coupled with over supply worries, has pushed crude oil prices down further to multi year lows. Therefore, we may still continue to see weakness in oil and gas counters going forward which may be a negative on sentiment.
Overall, I think that the Singapore market might start to experience some resistance again as it approaches the 2900 level with it struggling to stay above over the past 3 weeks. Support would be at around the 2800 for now.
Could you share any stocks or Sectors that you are recommending to investors for next year?
One can consider Raffles Medical as we head into 2016. Raffles Medical has been expanding its capacity locally with it opening a 17000 sq ft medical center in Shaw Centre a few months back. It has also diversified globally with a new medical centre in Japan, as well as the acquisition of a firm which operates 10 clinics in China, Vietnam and Cambodia. Fundamentally, its valuations also look attractive compared with its peers.
Technically, Raffles Medical has been supported above the 4.10 level since May this year with it trading to a high of near 5.00 in July before retracing back down. So baring any negative news flow, those looking to accumulate for the longer term can consider entry near the 4.10 support level for any rebound back up to the 4.40 level first.