Joey was interviewed on 938 Live after the trading session ended on Wednesday, 17 June 2015. Do check out his Views on the market and what stocks you should be watching right now. How will the MERS crisis affect the Singapore market? The full transcript of the interview can be seen below too.
Singapore market opened higher, up 20 points on the back of a stronger US showing last night with Dow jones closing up by 113 points. The strength was mainly due to investors awaiting the Federal Reserve’s latest take on the U.S. economy and interest rates which many expect to be positive and also a welcome diversion to the Greece debt crisis.
STI pushed higher in the afternoon with blue chips like Singtel and SGX also rebounding in line with the market and supporting the index and eventually we have STI closing up 28 points at 3325.
STI will continue to be volatile on the back of news that Greece and its creditors were still unable to reach a resolution over the weekend. Closer to home, there is also the possibility of the MERS crisis spreading from Korea to Singapore. If this happens, we may see more downside to the STI as this can affect market sentiment on the whole like we have seen during the SARS crisis in 2003.
Currently we are seeing some support for STI around 3290 – 3295 level and today we have seen it rebound from there with resistance capped at 3360 for now.
If MERS were to hit Singapore, we can expect hospitality and travel counters like SIA and Tiger Air to bear the brunt. Tourism would be affected which can affect gaming counters like Genting Singapore, Genting Hong Kong and also some of the hospitality Reits.
However, it is also good to note that the badly affected stocks in travel, consumer and hospitality sectors did rebound significantly post-SARS once the situation was under control. So the MERS crisis may also present some opportunities for investors to accumulate on dips.
Looking back at SARS, those who like to take shelter or maybe even profit from the Crisis can consider healthcare related stocks like HMI, Raffles Medical and Medtecs that proved to be defensive then.