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Contrarian report calls for a sell on S'pore stock

Hi Lausk22,

I agree with what you say and i hope that investors don't start to believe in the contrian story that the Singapore Market is overvalued and urge investors to get out and buy the Taiwan Market.

I truly believe in self belief. Even with all the rumuors, tips or news that we have heard, i truly believe that if one thinks he has made the right decison after much analysis and research, it will be a right purchase or sale. We should not let any news affect our investment decisions but just based it as a comparison to our own judgement..

Tks

Kenneth 

 

The analyst may have called a sell on Singaopore shares. But as reported in today papers, some of the Singapore oil related companies have won contract after contract and their stock price is going to head higher and higher.....

 

contrian analyst are those who believes and trade in opposite direction of the market, when people arebuying they start to sell. there is a whole theory on this type of investor, too much to type. I read it in CFA level 1 books. they are just one of the many type of analyst described. A technical analyst and a FA might said a different things.

 

From the yin-yang master, who said:

Do not believe in anything simply because you have heard it. Do not believe in traditions because they have been handed down for many generations. Do not believe anything because it is spoken and rumored by many. Do not believe in anything because it is written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and the benefit of one and all, then accept it and live up to it.

 

sorry ozone...

my post is for Lausk222... :) 

 

Market parlance is different from everyday parlance...

The stock market is often a bizarre place...

No matter how smart and voluminously knowledgeable one makes oneself out to be...

it's very often no use in the bizarre world of the stock market....  

 

Everything you read should be taken with a pinch of salt..

I live by a saying that I read in a book by one of the great investors : " Fear when there's greed ; Be greedy when there's fear"

Have lived by it and made some. Sell when pple are greedy and buy when pple fear..

hope this can be sound advice to SJ forumers..:)

 

iPunter, how to take holidays when one has lost a lot of $$$. It should be for those who made a lot:)

 

Reports can be manipulative or 'an edge for those brokers'. The housing and interest rate jitters and what have you. :)

Big picture! .. big picture!

 

If one has already lost a lot of $$$...


then it should be timely to "go for a holiday*" now...  


 

*get away from the market 

 

The stock market survives on investor sentiment...

...not just pep talks or gloom talks...

This report  is definitely going to seep deep into the hearts of investors' sentiments...

which is bad for the market in the present and the days and weeks ahead...

 

All need to make monies, be it Financial Houses which make prediction, Newspaper Cos. which need to sell newspapers and reporters who need to earn a living must write something. Don't believe most of what you read especially from newspapers because they will soon be recycled as toilet papers:)

In last Saturday BT, 5 gurus predict doomdays soon for equity and bond markets and it will come like tsunami. If their predictions become true, then we are doomed. Believe it or not ? 

 

There are two sides to a coin, similiarly there will be people who are bullish and people who are bearish at this time.  Take a step back and and appreciate the FEAR and GREED that is displayed.

I noticed that whenever I have stepped into the macro side of the trade - looking at the price level itself, I start to become unsure if my positions are sound.  I will then take 'SOME' steps back and look at the big picture - the global economy and then focus on the regions, then the sector itself to get a new perspective on my positions.

 

ruanlai: but the truth is tat for those penny stock with negative financials, they are driven up so high based on rumors that some RTO is going to take place. for such category stock dun u tink the share price is too high? there isn't any logical conclusion to derive but only pure speculation on the RTO to take off so they can earn a pile once the formal announcement is lodged at SGX

 

agree with livermore. For all you know, they said that so that they can get in cheaply. Another foreign bank (can't remember which one) said last week that Singapore presents the best opportunity among Asian bourses. It's high but it can go higher, that bank said.

btw 2.6 P/BV of Singapore and 2.2 P/BV of Taiwan, I'd still choose Singapore for it's political stability and certainly one have to pay a premium for it. Taiwan bourse is one of the worse performing bourse in Asia so far this year. The ruling party there spares no effort to do anything to gain political capital and not doing much to its economy. It is constantly stirring shit in the cross straits relationships with the hope of agitating China. Will you buy into a country that has loads of missiles aiming at it? Remember too that USA is increasing becoming impatient. It has warned Taiwan last week to stop all the nonsense in its effort to be a UN member.

 

Of course, this is a risk reward thingie. High risk, high reward... that is if it doesn't go in the wrong way

 

When times are good, the BBs have no opportunity to buy at lower price.........

Then say bad about the market, caused the prices to drop. Y ?

Because they are sound reputable.......so ppl believed and panic sell.......

So they buy up slowly.........

When prices go up, they will come out and say again........

By then, they will comment that the market has good potiential to buy..........cause the price to go up.. Y ?

Because they are sound reputable.......so ppl believed and panic buy.......

So they sell down slowly.........

Who win ? BBs lah....

Who lose ? retail trader lah.......

Look at now the market..........can be so bad meh ......think for yourself.....

 

At the start of year there was this analyst being interviewed on TV and he said the STI would be flat in 2007. Look at STI now....

 

Analysts can say whatever they like.............

 

no wonder keep dropping....

 

Business Times - 26 Jun 2007

Contrarian report calls for a sell on S'pore stocks

Citigroup Research says price-to-book value of market is now at its highest since 1990

By GRACE CHUA

(SINGAPORE) Researchers at a US bank have gone out on a limb by recommending investors to 'sell Singapore' and put their money into Taiwan.

Singapore is now an expensive market, says the strategy report from Citigroup Research - which runs starkly counter to the market consensus and demonstrates a sudden about-turn in the bank's own view. The recommendation follows three years of 'double overweight' by the US research house.

Markus Rosgen, Citi's chief Asia strategist, said in the 19-page report dated June 24 that it is time to take Singapore to underweight.

'Singapore has many things going for it; the equity market is not one of them,' Mr Rosgen said.

'The price to book value (P/BV) is now the highest it has ever been since 1990. We have enjoyed the ride; it's time to get off,' he said, adding that Singapore is also expensive on asset and cashflow basis.

Instead, he is calling a 'buy' on Taiwan, where the market sentiment is the worst in the region.

'Relative to the region, valuations have hit levels only seen in crisis periods. Finally, this market has about as much momentum as a sloth. This is a value, not momentum, play,' he said.

Singapore stocks yesterday finished sharply lower, the victims of a triple whammy involving Wall Street's Friday woes, slides in Hong Kong and China, and Citigroup's 'sell Singapore, buy Taiwan' recommendation.

The Straits Times Index, which until mid-afternoon exhibited stubborn resistance to the selling pressure, finally gave in during the final two hours, ending 35.05 points lower at 3,580.33.

Elsewhere, regional bourses including Tokyo, Hong Kong, Kuala Lumpur, Shanghai and Shenzhen also traded lower.

Citigroup reduced DBS, SPH and StarHub's weightage in its model Asia ex-Japan portfolio, and removed Parkway and ComfortDelgro.

It also decreased the underweight of Taiwan's TSMC and Acer - both in the technology sector - and added Far Eastone and Formosa Plastics to the portfolio. The Singapore market is still set to grow, but will grow less relative to Taiwan's, the report suggests.

Overall, Taiwan and Korea were overweighted in its portfolio while South-east Asia was underweighted.

Mr Rosgen noted that unlike Taiwan, market sentiment in Singapore 'is not only through the roof but beyond the clouds' and 'is now approaching levels last seen in the great Asian bull run of 1993-94'.

'Since 1995, it has always paid to go against the consensus asset allocation. We believe this will be the case again this year,' he said. 'It pays to buy into markets when no one likes them and sell those markets that are in the spotlight.'

Indeed, since June 1995, following the consensus on Asian equity investment has led to underperforming the benchmark by 3.9 per cent, while going against the grain has led to an outperformance of 21.1 per cent.

Over the last three years, Citigroup had favoured Singapore because it was cheap, had poor sentiment but offered a high risk reward. In the post-Sars period, Singapore, with its proactive corporate sector, also showed strong reflationary benefits.

'To this day, Singapore Inc remains one of the few places where corporates have leveraged up their balance sheet and the fact of returning cash to shareholders does not send the CFO in to apoplexy. However, we believe that at this stage much of the good news is in the price,' Mr Rosgen said.

At a multiple of 2.6, Singapore's price/book value (P/BV) is its highest in 17 years.

Citigroup analysts predict that, based on P/BV data since 1990, buying Singapore at its current multiple would lead to losses 100 per cent of the time in the next three, six, nine and 12 months.

In contrast, Taiwan's P/BV is at 2.2. The probability of positive returns on Taiwan is 44 per cent, 47 per cent, 51 per cent and 50 per cent in the next three, six, nine and 12 months. These figures can be compared to Asia as a whole, where the probability of negative returns is 54 per cent, 69 per cent, 92 per cent and 85 per cent over the next three, six, nine and 12 months.

While Taiwan's cross-strait relations with China have been a source of market disappointment, Citigroup analysts believe politics 'will either be viewed as a non-event, or actually a positive catalyst for the market'.