"The bull is coming." 2 fellow brokers said this to me this morning, for no apparent reason. Perhaps they can feel something (they been in the market much more than me) or perhaps they are juz bored (the phone is hardly ringing these days).
Anyway, my quick take on the market:
a) The market is moving away from the recent bouts of bad news (since CNY) on Greece, US job and China inflation. These are becoming old news as market start to move away from them. This is the transition period from negative sentiment to not so negative sentiment, and this is seen keeping stock price well supported for now. The lack of bad news, is seen as good news.
b) However, valuation is no longer as cheap as before. I am not expecting the March bull run that we see last year, although I remain overall bullish that the market is on a recovery path.
c) Nonetheless, this remain a volatile market. There will be upswing and downswing as the market seek out clear direction amidst the lack of a market leader (china or US).
d) I do not see a burst in volume just yet, and only when that happen, then we can see the momentum maintain. Despite the recent rise in the US market, the rise is still not broad base enough.
e) Blue Chip will continue to steer the market. Penny stock...forget it for now.
f) This market is for the brave and nimble - meaning: please take your profit (and dun be greedy) and wait for correction and weakness to pick up share. I am not asking you to churn the market, but what i am saying is rally or down trend unlikely to be sustainable. So take your profit!
g) The strategy: Buy when everyone wants to sell, sell when everyone want to buy. Go for the easy money (but u must be brave). Be patience.
My preference:
a) Commodity related play
- Olam and Noble are my preference. Look to buy on weakness.
- Golden Agri, Wilmar are trading play..as they trace the CPO and crude oil price. If crude oil price is going up, these guys will follow suit most likely.
- Straits Asia - another trading play. Hit by bout of weakness lately due to lack of earning visibility and succession issue.
b) Offshore Oil and Gas play
- Sembmarine
- Kepcorp
- Ezra
These have run up quite a fair bit lately. Look out for oil price. If oil price up, this will rekindle interest in E&P activities and thus raise the possibility of new contract.
c) Property Play
- Recent government measures took some wind out of the properties sector.
- However, feedback from the ground is that the demand is still real.
- As long as interest rate remain low, pple will invest in property.
- More government measures ahead...thus will create buying opportunities.
d) Finance
- Banks result is looking up. Re-valuation, lower NPL, higher interest rate income are all positive factors to come.
e) Reits
- Long term dividend play amid some stability. Most reits has successfully raise fund after last year debacle. So they should remain stable and yet give good DPU.
- Suntec Reits
- Capitaland related Reits
- Starhill global Reits
If singapore IR strategy play off, rents will be on the up again. This will benefits reits.
f) Transport
- SMRT
Talk of revision in earning for SMRT. It is a stable play even in downtrend with good stable earning.
Beside rising ridership, SMRT is likely to see better rental yield from its property arm. That should be another injection in the arm.
For those looking for long term investment, this can be one counter for you.
This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework.
ML is a licensed stockbroker with one of Asia Leading Stock Broker firm. To contact him, please email: icewolfmike@gmail.com
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