GBP/USD PRICE ACTION DRIVEN BY THE US DOLLAR.

Sterling hits a multi-month low to struggle against a recovery of US dollar with GBPUSD going towards a potential break below 1.3000. Daily Forex Signals helpful in analysing the forex prices. When US President Trump appeared to handle back on some of his harder trade restrictions with China, it would be a boost Wednesday. 

           The US dollar immediately broke to the topside and is now making a new monthly high rate with further gains like the US continues to hike rates in the months ahead. With Brexit on the menu at the EU Summit sterling also face a couple of potentially tricky days ahead. Forex Trading Picks No resolution is expected but a further round of negative talk from the EU will increase fears of a no-deal Brexit which neither side really wants.

Sterling can collect some strength from some quarter, GBPUSD set to break below 1.3000. While the British Pound continues to perform well against the NZD and CAD, and only marginally underperforming against the EUR, GBPUSD is a victim of a strong USD complex. Client sentiment also shows that retail remains heavily long of the pair. 

November low (1.3040) is now the final level of support before the August low at 1.2774 comes into play.  Pointing lower, while the MACD band remains negative, but the RSI indicator is now in the oversold region.

LONG TERM INVESTING CONCEPT BY WARREN BUFFETT;

I start with Buffett’s well-known saying: “Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time." 

                                                  

Warren Buffett is probably one of the best investors in the world.  One of the key reason for Buffett's incredible return in the stock market is his Patience. He is well-known for holding his stocks for the long-term. In fact, his favorite holding period in stocks is “forever”.  Stock Tips

From 1965 to 2017, annual returns of around 19% for his company’s shareholders was generated by Buffett. If you had invested just $1,000 in his firm, you would be sitting on a cool $8.9 million by 2017.

Yes, Buffett has sold shares often, but it is the thinking behind his quote that matters. If you have a long time horizon when investing, you will focus on the things that matter (hint: stock prices are not one of them) and will not bother with the things that don’t. STOCK INVESTMENT

www.mmfsolutions.sg

For any business to do well, it requires a considerable amount of time. By focusing on the long-term, we are forced to think about the quality and fundamentals of the company we are investing in. If we have an “investing” time frame of just one month, we would only be looking at stock price fluctuations alone, and it turns the damage to our portfolio. The daily fluctuation in stock prices will not do any good for our psychological health as well.

However, if our investing time frame is measured in decades or even generations, we will be forced to think about the things that matter: The long-term prospects of a business; the leaders behind a company; and the value of a business. Singapore Stock Blog

we want to invest in companies that have products or services in the next few years that will not become outdated  – ideally, we want companies with businesses that can succeed. Moreover, when we invest in the long-term, the probability of suffering losses will be much lower. 

WEEKLY FORCAST FOR GBP/USD WHICH SUFFERS TRADE WARS

www.mmfsolutions.sg

GBP/USD continued struggling with a hard time. Brexit, Carney influenced it. Now What’s next? The EU Summit on Brexit and final GDP are the center of attraction. Forex Singapore

A compromise had reached by the UK government, managed to overcome yet another vote in parliament on the Brexit bill, but this is not necessarily a good thing, as chances for a hard Brexit are still real. US President Trump rattled markets with yet another contemplation of slapping further tariffs on China. The pound was carried along to lower ground. Here are the key event for GBP/USD. 

• High Street Lending: On Tuesday, 8:30, The official mortgage figures leads over the measure of lending reflects around two-thirds of mortgages. In April, they reported a level of 38K, up from the previous month.
• CBI Realized Sales:  The Confederation of British Industry provided a positive surprise in May with an upbeat score of 11. Another small increase could be seen for June Tuesday, 10:00.

EU Summit:  Leaders of the European Union meet to discuss various topics and Brexit tops the agenda on Thursday and Friday. By this meeting, the EU and the UK were expected to reach agreements on the main topics of the Irish border and the Customs Union and it seems nothing will be achieved.  Daily Forex Signals  There is a high likelihood that can be kicked down the road to the next EU Summit in October, where everything will need to be discussed ahead of March 29th, 2019, Brexit day. The British Pound will likely remain pressured but a failure to agree on anything may weigh on broader markets as well. In additions, the EU Summit will likely include a discussion on the trade spat with the US.

• GfK Consumer Confidence: On the middle day of the week. The 2000 strong survey showed a slight improvement in consumer sentiment back in May, up to -7 points. The negative figure still reflects gloomily among consumers. 
• Final GDP: Friday, 8:30. The British economy suffered a significant slop down in the first quarter of the year. It grew by only 0.1% q/q and 1.2% y/y according to the first and second reads. The final release will likely repeat the same figures. The second quarter already looks more promising.
• Current Account: Friday, 8:30. Britain had a current account deficit of 18.4 billion pounds in the last quarter of 2017. A deficit is likely also for Q1 2018 and it may have widened.
• Net Lending to Individuals: On Friday, 8:30. More lending means more economic activity. Net lending stood at 5.7 billion pounds in April, better than had been expected. Another positive month is likely.
• M4 Money Supply:  In April Friday, 8:30. The amount of money in circulation grew by 0.2%, above expectations and after two months of drops. Another modest rise could be seen for May.
• Mortgage Approvals: Contrary to the High Street figure, the overall number of mortgages decreased to 62K in April Friday, 8:30.  Forex Trading Picks

GBP/USD Technical analysis: Pound/dollar fell below 1.3205, reaching new lows.

Technical lines from top to bottom:

1.3780 was a line of support in March and 1.3710 was the lowest point since early in the year.

Below, 1.3615 capped the pair in late 2017. 1.3470 was a swing high in early June.

The round number of 1.34 could provide further support. Further down, 1.33, which supported the pair in December.

1.3250 was a swing low in early June. 1.3205 was the low point in late May and 1.3080 served as support back in November 2017. The ultimate line is 1.3000.

SOME EFFECTIVE WAYS THAT MAY HELPS IN RAISING YOUR STOCK RETURNS

People who interested in trading are often drawn to trading because they want freedom and they are interested in multiplying money. 

                        While initially most traders are drawn to trading because of the promise of great monetary gains, most traders come to realize that trading is essentially a balance of risks and rewards. Each trader must decide whether or not a particular trading system or money management system is appropriate for his risk level. Singapore stock market news.

In this article, I want to highlight three simple steps that investors can take to maximize their returns. Stock Tips

1. Find the most cost-effective broker:

when investing you have to more focused on which stocks you wanted to buy rather than choosing the broker that was most cost-effective for your portfolio. sometimes the brokers are not the most cost optimal for us.In foresight, if I had chosen a more cost-effective broker, I could have saved hundreds of dollars each year. Together with the compounding effect of investing, the savings could have added up.

2. Don’t forget that tax can affect your returns:

Singapore investors who invest in Singapore shares have a big advantage over their foreign counterparts. We do not need to pay capital gains tax or even tax on the dividends earned.

However, when we invest in foreign shares, we have to abide by the tax laws pertaining to the countries in which the companies are listed. For example, investors need to pay a 30% tax on their dividends when investing in shares listed in the United States. Tax can have a major impact on our returns.  Ideally, we should try to invest in stocks that we do not need to pay tax for.

3. Save on foreign exchange expenses

When dealing with foreign stocks, investors often overlook the cost of foreign exchange. Banks charge a commission for each transaction we make. To save costs, investors should find the bank that has the best exchange rate. Singapore Stock Blog.

It is also useful to take any foreign currency fluctuations into account when calculating our returns. As a rule of thumb, I try not to invest in shares in a country that has an unstable currency. Even if the stock you have invested in provides good returns, the devaluation of the currency will certainly affect your profits.

iFAST & RAFFLES HAVE SHORT TERM PAIN BUT FOR LONG TERM GAIN

Today iFAST Corporation Ltd (SGX: AIY) and Raffles Medical Group Ltd (SGX: BSL) these 2 stocks have seen fallen hard from their peaks, but these two companies could still be great investments in the upcoming years.  let's see-  Share Investment

Company 1: iFAST

The chairman and chief executive of iFAST are Lim Chung Chun. It is an Internet-based investment products distribution platform that provides a comprehensive range of investment products and services to both corporate clients and retail investors. 

In May 2015 iFAST's shares are exchanging hands at S$1.06 apiece, which seen 32% down from a peak of S$ 1.565.

iFAST’s China operations posted a loss in 2017, just like in 2016. However, the company’s business in China is still in its early days as it was launched only in 2016. It will take time for iFAST’s operations in the country to stabilize.  Stock Market News Today

Lim Chung Chun said the following in the company’s 2017 annual report:

China is expected to be the biggest wealth management market in Asia, and it is a market that we should not ignore. Some shareholders have been concerned about the operating losses that we are currently incurring for China. We see this initial phase as an important investment for the long run. iFAST expects losses from China in 2018, and for the losses to be comparable to that in 2017. In the coming years, iFAST thinks that China can be an important contributor to its overall business.  Penny Stock Singapore

Company 2: Raffles Medical

Raffles Medical,  Established in 1976 is one of the largest private healthcare groups in Singapore. It also operates with 12 cities across Singapore, China, Japan, Vietnam, and Cambodia.

In recent time the company’s stock has not been doing well. One of the main reasons for this poor performance is that Raffles Medical’s business growth has slowed down tremendously. From the time high of S$1.675 seen in May 2016, Raffles Medical’s shares are changing hands at S$1.02 each now – that’s a fall of nearly 40%.

From 2014 to 2017, the company’s earnings per share came in at around 4.0 Singapore cents in each year. The market may also be worried about the start-up losses that the company is going to suffer when it opens its new hospitals in China.  Stock Reccomendation

However, it is the China hospitals that I feel will fuel growth for Raffles Medical over the long run. The private healthcare services provider is developing a 400-bed international general hospital in Shanghai, and a 700-bed international tertiary general hospital in Chongqing. The hospitals are scheduled to open in the second half of 2019, and the fourth quarter of 2018, respectively. Yes, start-up losses will be incurred. But if investors have a long-term mindset, the losses are necessary to position the company for future growth. In other words, this is some short-term pain for long-term gains.   Singapore Stocks To Buy

To give context for the potential that Raffles Medical has in Shanghai and Chongqing, Singapore’s population was just 5.5 million in 2015 whereas the two Chinese cities had populations of 30.2 million and 24.2 million, respectively. The sheer size of the market in China should ensure that Raffles Medical does not stay anemic for long.

Experts Advice: Capital World Ltd one of the Best Stocks in Singapore to Trade

Warren Buffets

According to the secret method or formula, Chong Ser Jing recently ranked all the stocks in the Singapore market by an investing strategy generalized by Joel Greenblatt in his book -"The Little Book That Beats The Market". For 2018 when Ser Jing wanted to find the 30 best stocks in Singapore, with the help of secret method, he found Capital World Ltd (SGX: 1D5)  to be one of them.   Share Investment 

Capital World is a property developer company establishes joint ventures with landowners to minimize its initial capital outlay. It is also known as Terratech Group Limited and also involved with the production and sale of premium-quality marble blocks and slabs, aggregates, and calcium carbonate powder. The executive director and chief executive of Capital World are Siow Chien Fu. Meanwhile, Tan Eng Kiat Dominic is the group’s non-executive chairman.

As Capital World was highly ranked on Greenblatt’s book, Warren Buffett is one of the greatest investors in the world would be interested in the company? we found an answer to this question by six-point acquisition criteria formulated by the Oracle of Omaha to give us some clues. However, more importantly, Buffett’s checklist deep dive into Capital World’s financials can help investors to develop a better understanding of the company. Singapore Stock Blog

With that, let’s turn to Buffett’s acquisition criteria.

1. Pre-tax earnings of at least US$75 million

In 2017, Capital World had pre-tax earnings of RM102.1 million (around US$25.5 million), which is much lower than the first criterion. Retail investors looking into Singapore-listed companies. Buffett has this criterion in place because his acquisition targets need to be of a certain size to move the needle for Berkshire Hathaway to control US$500 billion.

2. Demonstrated the consistent earning power

Buffett to determine the second criterion helps if a company has a stable or growing business. Companies that have a history of steady and growing earnings tend to have competitive advantages that help their businesses grow over time.

3. Good returns on equity (ROE) while no debt

Generally, a company that has a history of generating good ROE has a high chance of possessing durable competitive advantages. This criterion’s purpose is similar to the second: It helps Buffett to identify companies with competitive advantages. The company ended 2017 with an ROE of 49.6% and negligible debt.

4. Management in place

Management point is a reminder to take a look at the people running a company when researching a stock. Buffett did not want to provide a management team when he acquires a company. For stock market investors this criterion has no real meaning, but public-listed companies almost have leaders in place. 

5. A simple business

 Capital World is a simple business to understand. However, it is worth noting that Buffett is only interested in acquiring businesses that he understands. Going with this thought simple business may be complicated for you, and vice versa.

6. An offering price

This is another criterion in Buffett’s checklist that is not applicable for stock market investors, since stocks have quoted prices that are easily seen, unlike the private businesses that Buffett evaluates for acquisitions. This criterion, though, serves as a useful reminder that the price we pay for a stock is critical.  Singapore Stock Market News

If we invest in a stock at an expensive valuation the chances of our investment succeeding will be low. A famous quote from Buffett, “Price is what you pay, a value is what you get,” rings true here.

Coming to Capital World, the company last traded at a stock price of S$0.064 on Monday. This translates to a price-to-book ratio of 0.8.

Updated Technical Analysis For GBP/USD:

GBP/USD had been going with a hard time, the strength of the US dollar and as the UK government made compromises on the Brexit Bill. What’s next? Now the focus is on the BOE’s rate decision and the Mansion House speech by Mark Carney. Forex Singapore

A compromise had reached by the UK government with the pro-Remain rebels in order to secure a victory in Parliament over the amendments suggested by the House of Lords. This could lead to a softer Brexit, but other factors complicated the picture. GBP/USD fell sharply. UK inflation disappointed with 2.4% y/y.  When retail sales beat expectations, the jobs report was mixed with unimpressive salaries but a drop in jobless claims.  The Fed raised interest rates and signaled two additional moves in the US, The hawkish hike took time to materialize in markets and the greenback exploded only after American retail sales beat expectations. Here are the key events and GBP/USD Forecast after the Brexit battles, Carney carnage awaited. Daily Forex Signals

• Rightmove HPI: According to Rightmove, House prices increased by 0.8% on Sunday, April, showing some flexibility in a sector that struggled earlier in the year.

• CBI Industrial Order Expectations: On Wednesday, 10:10. Britain’s industry is suffering from hiccups as this measure of orders has shown. A drop of -3 was seen last time and bounce back to positive ground, 1 point, is on the cards this time.

• Public Sector Net Borrowing:  The British government borrowed a total of 6.2 billion pounds, within normal ranges on Thursday, 8:30. A small squeeze in public lending is likely now: 5.1 billion.

• UK rate decision: Thursday, 11:00. The Bank of England left the interest rate changing its intentions after data came out worse than expected unchanged in May. The BOE is expected to leave its policy once again in this meeting which does not include the publication of the Quarterly Inflation Report nor a press conference. At the same time, the Bank also publishes its meeting minutes and this will reveal the voting pattern. Back in May, two members voted to raise rates while seven, including Governor Carney, voted to leave it unchanged. The same pattern is on the cards now. The reaction may be relatively muted as the Governor speaks later in the day.

• Mark Carney talks: The Governor of the BOE will deliver an important speech at Mansion House on Thursday, 20:15. In the past, he used the occasion to signals changes in monetary policy, sometimes not in line with the thoughts of other members. Any twist may be treated with suspicion but could still move the pound. Carney speaks at a time when liquidity is low, so any surprise could have an outsized impact.

• BOE Quarterly Bulletin: The Quarterly Inflation Report on Friday, 11:00 is not as important as the Bank of England’s quarterly report. Nevertheless, an updated view on the economy may impact markets. It will be of interest to see if the BOE remains optimistic about a Spring recovery as we enter the Summer.
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GBP/USD Technical analysis: 

Pound/dollar plunged and closed below 1.33 and made an initial move to the upside, getting close to 1.3470 (mentioned last week).

Technical analysis from top to bottom:

since early in the year 1.3780 was a line of support in March and 1.3710 was the lowest point. 

Below, 1.3615 capped the pair in late 2017. 1.3470 was a swing high in early June.

The round number of 1.34 could provide further support. Further down, 1.33, which supported the pair in December, is still relevant.

1.3250 was a swing low in early June and 1.3205 was the low point in late May. 1.3080 served as support back in November 2017. The ultimate line is 1.3000. Forex Trading Picks

I remain bearish on GBP/USD, while hopes of a softer Brexit support the pound, the BOE is not close to raising rates, especially as trade issues loom. The US Dollar could gain further strength. 

ASD/ USD TRADING STRATEGY:

We deliver a free guide to get help in building confidence in your AUD/USD trading strategy! Forex Trading Picks

AUD/USD TECHNICAL STRATEGY: NET SHORT AT 0.7547

1. Aussie Dollar resuming downtrend after breaking counter-trend support.

2. Push through May swing low opens the door to test below 0.74 mark.

3. Improved risk/reward setup sought to add to AUD/USD short position.

After breaking counter-trend support, guiding the upswing from the early May, the  Australian Dollar is unprotected to deeper losses against its US counterpart that rise now to looks confirmed as a correction within the context of a longer-term decline launched in late January.

            From the May 9, sellers are composed to challenge low at 0.7413, with a break down on a daily closing basis opening the door for a test of inflection point support stretching back to mid-June 2016 at 0.7335. Immediate resistance is in the 0.7585-0.7606 area.Forex Singapore

The short AUD/USD position activate at 0.7608 and subsequently scaled up near 0.7530 is still in play. Adding to exposure is tempting but the velocity of the latest down move has skewed risk/reward parameters against doing so. A bounce to establish a new swing high against which to set a stop-loss will be sought. Daily Forex Signals

 AUD/USD TRADING RESOURCES:

Just getting started? See our beginners’ guide for FX traders.

Having trouble with your strategy? Here’s the #1 mistake that traders make.

Join a free Trading Q&A webinar and have your questions answered.

Real Estate Investment Trusts (REITs) In CapitaLand Retail China Trust

CAPITAMALL

CapitaLand Retail China Trust (CRCT) (SGX: (AU8U) is a Singapore-based real estate investment trust (“REIT”) which has a diversified portfolio of income-producing real estate used primarily for retail purposes and located in China. Share Invstment Some of the properties in its portfolio include CapitaMall Xizhimen, CapitaMall Wangjing, and CapitaMall Grand Canyon. CapitaLand Retail China Trust has a market capitalization of S$1.42 billion. Many investors like to invest in real estate investment trusts (REITs) as these investment vehicles produce regular income, often on a quarterly basis. 

Here are three reasons to like CapitaLand Retail China Trust: 
Singapore Stock Blog

1. Resilient portfolio:

 This REIT has the flexibility of its portfolio. A retail REIT is not easy in this day-and-age due to competition from e-commerce. CapitaLand Retail China Trust has managed to maintain a commendable portfolio occupancy rate of 94.9%, as of 31 March 2018. In 2017, another telling sign of shopper traffic to the REIT’s malls increased by 4.7%, while tenants’ sales inched up by 0.8%. It also achieved a rental reversion rate of 5.6% in 2017. For the first quarter of 2018, the REIT’s rental reversion rate did even better, increasing by 12.8%. All these are the testament to CapitaLand Retail China Trust’s resilient portfolio.

2. Strong financial health

 The REIT had a gearing ratio of 32.5%, which is way below the regulatory limit of 45%. It means that the REIT has a relatively low level of financial burden, and has room to increase its borrowings if needed for future acquisitions. CapitaLand Retail China Trust’s gearing ratio is also below the average ratio of 34.8% among the REITs. The interest coverage ratio measures how easily a REIT can pay the interest expenses on its outstanding loans. Singapore Stock Market News

3. Past and future growth

From 2007 to 2017, CapitaLand Retail China Trust is growing both with its net property income (NPI) and distribution per unit (DPU). During the period, its NPI had increased from S$46.5 million to S$149.2 million, while its DPU had climbed from 6.72 cents to 10.10 cents. These translate to annualized growth rates of 12.4% and 4.2%, respectively.

Since January 2018, CapitaLand Retail China Trust can go on to deliver stellar returns in the years ahead due to: (1) The rising disposable income of the middle-class population in China; (2) the rights of first refusal to purchase assets held by its sponsor, CapitaLand Limited (SGX: C31); and (3) the addition of Rock Square to the REIT’s portfolio which should drive its future performance.

ONE OF THE SECURE STOCK INVESTMENT COMPANY WHICH I LIKE MOST:

Stock Research Singapore

Recently, when I was searching stocks, I like one company from that was obscured by a few Singapore-listed companies, thought were interesting. These companies are not extensively covered by big-name investment analysts.

I will find the first company that I like: "Advancer Global Ltd (SGX: 43Q)". Let’s find out more about this company and the reasons why I like it.

About the background and business:

Advancer Global, (the Singapore stock market) is a workforce solutions and services provider in Singapore which listed in July 2016. It has three business divisions: employment services, facilities management services, and security services. Advancer Global’s offering of necessary services for both corporations and the general public. Stock Investment

These services are generally required in both good and bad economic conditions. Security service is one such example which is defensive in nature. Also, with many working adults not having the time to look after their homes, lean to their elder parents, children and foreign domestic workers are in demand.

Financial Figure: Financial Performance is one of the main things to look at before investing in a company:

• Advancer Global’s revenue surged 28.2% to S$65.3 million with all three business divisions performing well for the year ended on 31 December 2017. Stock Market News Today  With the higher revenue generated due to increased placements of foreign domestic workers to households in Singapore, contributions from subsidiaries acquired in the second half of 2016, and higher aggregate service fees charged for on-going security services projects. 

• Respectively, Advancer Global’s customer retention rates for the facilities management and the security services businesses were also high at 87.2% and 93.9%. The company has an asset-light business model with low capital expenditure needs. It had a capital expenditure of below S$500,000 in each year from 2013 to 2015.

• In 2017, cash flow from operations 32.7% to S$2.9 million, The free cash flow generated can be used by the company to reinvest into its own business, to acquire other businesses, hand out dividends to its shareholders, buy back its own shares, or pay off debt.

• Advancer Global has a strong balance sheet as well, to tide through tough economic conditions. It had S$8.0 million in cash and cash equivalents, and total debt of just S$1.9 million which gives a net profit of S$6.1 million.

• At last, Advancer Global also grows its dividends in 2017 and total dividend was 0.83 per share, representing a dividend payout ratio of just 49.1%. Generally, if a company has a low payout ratio (say, below 80%), it has room for error to maintain its dividend even if its profits were to drop in the future.

BETTER INVESTMENT DECISION BETWEEN TOP GLOVES AND RIVERSTONE HOLDINGS

There are many companies listed on the stock exchange in Singapore. sometimes it is hard to determine which company in a particular industry is better than its peers. 

In this article, we will make some quick comparisons between two companies operating in the glove manufacturing industry, Top Glove (SGX: BVA) and Riverstone Holdings Limited (SGX: AP4). Singapore Stock Market News 

Over past few years, Glove-manufacturing businesses enhanced its strong growth in demand for healthcare and clean room gloves, favorable foreign exchange rates and low raw material prices have been catalysts to their growth. 

To determine which might give you more bang for the buck: 

Top Glove industry with its largest market player reports its market share of about 25% and has a market capitalization of around S$4.3 billion and production of 45 billion gloves annually. It supplies to over 2,000 customers across 195 countries. Top Glove has grown its revenue from S$901.6 million in FY2014 to S$1.24 billion over the last 12-month period ended 28 February 2018. And its EBITDA from S$105.2 million in FY2014 to S$166.8 million and also its earnings per share from 16 sen in FY 2013 to 30.52 sen in the last 12-month reporting period. 

In comparison, Riverstone Holdings is a much smaller player with its has an annual production of 9 billion gloves and a market capitalization of S$718.85 million, which are used in the production of hard disk and semiconductors. Because of that, it has been able to extract higher margins than its competitors. Riverstone Holdings has revenue from S$151 million in 2014 to S$277.8 million over its last 12-month period ended 31 March 2018. And increased its EBITDA from S$35.3 million in 2014 to S$64.3 and growing its earnings per share from 8 sen in 2013 to 17.1 sen in the last 12-month period. 

Revenue growth: At last Top Glove compounded its annual growth rate of 7.4% and Riverstone of 15.4%. The above study shows Riverstone has managed its growth revenue at a faster pace than Top Gloves. Stock Research Singapore 

EBITDA growth: So Top Gloves annually growth compounded is 10.7% On the other hand, Riverstone is good for a 15.2% compounded annual growth. Once again, Riverstone comes up top. 

Earnings per share growth: Riverstone managed a compounded growth of 15.6%, and Top Gloves translates to a 13.1% growth over the five-year period. Here also reports says that Riverstone Holding did marginally better than Top Glove.

GLOBAL STOCK MARKET : A MELTDOWN TRAGEDY

"Don't forget you are human. It's ok to have a meltdown. just don't unpack and live there. cry it out and then focus on where you are headed."

            Quick Thought of The Week 'Global Stock Market: A Meltdown Tragedy' is featured by David Kuo for readers of Stock Advisor Singapore and Stock Advisor Gold. Singapore Stock Market News

So, a near 500-points drop in the Big Board must feel like a calamity. So, a near 500-points drop in the Dow must feel like a calamity, Or an opportunity to climb on a soapbox.

          It all started in Italy when investors took fright at the political struggle between the Eurosceptic populists and the pro-European established politicians when the President of Italy stepped in to reject the populist choice for finance minister that things started to unravel. Political risk suddenly came to the fore.

Investors are running their slide rules over other bonds and jumping into safe-haven assets.

Singapore Stock Blog

The main beneficiary is the US dollar that could have severe repercussions for other currencies. What’s more, some of our neighbors in South East Asia could have a hairy few days, as they try to defend their currencies.

It could also have consequences for their stock markets. Markets could sell off before bargain hunters step in to pick up cheap stocks. But remember this….…. It doesn’t take a long time for bargain hunters to find the bargains in the stock market anymore. And by the time they’re finished buying, the stocks aren’t bargains anymore.

Weekly Forecast USD/JPY June 4-8 – Let's Make Good Profit This Week

The U.S. dollar, Japanese yen (USD JPY) is a currency pairing and can be traded against each other.  The USD JPY is among the most traded currency pairs which fell to new lows level but reduced most of its losses in a week that saw fears about trade worries and a potential movement of  Italy leap. FOREX TRADING PICKS

ITALY TRADE WAR:

 Italy has prevented the risk of early elections but its new government is planning. The new government may still cause trouble for Europe. Here's how Italy gave strength to euro crisis fears and sparked a global stock...Daily Forex Signals even if most Italians still support the single currency. A new round of elections would have brought a stronger majority for the anti-establishment parties and would have been seen as a de-facto referendum on the euro-zone. 

Thus triggering a wide global crisis and the fear of Italy leaving the currency (euro-zone)which results from rising to the highest levels in many years. The crisis arises when the President rejected a Euroskeptic finance minister, Savona. As a compromise was reached this was finally avoided.

Before trade came the crisis encourages a sudden rise in the yen (the safe-haven currency). The US implemented tariffs on steel and aluminum on Canada, Mexico, and the EU. This creates global tensions and a growing fear of trade wars will result in weaker global growth. 

The US economy gained 223K jobs, better than expected as report updated. The wages increased by 0.3% and the annual pace ticked up to 2.7%. This helped the currency pair rise toward the end of the week. 

ISM Non-Manufacturing PMI, North Korea, and trade:

The outstanding figure on a relatively lightweight calendar is the ISM Non-Manufacturing PMI published on Tuesday. As the NFP is already out, the report will have its own space. An increase is expected. In addition to the lack of top-tier figures, there will be no Fed speeches as they are already in a blackout period ahead of the decision in the following week.

Preparations are also going on for the reinstated Trump-Kim Summit. Any ups and down can impact the safe-haven Japanese yen.

The G-7 came out against America’s behavior on trade, which has worsened with all the world. The new tariffs on steel and aluminum may be joined by tariffs on Chinese tech. Japan is not only a safe haven but also dependent on trade.

See all the main events in the Forex Weekly Outlook

USD/JPY Technical Analysis: 

112.20 supported the pair back in December. It is followed by 111.40 which capped the pair in mid-May

Further down, 110.50 was a swing high in February. The round number of 110 serves as a psychological level. 109.50 held the pair back in late April.

109 was a pivotal line within the range. 108.70 was a stepping stone on the way up. 108.10 was a low point in late May and serves as a support line.

Lower, we find 107.50 capped the pair in early April and is a strong line.

106.50 was a resistance line in mid-February. and then resistance in early March. 105.55 was the first swing low.

Forex Singapore

Is this a right time to evaluate Singapore stocks for trading Opportunity?

Cheaper or Expensive?

A stock market is “cheap” or “expensive” depends on its valuation. 

Valuation is calculated by the price-to-earnings (P/E) ratio. For an individual stock, computing the P/E ratio involves dividing a company’s share price by its earnings per share. Singapore Stock Blog

There are two methods to simplify our investing decision in getting a better decision or finding which one is cheaper or expensive:

1. To compare the market’s current price-to-earnings (PE) ratio to the market’s long-term average PE ratio.

2. To determine the number of net-net stocks in the market.

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First Method: In this method, we have to current PE ratio with long-term average PE ratio. The local stock market can be represented by the Straits Times Index (SGX: ^STI). It consists of the 30 biggest stocks in Singapore. Since it is difficult to get the past daily PE ratios of the index. On14 May 2018, the SPDR STI ETF had found a PE ratio of 11.6. The long-term average & STI’s average PE ratio from 1973 to 2010 was 16.9 and hit 35 as a high PE  ratio and a low PE ratio for the STI: At the start of 2009, the index was valued at 6 times its trailing earnings.

Based on the data, it is realistic to say that stocks in Singapore are cheaper than average now. Stock recommendation

Second Method: In this method, we measure the number of net-net stocks available in the local market because market capitalization of this stock is lower than its net current value. And it is calculated by using this formula:

Net current asset value = Total current assets – Total liabilities

It is an appropriate theory as investors can get a discount on the company’s current assets, such as cash, after clearing off all liabilities. 

If a large number of net-net stocks than usual can be found in a stock market at a certain point in time, then stocks would be cheapest at that moment. Stock Tips

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From the above chart, we can observe an inverse relationship - when the STI is at a peak, the net-net stock count is low, and when the STI is at a low, the net-net stock count is high. we noted some points from the finding of the graph;

1. Firstly, we saw the net-net stock count fall to a low of below 50 for second-half of 2007 when the STI reached a peak before the Great Financial Crisis struck.

2. Secondly, we saw when the net-net stock count hit a high of nearly 200 in first-half of 2009 and it was during this time that the STI reached its bottom during the crisis.