Analysts Confident Of Singapore's Fundamentals Despite Market Volatility

Source : Channel NewsAsia, 17 January 2008

Despite the current volatility in the markets, analysts said they remain confident about Singapore's fundamentals.

They blame the jitters on persistent bad news coming out of the US instead.

According to some market-watchers, it's time to pick up bargains and re-assess the portfolio, with the STI just above 3,000 points.

Analysts said that attention should be channelled to the construction and banking-related stocks and added that now is a good time to re-evaluate your portfolio as the market sobers up to the reality of the US economy in recession.

Gabriel Yap, Senior Dealing Director of DMG & Partners, said: "The nature of selling in the last couple of days has been indiscriminate. So essentially when these things do happen, it's time for you to re-juggle your portfolio and re-position your positions in those sectors you think you like."

Market-watchers said that the recent sell-down opens up plenty of opportunities for bargain-hunting.

Wong Sui Jau, General Manager of Fundsupermart.com, said: "For me as an investor, I'd say now is a good time to accumulate bargains. Certainly a lot of investors won't agree (to) that, saying why not wait until its over. But it's extremely hard to get the exact bottom of the market."

And Fundsupermart.com has some interesting figures to back up its stand.

Mr Wong continued: "The STI index was up around 16.6 per cent in 2007. If you take away the 10 best performing days in the 260 trading days, then your 16.6 per cent gains for the whole year will be reduced to a negative 14 per cent loss."

"So it is important to capture a lot of the gains. And these gains happen after a sell-down. That's when the largest gains are," said Mr Wong.

Analysts added that Wednesday’s sharp slide was mainly sentiment-driven, due to the slew of bad news from the US. Overall, they said that Singapore's fundamentals still remain strong.

"What we saw yesterday was not unexpected. When major supports are being broken, essentially all markets will go all the way down to test the next support," said Mr Yap.

With the outlook for the US economy still cloudy, market-watchers said they expect to see volatility for at least another two to six months. - CNA/vm