Market Notes: Lost Decade in Singapore Straits Times Index (STI)

If you have noticed, I don't really post much of the Singapore companies that are listed in the Singapore Stock Exchange (SGX). 

If we compare the charts of STI against HSI and S&P 500, we will notice that STI has been really under water and with this pandemic, it is almost like a lost decade with no real economic move for Singapore blue chips in particular. 

STI performance for past 13 years since GFC (2007 - 2020)

With its peak during 2007 at 3837 and crashing through the floor during 2008-2009, it has never managed to break its highs and its last highest point was at 3624 during May 2018 before starting the downtrend. It is good to note that STI has always been a very sensitive barometer against the global economy as Singapore is always heavy in global trade. 

However in recent years, STI has failed to lure any big Tech firms to be listed in Singapore resulting in the 3 local banks forming a big part of STI.  

HSI performance for the past 13 years since GFC (2007-2020)

Looking at the performance of Hang Seng Index for the past 13 years as well, it exceed its 2007 highs at 31,897 during Jan 2018 at 33,484 before it came tumbling down. You may notice a trend that STI and HSI both started the downtrend in 2018 and it was the year where the trade war started.  

However coming back to the original point, HSI was poised to perform pretty well if not for the trade war and the Hong Kong protest that consumed the city. Now with the new Hang Seng Tech Index in play, we can see that Hong Kong is drawing lots of big Chinese tech companies to list in HSI and also in Shanghai Stock Exchange (SSE) which they are able to avoid scrutiny from the US government. 

S&P 500 performance for the past 13 years since GFC (2007-2020)

Needless to say, S&P 500 has almost increased up to 400% since its low in Mar 2009. This is fueled by limitless money printing from the Feds since then and markets have never looked back. We will notice that the dip started in Oct 2018 and primarily due to the trade war between US and China, Fed increasing its interest rate since 2009 and also tightening their monetary policies. 

Liquidity has always been the game changer here which is likely the main reason why we did not see a total market collapse in Feb/Mar 2020 when the Fed announced QE again with unlimited printing. 

I will cover more about what makes up the STI and some of the blue chips that people may have invested but would likely be in the red over the past 10 years. 

Disclaimer: Whatever posted here is purely my personal view. It is not an inducement to trade and not responsible for any losses. Tips and News might just be rumors in the market. I take no responsibility for any gains or losses as a result of reading my analyses, judgement and opinions. Trade with care and diligence please!