The problem with the Singapore market

OF course some might argue that one should take advantage of the unique characteristics of a particular market and adapt to it. For example, take advantage of the volatility and manipulation to buy things on the cheap. But the fact is that a top-heavy market will inherently never be an efficient one because people look for who is buying/selling the company rather than the company\'s characteristics itself. Like it or not, institutions interpret volatility as risk and they also look for market efficiency and depth of liquidity. These are factors sorely lacking here. And meanwhile, our local big boys look abroad to buy US banks......

Have you ever wonder why our own government Temasek would rather throw money at US banks on the brink of bankrupty, than to support its rising SMEs? Does the Singapore investment arm look down on its own fellow entrepreneurs and feel that they rather place the bets with US bankers than Singapore gutsy businessmen? I once asked a fund manager why he thinks Singapore market trades at such a low PE. His reply caught me by surprise. He said, \"Outside funds view Singapore companies with suspicion. They wonder why the local investors ie Temasek don\'t buy some of these companies, who are trading at 5-8x PE. Instead they rather buy US companies at 30x PE.\" \"Hong Kong, on the other hand, enjoy the support from China. The Chinese money pouring into the HKSE is tremendous. You also have HK billionaires buying their own company shares to support. Li Ka-Shing for instance would put money where his mouth is.He supports his share price when the market is down. Investors believe in him.\" \"In Singapore, you have GLCs\' CEOs selling shares when the market is down. What message are you sending to the outside investors?\" I was totally speechless. :ohmy: :ohmy: :ohmy:

quoting Temasek CEO\'s hubby, PM Lee in his National Day speech \"we must look beyond the cost of living to world opportunities...\"

One other problem with the Singapore market is the weak retail investors. In HK, the retail investors are a force to be reckon with. They are even perceived to be more powerful than the institutional investors, so much so that broking houses organized luncheons for the management to present to the retail investors. I have been to some of these luncheons and I am totally impressed by the questions that these guys asked. Unfortunately, in Singapore, our retail investors shot themselves in the foot by being mainly punters. They lost so much in the dot-com, in the small cap frenzy in 2000, in the Jade saga BUT they continue to punt. If these retail investors spend some efforts to do their homework; buy some Raffles Education, Hyflux, Cosco, Capitaland, OSIM in the early part of 2000....They would be the ones laughing to the bank now. So much for investment education in Singapore. :laugh:

on retail investor education, what can be done to raise their level of sophistication?

It would be a great idea if Nextinsight can organize some good companies to present to the retail investors. Take for instance, you can get Man Wah to do a presentation at a cafe near Raffles Place etc. Dinner can be included. The retail investor gets a chance to meet the Chairman/CEO and feel whether the management is honest or not. I believe a real investor does not mind paying S$10 to listen to the management present, prior to buying S$10,000 worth of shares.