Insights into Stock Market for the Second Half. What You Have Missed Last Saturday?

Date: August 4, 2010

by Roger Tan, SIAS Research

Many woke up early last Saturday morning to make their way to MND Auditorium. The event: SIAS Research’s quarterly outlook seminar titled “Will the Second Half be Worse than the First?”.

I kicked the seminar off with an “early bird Q&A special”. This is a pre‐event opening special where I take questions from the floor as a reward to participants who have arrived early.

Participants asked a slew of questions in the 15 minute slot. Questions ranged from what I thought about the Parkway Holdings’ takeover saga to which counters I think they should be looking at and also where I think the market will be heading.

I started the first presentation. In 45 minutes, I explained to the audience the important events that had happened in the last 18 months as well as my interpretation of these events.

I also shared my concerns over the weak economic numbers that have been coming out of the United States. More importantly, using some economic data, I showed that the output gap (between actual and potential economic output) could be widening. In the mid‐term, this may pose a challenge to the US economy – which could extend to the rest of the world.

However, I also highlighted that this would provide more reasons for the US Federal Reserve to extend its expansionary monetary policies. In the short run, momentum in the market is still strong and therefore investors could take advantage of it.

I ended my presentation with some tactical views. I discussed with investors what they could over and under weight and also provided some important, not to be missed, stock picks. Investors who have heeded this advice should have been rewarded that immediate Monday as a few of the highlighted stocks closed between 5% and 7% higher.

Janice Loh, Kim Eng’s Deputy Manager for CFDs, was then invited on stage to show how CFDs can help investors increase their flexibility in implementing investment strategies. Janice explained how investors could use CFDs not only to extend a position and short a counter but also hedge their positions and implement long‐short strategies.

Participants were excited. They could now go beyond long‐only strategy with CFD. Janice’s presentation got participants wanting to know more. They realized that they could implement appropriate strategies in almost any market conditions and the intermission gave participants time to approach Kim Eng’s booth to get more insights into the system.

The last speaker, SIAS Research’s technical analyst Edmund Seow, shed some light on what to expect of the Singapore markets in the next few weeks. Edmund warned investors to expect more volatility ahead and advised them to control their emotions during such periods. “Emotions”, said Edmund “will lag the market!”

The seminar ended with a spirited Question and Answer (Q&A) session with the three speakers on the panel. Participants eagerly jumped in with questions about economies, markets, and CFDs. SPH, Keppel, and UMS, were some companies that participants wanted to know more about.

The seminar ended at noon before our parent company SIAS took over the auditorium for their Corporate Profile Seminar. We tried to answer as many questions as possible before leaving.

We would like to thank all the participants for making our Q&A session so lively and also for making this seminar a success. We would also like to thank Kim Eng for supporting this seminar.

Don’t miss our next quarterly outlook seminar in Oct or Nov 2010 (register your interest with us now if you want). In the meantime, you can look out for our monthly face‐to‐face session to meet our analysts and ask them questions.

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