President’s Message – February 2025

Date: February 6, 2025

When investing, it pays to look closer to home

Dear Members

The local stock market has in recent years come under scrutiny and no small amount of criticism for its perceived underperformance and lack of liquidity. It would be fair to say therefore, that the market in 2024 really surprised its detractors with the Straits Times Index (STI) surging almost 17%, its best showing since 2017 and making it Southeast Asia’s best performer.

Granted, the index owed much of this gain to the three banks but there were also notable contributions from Yangzijiang Shipbuilding and Singtel. Savvy investors would also know that there are many other segments worth considering.

For instance, the Singapore Exchange (SGX) in a report at the end of 2024 “Tap into Singapore’s Economic Growth with STI’’ said by investing in the STI, you gain exposure to a diverse portfolio of top-performing companies across various sectors, including finance, real estate, and technology.

“This index not only reflects the strength and stability of Singapore’s economy but also provides a gateway to the broader Asian market. With its strategic location and business-friendly environment, Singapore continues to attract global investors, making the STI a compelling choice for those looking to secure long-term, sustainable returns’’.

SIAS shares this view and encourages local investors to look closer to home for decent investment opportunities rather than venture into other markets where risks abound, some of which may not be that obvious.

Overseas investing comes with currency risk, tax considerations, relative unfamiliarity with the companies involved and heavy expenses to enforce one’s legal rights.

Because of time zone differences, investors may be unable to react in time to new developments that could impact their investments. All these considerations should be factored into investment decisions but may not by most investors because of “FOMO’’ or fear of missing out.

Furthermore, since interest rates are expected to gradually head lower this year, a sector that would greatly benefit would be real estate investment trusts or REITs. In this regard, note that SGX boasts the second largest REIT market in Asia outside of Japan so there are plenty of investment opportunities.

For members unsure of how or where to start their investment journey, SIAS offers many free educational programmes for the public. In addition, you can email SIAS with suggestions if you would like to see certain subjects featured.

Our Corporate Connect sessions for the month will feature ESR-REIT on 25^th Feb, which invests in industrial properties.

Members are encouraged to sign up for other SIAS investor education programmes and company engagement sessions to keep yourselves updated.

That’s all for now and until next month I wish you all the best in your investments in 2025.

Wishing you a prosperous and successful Chinese New Year in the Year of the Snake!

 

David Gerald
Founder, President & CEO, SIAS