Reflecting on current stock market
I was just sitting around thinking about the current recession and possible means of investment in this critical times. One option that came into my mind is putting some of your spare cash into the stock market. Banks these days give miserable interest, and moreover, putting money in banks is not a gaurenteed thing anymore.
Big counters like SIA seemed to be very lucarative. With SIA being the best Airlines in the world, winning several awards. However recent news has been stating that SIA’s revenue has dropped, and they may reject some of their earlier orders of the new airbus. With Temasek owning a huge part of SIA, and Ho Ching stepping down, seems that anything related to Temasek or the state doesn’t seem like a good buy.
On the other hand, some “state-owned” counters do still look attractive. SingPost should be an example of such a counter that looks appealing to investers. Unlike Singtel, SIA, who has competition from other companies, the local postal service is still a very monopolised industry. (i.e. SingPost being the only company)
At the moment, SingPost is currently trading at about $0.76 One of the lowest point since November 08, where it was trading just above the $0.60 mark. I think it would be a relatively good time to start chalking up on this counter, bit by bit, especially if the price drops further. Honestly though, I don’t think it will break the $0.60 mark, so the current price should be relatively safe.
If I’m not wrong, I think SingPost has also promised to give out yearlyy dividents of $50 every year. If we convert their share price to relative value (i.e. $760), then for each lot of SingPost owned, we’ll receive $50. I know it isn’t a lot of money, but looking from another perspective, it can be said that we’re earning 6.5% of interest every year. Can someone give me the actual measley interest rate the banks are offering now?
SingPost being government owned, is probably one of the most stable and safest counter you can ever get in the SGX listing. Mail service is a never-ending one, probably irreplaceable as well, and the best part, it that its a monopolist market in Singapore. Without facing any compeition, and a constant demand, how would such a company ever record losses?
I’m sure there are other counters like this that are worth investing. Just keep a look out and I’m sure you’ll find more. Please note that this post is just for reference, and also, for investers with the spare cash. Counters like SingPost is a big NO NO for speculation trading.
Sidetrack a little, a good benchmark to take for the STI would probably when the indices hits the 1,200 mark. Possibly that will happen over the next 12 months, depending on the economy. But hopefully it shouldn’t drop below that level. Anything around there, I’m sure the government would intervene with the country’s reserve to boost the economy.
Well, its just some random thoughts. Let’s see what happens.
