What has the Budget done for STI

STI has been surprisingly quiet after the budget was announced last week. It hovered slightly below previous weeks but it did not react with clear indication of a recovery or a downturn. More details of the budget and how it impacts Singapore, Businesses and Investors in the previous post. As of now tensions in the island with respect to Covid-19 has certainly shrunk significantly knowing that many has been discharged and the number of new cases has not been increasing. Overall, I do sense a recovery in the domestic markets, however with the travel restrictions imposed internationally, the economy is still in its weak state at the moment.

STI – Updated Daily Chart

Unfortunately the consolidation in the past weeks has shown the cautious tone taken by investors in SG market. At the moment, the daily chart shows that the uptrend is still in tact however, there is a likelihood for further downside if SG follows US’s red closing last Friday at closing. Either way there is no significant news to push STI out of consolidation as of now.

STI – Updated Weekly Chart

Breakout of 9 and 20 MA unsuccessful

With the rejection from the past week despite a “strong” budget, it shows that the market is still generally pessimistic. This is further aggravated by the news led by new surge in number of cases of Covid-19 in Japan and Korea. All in all, the outcome will be determined by how the market decides to take the virus. By previous standards, this virus has been sufficiently utilized to justify a variety of mishaps and under performance. Thus, it will eventually reach a point where there is a new new item which will outweigh the “seriousness” of Covid-19.

Author’s Call as of 23 Feb 2020

• STI breakout of 9 and 20 Weeks MA was unsuccessful despite the supposed boost from the budget
• Market is still in the red thinking that further developments of Covid-19 can threaten upside in near term
• Some affected counters are in deep red at the moment and it will be wise to pick some up for higher yield and await for recovery
• Week ahead will present new info on the outbreaks in other developed countries

Author’s Call as of 16 Feb 2020

• Awaiting news and updates from SG budget 2020
• Looking out for businesses which will be crucial for the developments of Singapore for the coming years
• How would the govt present a package that is labeled optimism in the growing fears of Covid-19.
• US and China has to role play till Trump is re-elected – greater political stability will be observed