Will the Ruling Party’s Clear Mandate create a clear path for GLCs?
The ruling party’s primary interest is on GDP growth, jobs and business sustainability. With a clear mandate, will it lead to more funds channeled to Government-Linked Companies GLCs like Singtel, Capitaland, SPH and SATS? It remains to be seen but how the market reacts will also depend on everyday investors’ take on the future of these GLCs. My take on the matter is that Singapore has took a severe hit in almost all sectors and it will still take some time before investor’s confidence is back for real.
STI – Updated Daily Chart
Technical analysis wise, STI is showing signs of a trend reversal as the 9 and 20 days moving average is converging and the uptrend in this parallel channel is still intact. At the moment, STI is resting above 20 days MA and will wait for confirmation in the coming week to determine if the short term trend is reversed from a down to uptrend since 24th June.
STI – Updated Weekly Chart
The weekly chart is also showing signs of a trend reversal from down to uptrend. The last trend reversal is since 19 March 2020 and therefore this opportunity is long-awaited. However, further confirmation is still required to see if this reversal is successful on the weekly chart.
Author’s Call as of 12 July 2020
- Ruling party’s interest in GLCs could be strengthened after the election is over
- Both daily and weekly charts are showing signs of trend reversal using 9 and 20 MA
- More full year results will be reported in the coming weeks and some of the reports released has been rather bleak. (E.g. SATS not paying final dividends)
- Opportunities to accumulate is still present at the moment if the general uptrend is still intact
Author’s Call as of 5 July 2020
- Buying interest for STI components continues to increase in near term
- Stabilization of pandemic in SG is providing some support for investors’ confidence
- Looking out for the upper limits of the parallel channel on the daily chart for potential push back
- Continuing to DCA is still the best method if you wish to accumulate or average down your previous month’s purchases.
