Strong SG Budget on Monday evening

All of us who felt the intensified worries of the economy and the job markets has fallen for the schemes of the media. Basically, the budget needs to address pressing issues for the coming fiscal year. With a “dreadful” outlook and breadcrumbs of pessimism left by our 3G and 4G leaders over the businesses and health worries in Singapore, this legitimates a more expensive stimulus package for 2020. That is not to say that Covid-19 and its impacts are insignificant, however, the dramatized feel of the matter does raise a few eye brows at times.

We will need to analyze the budget to understand what is the true purpose of the budget. Besides our nation’s most obvious issues such as business sustainability and health, there is also a concern for the coming elections in 2020.

So how will this affect the market in coming week?

Needless to say that there will be a few spikes in the coming week as STI will be excited for the upcoming stimulus package that SG Budget will be implementing to support the weakened economy caused by Geo-political and trade tensions as well as the recent virus outbreak which stalled some of the businesses in Singapore. Therefore, hopefully the shock sent by the government will restore sufficient trust in the economy so that the level of fear in the market can be alleviated.

STI – Updated Weekly Chart

The weekly volatility was considerable with STI retesting the uptrend support line as demarcated by the green line. At the closing for the week, the week’s candlestick was a solid green only resting below the 9 Week MA at the moment. With the SG budget, it might be able to push it higher if the expectations from investors are met to alleviated the business concerns in Singapore.

9 and 20 Weeks MA no longer crossed due to last week’s recovery

Right now, 3222 is still within reach and in the coming week, there is a likelihood after the announced budget for STI to climb beyond and perhaps test the downtrend resistance line. That breakout would be strong and STI will climb much higher after a prolonged consolidation period.

Overall STI has been conservative because of the nature of our businesses in Singapore having a way smaller market capitalization as compared to other major economies. That resilience is also supported by the country’s conservative approach towards the instabilities. Therefore, it is hard to see the significance of US indices hitting all time highs in STI markets.

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

Author’s Call as of 9 February 2020

• STI recovered but currently still below both 20 and 9 MA respectively
• Corona virus impact on the economy is subsiding as the virus is not as lethal as expected by pessimists
• It might lead into a non-lethal pandemic at the moment, thus relieving pressure of the market and crack STI resistance at 3260 levels
• SG budget approaches with a strong focus on transport, business sustainability and virus management
• Consider to accumulate more stocks before Friday’s budget in time for a surge