Wednesday, September 14, 2016

Factors that influence share prices in Singapore Stock Exchange

From my personal observation, I notice some factors that affect the share prices of the listed companies in Singapore Stock Exchange.

The first factor that influence share prices is the performance of the regional and international stock markets.

The stock market in Singapore is not as big as the stock market in Hong Kong and Japan. The price changes in the stock markets in Hong Kong, United States and London affect the share price in Singapore.

The stock market opens at 9 am from Monday to Friday. From 9 am to 10 am, the trend in the share prices follows the stock market in United States. When the Dow Jones Index declines sharply, the Straits Times Index will decline. The decline will not be as drastic as the Dow Jones Index.

From 10 am onwards, the trend in the share prices reflects the influence of the stock market in Hong Kong. Sometimes, the Hang Seng Index falls by 600 points, the Strait Times Index will fall. The fall in Straits Time Index is not as drastic as Hang Seng Index.

Singapore is a very small country with open-economy. It is not surprisingly to see that the investors pay more attention to international stock markets.

The price of oil affects the share prices of listed companies dealing in oil palm. Once the oil price hits a record high, the share prices of listed companies dealing in oil palm will hit the roof.

The second factor that influence share prices is the local sentiment. The share prices in the stock market always show an upward trend before the Singapore National Day. The share prices and volume will decline during the Hungry Ghost Month.

While I can understand the upward trend in the share prices before Singapore National Day, I do not understand the decline during the Hungry Ghost Month. I doubt the ghosts have anything to do with the share prices.

The third factor that influence share prices is the rumors and news release. The rumors are very powerful factor to affect the share prices. The rumor of mergers and acquisitions will increase the share prices to an unreasonable level.

The fourth factor that influence share prices is the technical analyst and foreign investors.  In Singapore, there are many investors using technical analysis methods to predict a trend. Some technical analysts offer a few days workshop to teach technical analysis method of investment.

After the technical analysts and foreign investors buy in bulk, the speculators will push the share prices higher. Most of the drastic increases or decreases affect the share prices of small companies.


Most speculators do not want to play with the share prices of companies under Temasek Holdings.  

2 comments:

  1. Why would anyone not want to play with the shaee prices of companies under Temasek Holdings ? Are there any risk involved by doing so?

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    Replies
    1. There is definitely risk in all investments. "Playing" with share price is a very risky concept, no matter who is the backer of the listed companies.
      Companies under Temasek Holdings do not always do well.
      Those who had invested in Chartered Semiconductor since IPO would have lost more than 90% of their capital by the time Temasek sold it off.
      Similarly, those who had invested in NOL before the crash in 2008 and held till the delisting offer would have lost a lot of money.

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