Diversifying Ruined

SINGAPORE - Singapore share prices plunged 3.35 percent on Wednesday, clobbered by the escalating fallout from the crisis in the US sub-prime mortgage market, dealers said.

News that more hedge funds are being squeezed in the US credit market's troubles led many investors to sell down portfolios, causing heavy losses across the region, they said.

The Straits Times Index fell 113.34 points to 3,273.25 on volume of 2.43 billion shares worth S$2.61 billion.

Declining stocks outnumbered risers 798 to 148, with 626 issues unchanged.

DBS Vickers Securities' retail market strategist, Yeo Kee Yan, said the worsening sub-prime mortgage woes in the US continued to be a drag and further declines are likely after the benchmark index broke through the 3,300-point psychological support level.

"The downtrend is still there, we could see the index correcting to 3,150 in the next few months," Yeo said.

"We still don't know the outcome of this sub-prime problem in the US."

Apart from the unravelling of the US sub-prime credit market, Yeo said he is concerned that a sharp correction in the Chinese stock market could trigger another wave of selling across the region.

A renewed spike in oil prices during the hurricane season in the United States could also add to the markets' volatility, he said.

Banking shares were among the hardest hit again, with DBS Group Holdings down S$1.00 at S$20.20, United Overseas Bank off 60 cents at S$20.90 and Oversea-Chinese Banking Corp down 35 cents at S$8.35.

Property stocks were also weaker, with CapitaLand falling 35 cents to S$6.90, Keppel Land down 20 cents at S$7.90, and City Developments skidding 50 cents to S$14.10.

Singapore Telecom fell four cents to S$3.46 as investors continued to ignore its forecast-beating first-quarter results released on Tuesday.

Singapore Airlines fell 60 cents to S$17.60 and conglomerate Keppel Corp
pulled back 60 cents to S$12.00. - AFP/ir

Source.

Value investors are loving this short period of declining market to DCA into their targeted stocks which will hopefully fall to their target buy-in price. As for me, I have also targeted a few good fundamental stocks, unfortunately it has yet to reach my buy-in price yet. I have also been aiming some stocks using technical analysis approach. Mostly are oversold, however few are accumulating at uptrend. I shall wait.

For potential buyers in the next few days/weeks, I strongly suggest that you would approach with DCA strategy to take advantage of the volatility of market these few weeks.

Happy investing :)