Without access to fertiliser or fuel at reasonable cost, planting — and later, harvesting — in the rice fields of the Mekong and Philippines has slowed down. Without naphtha, a liquid hydrocarbon mixture produced during the refining of crude oil, supply chains and packaging or anything relying on this Heavy Fuel are grinding to halt as the Industrial Disease spreads. Even if the strait is unblocked, it will take months, if not years, to recover some of these mothballed plants, machinery or routes.
Last August, I travelled from Dubai to Bishkek, Kyrgyzstan. It took us 15 mins to fly from the tip of the Omani Musandam north to Bandar Abbas in Iran and I recall thinking: wow, how short a distance this was.
Donald Trump, after declaring that he has won at least nine times, has seemingly lost interest in re-opening the strait, as he chucked the job to the rest of the world which he said depends on it. Meanwhile, the price is being paid by the Maga Republican faithfuls, who are also suffering from ratcheting gasoline bills.
Taco Trump seems happy after all to keep his rolling ceasefire ongoing to keep the US market humming, preferably on Tuesdays or Thursdays, interspersed with threats to wipe out an entire civilisation on the weekends. As we grind Down to the Waterline in hopes for peace, this may yet be postponed with the Xi-Trump summit now set for mid-May. Or it may be like Calling Elvis — a bit of wishful thinking that the world of pre-Feb 28 before Trump’s Middle East adventure, allegedly instigated by the Israelis, is going to just flip right back.
See also: Stocks steady on earnings boost as oil erases jump
Once Upon a Time in the West
With a double-digit gain of 15% in April, the Nasdaq, fuelled by AI, saw a rebound in Big Tech, notably with Intel Corp — led by NTU alumni Tan Lip Bu — surging past its dotcom-era high. It is a remarkable achievement, given that just a year ago, Trump, alleging China ties, had labelled him “highly conflicted” and called for his immediate resignation. Within months, the US government took a 10% equity stake in the company.
Despite the heavy consumption of energy On Every Street, investors piling into AI promises of big tech assume that the US as a net energy exporter will be fine with a higher oil price. After all, the US has also recently “acquired” Venezuelan crude after extracting Venezuelan strongman Nicolás Maduro from his palace. The subsequent energy strain, while not yet hurting the US economy much, has already caused Europe’s economy to contract in April.
See also: AI boom drowns out war fears to fuel Asia’s great market divide
In this Wild West End, the S&P’s catch-up vis-a-vis other international markets looks tenacious of late. Inflation expectations have materially shifted, leaving earlier hopes for rate cuts that are now So Far Away. Investors have forgotten the private credit fears that rocked the markets in the first quarter, preferring to buy the dip in hopes that Taco will do well, or that Taco will repeat itself in Iran sooner than later. Or maybe there is hope that with the lawsuit against Fed Chair Jerome Powell dropped, Trump’s nominee Kevin Warsh will pass the senate nomination and go right in to push rates down.
Since last April’s tariff tumble resulted in a huge V-shaped market recovery, short-sellers are nervous. Unlike last April however, this February adventure in the strait has dragged on and could still escalate with a beachhead on Kharg Island or boots on the ground. Indeed, Bank of America has described April’s US market sharp recovery as “bubble-like price action”. If so, it is a matter of time before they head Southbound Again.
Your Latest Trick
That, apparently, was the direction of Trump’s ratings from what he calls “fake polls”. Just as his Maga faithful were starting to speculate if the July 2024 assassination attempt in Butler, Pennsylvania, was a superbly engineered false flag, which flipped the Kamala Haris polling bump when she took over from Joe Biden late in the game, another attempt was made at the White House Correspondents’ Dinner on April 25.
Already, days before the event, there was speculative chatter that Trump would find an excuse to leave early, rather than to stand the thought of being roasted by the typical speeches in the programme. It was, after all, a surprise that he was attending an event that he had boycotted before.
The dinner was then promptly cancelled, and provided a platform for Trump to tout his Golden Ballroom project which, like his signature tariffs, has recently been blocked by the courts. It is not clear, however, that with the weight of the Epstein files and rising gasoline prices, the love affair with his Maga base and Republican partisan congress will end like Romeo and Juliet.
This comes especially as polling is showing now that the US Senate and not just the House of Representatives could change to Democrats in the mid-terms this November, making impeachment of Trump and his cabinet a real possibility. Still, that means at least another half a year of Twisting by the Pool of policy changes on Truth Social.
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Walk Of Life
What, then, does one do on this Ride Across the River halfway around the world in Singapore? Chew On This in Issue 1233 rhetorically asked if it was “Time to Dig In”. Those who did, like me, have been comforted with a Straits Times Index that has not really budged. By staying invested, we have collected a handful of pretty Q1 dividends from REITs and blue chips alike with quarterly payouts.
Energy stock Sembcorp Industries (SGX:U96
) has given investors up to 20% gains from the initial sell-off in March at the start of the war. I caught only a small part of that ride, staying too cautious.
Pun intended, my view of construction stocks has held up well and recovered from March blips. Unlike the pandemic which caused severe disruption and project delays, we are still digging everything from the airport’s Terminal 5 and the Marina Bay Sands’ new tower to the Greater Southern Waterfront and HDB projects. This very domestic sector may continue to withstand the Six Blade Knife that may fall in the West in the second half or the shenanigans in the strait.
Other wins include the Koh Brothers Trio comprising grandparent Koh Brothers Group (SGX:K75) , parent Koh Brothers Eco Engineering (SGX:5HV) and superstar child Oiltek International (SGX:HQU) , whose stock has surged some 3,000% since its March 2022 IPO, lifting the two elder Kohs 70%–100% in the last two months.
New issues and issuance continue to be rewarded. Kin Global, the first to brave the IPO environment in April, popped up 19.6% on its debut and closed at 15.2% higher, after it was four times oversubscribed. It may bode well for other larger upcoming Mainboard IPOs.
Two Young Lovers
Two small cap growth stocks highlighted in Issue 1233 that may be beneficiaries from the current paradigm have done well. Investors who picked up placements of iX Biophama (SGX:42C) — which raised $6.7 million last October at 10 cents and $15 million at 19.8 cents — and held on (sadly, I did not) have been richly rewarded, with the price soaring above 40 cents on hopes related to the US government contracts announced earlier.
Satellite tech firm Addvalue Technologies (SGX:A31) has also seen its stock price multiply several-fold since the start of the year. Economic Development Innovations Singapore (EDIS) recently reduced its stake in Addvalue, selling 55 million shares at 9.4 cents and realising a gain of $5.17 million. It had just in January converted $2.1 million of bonds into Addvalue shares at 1.7 cents. It is sitting pretty with just under 5% of Addvalue shares for a tidy paper profit as the rest of its shares continue to rise, with a bullish target price of 31 cents touted by Maybank Securities after Addvalue is a step closer to a Nasdaq spin-off.
EDIS then did another convertible bond deal with marine engineering firm Mencast Holdings (SGX:5NF) . The conversion price of 14 cents is a 84% premium to Mencast’s VWAP of 7.6 cents on April 15. The EDIS investment “at a clear inflection point” expects Mencast to “be repositioned into higher value, digitally enabled manufacturing”. Its business of building propellers that will be more fuel efficient appears timely in light of the ongoing energy crisis. The stock has since started to head toward the conversion price; I joined in after the deal was announced.
Would the Midas touch of EDIS also apply to MetaOptics (SGX:9MT) , another listed investee company which designs and manufactures advanced glass-based meta-lenses and AI-driving imaging modules? And has our market in search of growth, having seen AEM Holdings (SGX:AWX) triple this year, CSE Global (SGX:544) triple in the last year and Nanofilm Technologies International (SGX:MZH) and UMS Integrated (SGX:558) close to doubling in similar periods, now gone beyond REITs and property? If so, more recent tech listings which have found some footing including Info-Tech Systems (SGX:ITS) , UltraGreen.ai (SGX:ULG) and Toku (SGX:TKU) may be the next Ticket To Heaven, while I head to Japan to spend some depreciated yen in May.
Chew Sutat retired from Singapore Exchange after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange, and he was awarded FOW’s lifetime achievement award
