Last year, Sharity also accompanied me to the twin mountain peaks of Mount Fuji (3,776m) and Mount Aka in Nagano, Japan. Later this month, we will also be embarking on a nine-day trek in Kyrgyzstan with a few days in the (3,000m–4,000m) and hope to be back in one piece for National Day! If so, it will be another long-overdue digital detox. However, before I leave, I will mull over how to position my portfolio to share it in the next column.
I am looking forward to some respite from the White House Daily Show.
Twin Peaks
Although I am not a mountaineer, in May 2020, I joined a group of friends, led by professional adventurer Khoo Swee Chiow, for a trek to Everest Base Camp. The group consisted of 50 Singaporeans from financial and professional service firms, as well as mental health charities, all of whom aimed to raise awareness for a common cause. Alas, it was not to be, as Covid derailed our plans. However, it was also Covid that brought many issues of mental wellness out of isolation and reduced some of the stigma associated with it.
Those days following the post-Covid shock marked the beginning of the great speculative bubble of fluff, meme stocks, and Doge altcoins. Legions of US retail investors, such as those on Robinhood, took on short sellers and squeezed out losses from loss-making companies, including GameStop Corp. Any new issue, whether in the metaverse, non-fungible tokens or spacs with nothing in them, was bid up on pure speculative fever.
See also: Goldman strategists raise Asia stock targets, upgrade Hong Kong
The Nasdaq doubled from 8,000 to 16,000 in a double-top in October and November of 2021 before “returning to base camp” a year later, closer to 10,000 points. Bitcoin, which had multiplied 10-fold from the start of the Covid pandemic, also had twin peaks in April and November 2021, reaching above US$60,000. It traded a year later, closer to Camp 1 at US$15,000, during the Crypto Winter of 2022. That all seems so far away in history now.
The rise of the Magnificent Seven and US tech since 2023, driven by the infinite possibilities of artificial intelligence, is perhaps best encapsulated by Nvidia, which, through its ups and downs, looks set to become the world’s first US$4 trillion ($5.1 trillion) market capitalisation company this July. This is despite more than 30% DeepSeek and Liberation Day corrections. Nvidia trades at a P/E ratio closer to triple digits and offers a dividend yield of 0.025%.
The breakout of Nvidia above February’s US$150 almost mirrors Nasdaq’s new high above 20,000 in July, which was February’s previous peak. At nearly 21,000, it will remarkably double the December 2022 base camp of 10,500 points. It is no wonder that “buy the dip” has been the mantra of the US retail investor, if they had the strong stomachs through the gut-wrenching churns.
See also: Japanese, Korean stocks gain after Trump's new tariff deadline
The To The Moon “TTM” believers of Bitcoin, likewise, had seen an almost seven-fold increase since the Crypto Winter. Hoisted up by crypto exchange-traded funds and some alleged institutional buying, it cracked the US$100,000 level, reaching highs of US$111,000 in May, with prices staying above the clouds.
Chew On This has not been a believer and has missed out on these bubbles of fluff. So, it sounds like sour grapes. However, both Bitcoin and the Nasdaq had already experienced 25% corrections this year, only to rally back and reach new twin peaks. Those who follow stories of mountaineering lore know what happens when high-altitude winds and climate conditions change acutely and suddenly. The views always look good from up high, but the descent from double tops is the trickiest, as chartists will also say.
Denali (6,194m)
Mount Denali is the highest peak in North America. It is a coincidence that the S&P’s previous peak in February paused just shy of that at 6,145 points. It has since broken through 6,200 and sets new records by the day in July. Bulls with conviction continue to believe that this 7% year-to-date gain has more legs behind it because US equities have lagged the MSCI World by 11 percentage points.
Coupled with the fact that the US dollar is the worst-performing currency, as evidenced by the DXY USD Index’s decline from 110 to 97, this means that, in real terms, US stocks have a negative return for non-US investors. For investors using Singdollars, the decline from 1.375 to 1.27 erases all US equity index returns for the year.
With Trump’s Big Beautiful Bill (BBB) signed into law on Independence Day, the pressure on the US dollar is only increasing. Studies estimate a trillion-dollar increase in debt ratios, exceeding 120% of GDP. With a debt mountain accumulating, the lack of business confidence, as evidenced by declining capital investment in the US, and increasing pressure to force Fed Chairman Jerome Powell to lower short-term rates, the descent continues.
The US dollar is also artificially overvalued because of its reserve currency status and may slide as central banks diversify or buy insurance. After all, there is a need to hedge the risks of a mercurial US friend, who may, in a fit of fury, impose exit taxes (enshrined in the BBB Act) on top of using trade as a weapon, or cut a country off from the Swift payments system. Already, there are signs of increased holdings of the euro and gold compared to the US dollar or US Treasuries.
Global institutional investors have also been reducing their US equity and fixed income assets and reallocating, which could explain the continued outperformance of global equities this year over those in the US. US equity bulls forget the fact that their relative equity index “underperformance” starts from a high peak of a phenomenal climb since 2023. Suppose the current twin peak double top on US equity indices in July is primarily driven by retail investors’ belief in “buying the dip” and some institutions forced to buy with little conviction. In that case, we may be in for a precarious descent.
Sink your teeth into in-depth insights from our contributors, and dive into financial and economic trends
Elbrus (5,624m)
It is another coincidence that the Euro Stoxx 50 index’s previous peak was 5,200, dating back to 2000 during the dot-com bubble. The slow or no growth in the Eurozone and continental markets has led to vastly underperformance compared to US markets, as European portfolio managers and private banks have gravitated West to markets well-supported by innovation, earnings growth and investors willing to pay higher valuations, often for the same earnings and sectors, for over two decades.
Chew On This had been mildly positive about Europe since last year and its outlook had been increasingly so as Trump’s pressure had forced Europeans to increase their defence spending to 5% of GDP. With the German GDP, the world’s third-largest economy, shifting from a mildly negative to a plus 2% growth rate, and a strengthening Euro, we have already seen revaluations of Singapore-listed IREIT Global and Stoneweg European REIT, which have European assets, this year. Metaphorically, at current levels, the Euro Stoxx index, at 5,288 points, is still somewhat below its peak potential heights.
Everest (8,848m)
Our take in January to buy the dip in Chinese markets but not chase appeared to have played out. A slight dip in the Hang Seng Tech Index in late January before the Lunar New Year saw the index rally by half from 4,200 to 6,000 points, before retreating to base camp during April’s escalating trade war. It remains at 5,200 points, a 20% rise to camp 2, just about half its five-year peak of around 10,000 points, just above Everest. The CSI 300, which more broadly represents China A shares, managed a 4% year-to-date gain, reaching just under 4,000. Valuations in many stocks are half or less of their US counterparts.
During a recent lunch with a US investment bank, it was notable that China and Chinese stocks are no longer considered “uninvestible” for Western, including US, institutional investors. Yes, there is still a political risk premium associated with China, but in the world of Trump, so does the US. Who knows what the following tweet will do to a company, sector or the investment climate?
Chinese companies, which could become global leaders, are trading at a fraction of the valuations of their US counterparts, including EV battery maker Contemporary Amperex Technology Co., BYD, or Xiaomi. Despite the tariff wars, Chinese exports had risen 4.8% in the first half of this year. Recent large-cap initial public offerings (IPOs) in Hong Kong have featured dozens of global fund managers in both the primary and secondary offerings. This trend had been missing for three years, putting Hong Kong on course to lead the IPO league table in 2025.
The successful IPO of Thailand’s coconut water giant IFBH, priced at 28.6 times P/E with a 2,681 times retail oversubscription, followed by a 42% pop on its first day on the HKEX, was a sterling example of the changing climate. Its exposure to China was seen as a boon, emboldening the legions of speculative capital in Hong Kong. The attempt to list in Singapore last year, a more natural home for a Thai company in Southeast Asia at a significantly reduced valuation, did not proceed as no cornerstone investors came on board, as the company’s exposure in China was ironically seen as part of its business at risk.
Kinabalu (4,095m)
This compares with Singapore’s first 2025 Mainboard listing, which already surprised many naysayers. A decent $60 million fundraise by Info-Tech Systems and a 5% post-listing pop were a comforting debut for all involved. Hopefully, the eventual deployment of the $5 billion equity fund will inspire more confidence amongst our investors to support homegrown champions.
The animal spirits are, after all, warming up. Closer to home, the highest mountain in Southeast Asia is within reach of our Straits Times Index, having broken through 4,000 points on its second attempt this year. Like the Europeans, it has been over 25 years since we have seen these levels.
Chew On This was delighted that the expectation that the breakthrough would be led by other STI stocks and laggards, not just the three banks, has played out. I only wish I had practised more of what I preach. Nonetheless, the recent action and volumes building up from a low base in small and mid-caps, even without M&A speculation per se, have been more rewarding as these summits may be easier to scale.
Perhaps our smaller-cap Seven Summits could come from companies emerging with potential for good earnings growth, preferably with low P/E valuations and some cash. My search in July, as promised in the last column, now includes China Sunsine Chemical Holdings, Beng Kuang Marine, Delfi International, Nam Cheong, Pan United Corp, Samudera Shipping and Valuetronics Holdings.
Remember, however, that the route up may not be even, especially if some have already advanced with increasing trekkers on their trails. That said, for a small allocation, sized for the stock and liquidity, any trip and fall is likely to be softer than a hard crash from loftier peaks.
Chew Sutat retired from the 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. He was awarded FOW’s Lifetime Achievement Award. He serves as chairman of the Community Chest Singapore
