The sun came out at that perfect moment, giving us an opportunity to thaw and enjoy the views for the next leg towards the high pass skirting the cliff along the valley. Clear skies, however, evolved into puffy clouds across the opposite end of the valley, which had some snow down to the lower reaches. Soon, chilling rain came back to haunt us, followed by prickling, painful hail as we took smaller and smaller steps with shallower breaths as the clouds descended onto our path and reduced visibility down to as little as 5m ahead.
That’s where what sounded like a small thunderclap turned into a violent roar across the valley, caused by clattering rocks — an avalanche! I was shrouded in the blizzard at 3,900m and did not witness it, but my buddy, further behind and lower down below the cloud cover, did. We both knew we had to get up and off the pass sooner rather than later.
In freezing cold blizzard snow, I could not see the route marker, but I was aware of a mudslide flowing. Unable to descend immediately, I tried to call out to another member of the trek at the lower end of this path to warn that this was coming, but she didn’t turn back. Oblivious but fortunate, she followed a guide to turn down another track. It was close, but after 25m the mudslide stopped at the end.
Trying to figure out how to descend with the trail washed away in minutes before me, and my glove, hat and poles frosting over, I realised that snow was building up on the lower reaches of the pass more quickly. We were prepared for wet and cold, but not frosty conditions.
See also: Riding the S-curve, parsing the S-trades
I made it down tortuously with much challenge. I landed on my butt several times. Halfway down, the snow stopped, and the mountain top started clearing up. Those who crossed 45 minutes ahead of me enjoyed perfect views from high. Those who crossed 45 mins after saw perfect views on the top but had a tougher descent with near-freezing temperatures.
One fell. It was two falls, actually: a shorter one that bruised and battered his head, and the next one took him off some 500m down in a roll. It is a miracle he survived thanks to a series of half-chances. Mountain guides stretchered him down to our base. Bloodied, unconscious and shaking in hypothermic shock, he required four of us to hold him down. An unknown Dutch traveller wrapped him in foil. We layered blankets. A member of our group who just arrived was a nurse. He had a pulse, and we kept telling him to stay with us and called in a helicopter evac from Karakol.
Battered, bruised but not broken, my resilient friend was able to crack bad jokes the following day from a hospital, while asking for Coke and orange juice. He was very, very cold, and falling was the fastest way to descend to get to a less cold place, it seemed. He had a clear photo shot at the pass of Ala Kol. I am relieved he is able to see it in person.
See also: US stocks dip before Trump-Zelenskiy meeting, retail earnings
Mountains and markets
Besides being mostly off the grid for more than a week, I survived flying over Iran from Dubai to Bishkek twice, back and forth. The return flight on the day gave me a perspective of how narrow the Strait of Hormuz is. Within minutes, we crossed the Iranian oil port of Bandar Abbas into the United Arab Emirates. It was good to see oil tankers sailing through that potential choke point, and to read that the Israeli and US bombings just over a month ago of Iran had not resumed.
True, we are far from world peace with the impending recognition of Palestine by France and the UK, and President Donald Trump is deploying nuclear subs over former Russian president Dmitry Medvedev’s disrespectful comments on US pressure to make a deal on Ukraine.
That was part of the thesis of the last two columns (Issue 1197, Scaling the Seven Summits and Issue 1199 Time Out, it’s getting hot in summer) about how it may be better to take a breather as stocks, especially Western ones, are at cloudy valuations.
And even Singapore, as seen by the Straits Times Index (STI), which enjoyed a continuous two-week run while pulling along small and mid-caps, may just take a breather. It is, after all, more sustainable if markets catch a breath and pause than to run ahead and fall harder when valuations try to catch up.
Investors have begun to assume that Aug 1 will have no market impact because of Taco — Trump always chicken out. An emboldened Trump, seeing how markets reached new highs following early April’s Liberation Day tariffs, stuck to most of his guns. The world is now a more inefficient and expensive place to trade and live, and the American consumer will start to feel the pain pass on even whilst Trump declares “we” are taking in billions.
As economic and US jobs data showed a significant slowdown and negative divergence from his view of the truth, Trump has fired the head of the Bureau of Labor Statistics. Is the US going to be heading down the path of China, which routinely stops reporting inconvenient statistics like youth unemployment? If so, perhaps the significant valuation discrepancy between US and Chinese stock market valuations should continue to narrow, as investors, in order to be objective, have to price uncertainty and political risk similarly for both markets.
This constant turbulence, alongside a relatively sanguine US retail investor who is still in (mis)belief that every dip is a buying opportunity, would not hold. Without your poncho, beanie, gloves and thermals when the frost comes, and it could be sudden — a mercurial Trump has threatened to fire the Fed chairman Jerome Powell more than once already, for instance — paper profits could similarly vanish into thin air. Our recent warnings, having been described as party poopers, especially in the local market leading up to National Day, have, however, played out recently.
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Home ground
For some time, Chew on This has been known to the lone wolf, wildly enthusiastic about our local markets, while other Singaporeans grumble about the market and complain to the Singapore Exchange. No, I’ve not lost the plot and abandoned ship just before National Day by selling my STI ETFs and gone on the defensive.
Rather, it was just economically rational after having cheered the market on through the various resistances from 3,000 points and up, and through the various rotation amongst sectors, big, mid and small caps. There is still a lot of value to be found, especially in the mid- and small caps. Thanks to the catalytic effect of the EQDP, or Equity Market Development Programme, institutional, some wealth management and retail money have returned from the US, and some North Asian hedge funds have been dipping their toes in Singapore.
With the Monetary Authority of Singapore-led measures creating some sparks, we should have enough conviction and fortitude for our home market to buy on the dip, as there is a secular trend upwards and valuation rediscovery. We do not need to run for the hills at the first signs of healthy corrections, which have taken 5%-10% off some of the leading mid and small caps prices from the recent rally highs, especially as valuation remains compelling, as are discounts to NAV or peers in other markets.
To buy the dip, however, one needs to sell on the up, even if at risk of missing out on the next 5%-10%. Technically, no one loses money by taking a profit. Like on the mountains, coming back down safely allows one to summit the next peak in better condition. The STI has indeed gone up by around 3% to 4,273 since I sold, but it looks set to ease more with the three banks reporting lower earnings.
Perhaps it will be time to get back in after we celebrate SG60 on Aug 9, as the world of big caps navigates Trumpian policy-induced turbulence and consolidates a tad.
My positioning in REITs has continued to bear fruit even with the recent pullback. With the Fed under more pressure to cut, they continue a secular uptrend. Likewise, small undiscovered gems that went up against the mild market correction, like Soilbuild Construction Group, look set to extend their ground and not just hold it. The likes of Sats and Seatrium are looking more interesting with the pullback, especially if they are the kind of turnaround stories which fit the profile of what Avanda Investment Management, one of the three in the first batch of EQDP fund managers, is looking for.
JP Morgan Asset Management is another of the three. Its strategy for its share of EQDP allocation is “majority Singapore” (versus “entirely” Singapore) is deemed very underwhelming by some folks, who even suggested that the spectre of some “taxpayers” money finding into overseas markets is another reason for the recent pullback.
Back in February, Chew On This first cheered the market review measure. With the $5 billion EQDP, we have crossed the Rubicon. But let’s not mess it up with allocation only to bigger players. Spread it around so there will be more competition and different styles and specialist capability with local knowledge to relight the ecosystem. There are many local managers, the “old warhorses”, who arguably have more vested interest in the long-term success of markets. They have demonstrated that through persistence of support in IPO cornerstones, placements, research coverage, among others, over the years and decades.
It will be critical to get this allocation right, or the recent revival of market activities and valuations will vanish into thin air, not from an external storm, but if the reception from our investors turns frosty. And like my experience on the Ala Kul pass, timing it well and soon is critical.
Happy 60th Birthday, Singapore.
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
