Epiphany, also known as Three King’s Day, is a Christian holiday that celebrates the revelation of baby Jesus to the world. Celebrated on Jan 6, the 12th day after Christmas marks the end of the season and taking down the Christmas tree. Orthodox Christians in Europe celebrate with different traditions, including blessing themselves and their homes with holy water and special pastries. The Spanish parades feature floats with people dressed as the biblical kings or magi who visited the baby Jesus. In Bulgaria, some people jump into lakes and rivers to retrieve crucifixes thrown into the water.
Eastern Orthodox Christians (including those in Russia) celebrate Theophany on Jan 19 since their Christmas Eve falls on Jan 6. By coincidence, this day carries a certain significance in US politics: Jan 6 was the date of the 2021 Capitol insurrection, whose perpetrators President Re-Elect Donald Trump has said he will pardon. This may happen right after or on Jan 20, the date of his inauguration.
As the seasonal song goes:
On the twelfth day of Christmas,
my true love gave to me
Twelve drummers drumming,
Readers who follow this column may know I made 12 trips this year, starting with Bali in January and finishing in Taiwan in December. Along the way we made new friends in Spain, concluded that Thailand and Korea were not investable yet and re-validated our Japanese 2023 dark horse bet with three visits in May, September and November.
With at least Eleven pipers piping, just about every other Facebook friend I have has been in Japan this year to ski in Hokkaido as they capitalise on the weak yen. An almost 18% rise in the Nikkei 225 has offset its currency weakness, which is once again coming back a tad. Next year, I will happily buy the Japanese ETFs on dips, as yen strengthening could be on the cards to buffer any turbulence.
Europe continues to be challenged, with the only growth engines of Spain (whose GDP growth matches US dynamism), Poland and Ireland — the smaller periphery where Ten lords a-leaping — doing well. Europe has to grapple with an Eastern problem. Syrian refugees may go back with the fall of Assad, but the cost of propping up President Volodymyr Zelenskyy or the alternative of carving up Ukraine will weigh heavily.
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It has been a year of Nine ladies dancing, with governments changing almost every month — even in the same country. The French managed to hold it together for the Olympics and completed the restoration of Notre Dame. Still, it has joined Germany in suffering from multiple rounds of government changes — a decidedly Italian tradition. My European exposure through Cromwell European REIT and IREIT Global are at least paying decent dividends. As European rates continue to ease, I continue to hope that their heavily discounted NAV to share prices, which started recovering in 4Q2024, may continue to do so in the new year.
I made two trips to Thailand, whose economy has meandered along, thanks to support from tourists. Singapore-listed Thai Beverage (ThaiBev) is a good proxy, as it finished the year closer to 60 cents versus 54 cents at the start, but not before changing hands at as low as 44 cents in the middle of the year. Perhaps the long-awaited IPO of its beer business will finally take place next year to bring investors some regional consumer joy. Another potential is Indonesia’s Japfa , whose Eight maids a-milkingregional recovery has started to come about, including a partial equal access offer that allows long-suffering shareholders to at least get some liquidity. While its stock had almost doubled to 40 cents this year, it is still a steal for many at just 8 times P/E.
Having not ventured further west across the Atlantic from Spain, I have completely missed the Magnificent Seven swans a-swimming this year. We finished December only with some momentary turbulence. Nvidia Corp remains a market darling, but it was down by a third at one point when the unwinding of the carry trade sent the Vix volatility index spiking to 60, indicating extreme fear.
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With Trump’s win, the market was able to find its feet. The US election prediction markets, which proved more accurate than the polls, were a jackpot for risk-on bets, especially Tesla, which was the laggard stock until November but ended this year at record levels.
Elon Musk, Silicon Valley venture capitalists and crypto bros are grinning from ear to ear as they hope what Six geese a-laying. Ranging from tax reductions to massive deregulation, these will be the gift that keeps on giving next year as the US markets end at new highs. I worry when everyone is so convinced of one direction and outcome and will, therefore, still stay away from these parties.
I don’t suffer from Fomo from the record rally in the US stock market, but I kick myself for making a call that I didn’t follow through on. If I had allocated 10% of my investable funds in CPF into the SPDR Gold ETF traded on the Singapore Exchange (SGX) at the start of the year, the Five golden rings would have yielded a gain of 28% this year alone.
I expected the US dollar to fall, but it did not, and the rate versus the Singdollar was held within a steady range. Trump talks about a strong dollar, but he needs the dollar to fall to level up his deficit issues and generally likes lower rates. With the focus now on digital gold in the form of Bitcoin, which has reached the US$100,000 ($134,000) moonshot price, the real metals allure is less attractive for both investing and speculation next year.
Still, some of our Four calling birds did sing the right tune. Despite having another fabulous time in Korea which I love to visit in October, the conclusion was it was not investable. I remember watching on my flight back the award-winning blockbuster Korean film 12.12: The Day, which was about the events on the day Chun Doo-hwan, the Korean dictator, took power. The plot almost played out in real life when President Yoon Suk Yeol declared martial law. Fortunately, the move was overturned quickly by its parliament and people and Yoon was impeached on Dec 14. The left-wing parties may be in the ascendant, but the Kospi and the won, like its industry in white goods and cars, will likely trail its competitors in Japan and Taiwan.
Our local REITs, which appeared to suffer deaths by thousand cuts, hit a three-year bottom in the summer selloff. However, with prospects of rate cuts in September, they staged a 15% rally that has proven premature and has since fizzled out after the Trump trade came roaring from November. The REITs did not fall back quite as much as the Chinese markets in early October, which was spectacular both on its way up (when I sold and finally got out) and on its way down.
As a number of REITs revisited the summer lows, I started to buy more in December, as there are signs that the physical markets are clearing, especially in Singapore. Landmark transactions have been made in the private market in the commercial, logistics and industrial sectors, and hospitality sectors have bounced back as rate expectations next year ease.
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Even with rate cuts not taking place quickly, several REITs, including AIMS APAC REIT and Paragon REIT, have recently been able to sell assets higher than the values in their books. Gordon and Celine Tang have made an outrageously cheap conditional offer for Suntec REIT after they bought a block of 75 million units, which put their stake above 30%. They clearly think at just over 50% of its net asset value (NAV), it is a price hard to resist. Suntec REIT is not alone. Many REITs, including local commercial ones like Keppel REIT, Lendlease Global Commercial REIT and OUE REIT , are trading at between 45% and 60% of their respective NAV. Some with exposure in China, such as blue-chip sponsored CapitaLand China Trust , are languishing at similar levels and indicating an 8% yield. UOB Kay Hian recently suggested that Paragon REIT may be ripe for privatisation or be taken over.
I would like to follow where smart money and insiders appear to be buying, such as Tuan Sing Holdings , where the controlling Liems have been actively buying at a level of less than 30% of the company’s net tangible asset (NTA). Like ThaiBev and Frasers Hospitality Trust , perhaps there may be another attempt to take the latter private next year after the first attempt failed in 2022. Some good year-end research may yield more than Three French hens, worth of dividends if M&A eventually manifests.
Our most exotic trip this year was to Uzbekistan. The country is in the midst of an economic revival with 30% of the population under 15 years of age and a rich agriculture sector that feeds both Russia and China.
With Two turtle doves of peace starting to rekindle the old Silk Road, both Chrysler and BYD have set up automobile and EV production plants. However, I haven’t quite found the right ETF to invest there.
This year, I have dabbled in several private investments, such as fractionalised real estate and private credit. I have also somehow wandered into a minority stake in a well-known restaurant near my home, where the chef is good at what he does. Together with a friend who is with Singapore’s largest hedge fund and another who works in a Japanese bank, we decided to help keep this great 10-year-old restaurant in business as the F&B industry in Singapore hits a three-year low. Hopefully, we won’t lose our shirts or our pants in this venture. Thus far, I am mostly just gaining kilos.
In a world where actual wars, trade wars and cyber wars are raging, where we haven’t eradicated food security issues in Southeast Asia and even in well-to-do Singapore, where the risks and burdens of climate change are falling disproportionately on the poor or developing countries to bear, I can only say a prayer these 12 days of Christmas for peace, love and happiness to all in their own way. Hopefully, this season, there will be blessings And a partridge in a pear tree of 18% return for the Straits Times Index this year for all investors!
Chew Sutat retired from Singapore Exchange Stock 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. He serves as chairman of the Community Chest Singapore
