28/04/2009 Market Update

	Close	Change	Low	High
STI	1,808	-10	1,791	1,827

	Shares	Value
Volume Traded	1.38 billion	$999.17 million

In the end, more bad news did surface. While it is still gripped by the swine flu outbreak, Mexico got hit by an earthquake of magnitude 5.6. It can be said to be a really bad combination: flu pandemic plus earthquake. Then World Health Organization (WHO) increased the alert level for the swine flu from three to four.
At the time the news was released, our broad market took a beating as investors feared that in such a bad case scenario, economy recovery could be derailed. As a result, the financial and property counters took a beating, especially CapitaLand. Interestingly, medical associated counters such as Medtecs and Healthway enjoyed some heavy trading these two days.

Towards closing, the panic eased off and our market pared some losses. I think the current sentiment still weighs more towards caution rather than fear. This is reflected in the low traded volume. Then right after closing, channelnewsasia.com came out with reports that China is investigating several people with suspicious symptoms while there are still no confirmed human cases of swine flu in China as of now. STI is still holding above the 1,800 psychological level.

Some thoughts here:

Firstly, I suspect this swine flu virus can likely affect more areas before being halted. Secondly, from my understanding, it is not as deadly as the SARs virus, at least for now. Furthermore, various governments are more prepared and willing to act quickly to curb a pandemic outspread after the lesson from SARs outbreak. But I think a normal person out there on the street will feel more fearful than usual base on: (1) insufficient knowledge and information on this topic and, (2) all the small talk while interacting with friends/relatives, thus spicing up everything and inducing more fear.
If my thoughts are true, then I think the normal investors out there are likely to portray their overly excessive fears in our market. I guess such fears will push down the market more than it should retrace (base on fundamentals) in the near future, yet I have no idea just how much will be considered too much.

I guess the most important note here for us now is: there will be fear in the market, but we shouldn't fear if we want to reap this opportunity. Take the SARs incident as an example. Stocks recovered after that too. It is just a matter of trying to buy as low as possible. Don't try too hard though for I had already highlighted the consequences of trying too hard to buy at the low – miss the boat. Our next strategic entry levels are still at 1,780 and 1,720.

Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.