8 Glove Stocks & 6 Sectors Profit in COVID-19 (易如反掌)

Posted on June 1, 2020 Written by
Crisis glove stocks Top Glove Hartalega Kossan Supermax Riverstone Covid-19

In this article, you will learn 8 glove manufacturer stocks in Singapore and Malaysia and 6 other sectors which could profit from Covid-19 crisis, each requiring unique stock strategies for investing or trading.

1) Top Glove (SGX: BVA) / (Bursa: 7113) – Singapore / Malaysia Giant Glove Stock

2) Hartalega (Bursa: 5168) – Malaysia Giant Glove Stock

3) Kossan (Bursa: 7153) – Malaysia Giant Glove Stock

4) SuperMax (Bursa: 7106) – Malaysia Giant Glove Stock

5) Riverstone (SGX: AP4) – Singapore Giant Glove Stock

6) Comfort Gloves (Bursa: 2127) – Malaysia Glove Stock

7) Careplus (Bursa: 0163) – Malaysia Glove Stock

8) Rubberex (Bursa: 7803) – Malaysia Glove Stock

Crisis is opportunity for stock investing, especially true for glove manufacturers during Covid-19 crisis as demand for gloves are surging. In the past 1 decade, glove stocks are in the best time of era, strong growing business supported by 4 main factors:

1) Growing economy – higher manufacturing needs, especially glove is consumable (cheap but frequently used / replaced), recurring income.

2) Pandemic – higher healthcare needs, including Covid-19, H1N1 and other virus outbreaks.

3) Lower cost – especially for latex glove as rubber price has been low optimism due to bearish global commodity market. Thailand and Malaysia are rubber main producers, supplying to factories of these glove manufacturers within the same countries, saving more cost.

4) Stronger USD – forex becomes advantage for glove manufacturers as local expenses are mostly paid in ringgit but customers are based from overseas (world), therefore collecting payment (incomes) in USD which is stronger relative to ringgit. Of course, this advantage may become a weakness in future when USD becomes weaker.

Fundamentally, Covid-19 crisis helps to improve the business of these glove stocks, Q1/2020 financial results are even stronger than previous year. A strong fundamental business when encounter high demand due to market greed (which may be due to fear), the share price could be speculated higher.

Strong Fundamental + Market Greed = Positive Speculation

[Higher Sales + Stronger (USD/MYR) – Lower Cost] + Higher Greed (Pandemic Fear) = Higher Share Price

Indeed, all of these 8 glove stocks have surged more than 2 times in share prices over the past few months of Covid-19 pandemic. However, the current prices are at high optimism, mainly suitable for very short term momentum trading (Buy High Sell Higher). 

Top Glove (listed in both Singapore and Malaysia), Hartalega, Kossan and SuperMax are considered the Big Four of glove manufacturers in Malaysia, all are giant stocks (based on Dr Tee criteria), will be discussed in further.  Riverstone is a smaller player (listed in Singapore) but having strong business fundamental, will have more comments as well later. As for other 3 glove stocks (Comfort Gloves, Careplus, Rubberex) which are smaller in size, only have stronger business over the past 5 years (likely due to leftover demand, competing with lower prices or niche market), mainly suitable for short term trading, not a giant stock.

So, we will elaborate here mainly on 5 giant glove stocks (Top Glove, Hartalega, Kossan, SuperMax, Riverstone) which may be considered for both longer term investing (when correcting below a fair price with holding power) and short term trading (following S.E.T. trading rule – Stop Loss / Entry / Target Prices).

1) Top Glove (SGX: BVA) / (Bursa: 7113) – Singapore / Malaysia Giant Glove Stock

Top Glove is the world’s largest rubber glove manufacturer with many types of latex and nitrile gloves from manufacturing facilities in Malaysia, Thailand and China. Founder and major shareholder is Lim Wee Chai (27% ownership), also the No 14 richest person in Malaysia (Forbes’ List), supported mainly by rising share prices over the 2 past decades (share price goes up over 500 times since IPO till now). Top Glove has become 1 of 30 KLCI component stock, showing its business strength.

Top Glove has dual listing in Malaysia Bursa (longer history) and Singapore SGX. The relative stock performance are aligned but due to different group of investors, short term share price in SGX (BVA) is even more bullish than in Bursa (7113). Fundamentally, each share (SGX or Bursa) is the same but short term share price may not be due to difference of forex (SGD/MYR) alone.

Top Glove is a strong growth stock (supported by growing businesses with strong cash flow) but highly leveraged (high debt) to expand its capability further, strengthening its position as world’s largest glove manufacturer. Scale of economy is also a form of economic moat, position as bigger player could help to lower down the unit cost, therefore increase the profit margin.

Due to high optimism in share price, Top Glove may be considered as a mid-fielder stock (aiming for high capital gains with little dividend yield as bonus). It may also be considered for very short term momentum trading despite share price is speculated (Buy High Sell Higher strategy).

2) Hartalega (Bursa: 5168) – Malaysia Giant Glove Stock

Hartalega is the world’s largest nitrile glove manufacturer. Founder and major shareholder is Kuan Kam Hon (about 50% ownership with family), also the No 9 richest person in Malaysia (Forbes’ List), supported mainly by rising share prices over the past decade (share price goes up nearly 100 times since IPO till now). Hartalega has become 1 of 30 KLCI component stock, showing its business strength.

Hartalega main product of nitrile glove has higher profit margin compared to latex (rubber) glove. However, this profitable product segment also attracts many competitors, therefore the high growth of Hartalega is getting slower, now is more aligned (sustainable rate) with other major competitors, sharing the big pie of glove industries.

Hartalega is a strong growth stock (supported by growing businesses with strong cash flow) with lower debt level (having potential to expand further with more leveraging if needed). Scale of economy is also a form of economic moat, position as bigger player (nitrile glove) could help to lower down the unit cost, therefore increase the profit margin.

Due to high optimism in share price, Hartalega may be considered as a mid-fielder stock (aiming for high capital gains with little dividend yield as bonus). It may also be considered for very short term momentum trading despite share price is speculated (Buy High Sell Higher strategy).

3) Kossan (Bursa: 7153) – Malaysia Giant Glove Stock

Kossan is the world’s second largest glove manufacturer (technical rubber products, medical gloves, cleanroom products, etc). Founder and major shareholder is Lim Kuang Sia (about 50% ownership), was in 2017 Forbes’ List for Malaysia No 30 richest person, supported mainly by rising share prices over the past 2 decades (share price goes up about 60 times since IPO till now).

Kossan is a strong growth stock (supported by growing businesses with strong cash flow), performance is comparable with the main competitor, Top Glove. Kossan has moderate debt level, having potential to expand further with more leveraging if needed. The glove industry is big enough for major players to share the big global pie of growing demand for gloves in manufacturing and healthcare sectors.

Due to moderate high optimism in share price (compared to other 4 giant glove stocks at high optimism), Kossan has more upside potential, may be considered as a mid-fielder stock (aiming for high capital gains). It may also be considered for very short term momentum trading despite share price is speculated (Buy High Sell Higher strategy).

4) SuperMax (Bursa: 7106) – Malaysia Giant Glove Stock

SuperMax is a leading medical / latex gloves manufacturer. Founder and major shareholder is Thai Kim Sim (about 40% ownership together with wife) who was charged with insider trading in Year 2017. However, this negative news does not stop investors from supporting SuperMax, share price goes up about 60 times over the past 2 decades. During Covid-19 pandemic, SuperMax share price is the most bullish among 5 giant stocks, surging over 5 times in a few months time.

Among 5 giant glove stocks, SuperMax has relatively weaker business (but still a giant stock), earning has been declining despite growing revenue, indicating weaker profit margin which is not comparable with other competitors. Due to very high optimism in share price, SuperMax is more speculative in short term. For longer term investing, other 4 giant stocks are relatively safer for consideration. 

5) Riverstone (SGX: AP4) – Singapore Giant Glove Stock

Among 5 giant glove stocks, Riverstone is the smallest player but it has its niche market. Riverstone manufactures cleanroom glove (eg. hard disk drive and semiconductor) and healthcare gloves. Founder and major shareholder is Wong Teek Son (about 50% ownership), also the No 44 richest person in Malaysia (Forbes’ List), supported mainly by rising share prices over the past decade (share price goes up nearly 20 times since IPO till now).

Riverstone is a Malaysia company but stock is listed in Singapore, therefore the share price potential is also partially affected by Singapore stock market. Choice of stock exchange for listing does not affect the company fundamental (same share ownership) but due to different characteristic of global investors in each stock exchange (eg. US, Hong Kong, Singapore, Malaysia), etc, would make a big difference in share prices which is the ultimate goal for a company to be listed.  As a result, certain stock exchange is more popular of IPO stocks but may not be fundamentally strong.  So, a stock investor has to consider a stock or even stock exchange, aligning with own personality and strategy, either on long term investing or short term trading.

Riverstone is a strong growth stock (supported by growing businesses with strong cash flow), a small player with potential to expand further with more leveraging if needed (current debt level is very low). A giant stock is not determined by its business size, if Riverstone could remain highly profitable within its niche market (also a form of economic moat), it can be a good stock investment.

Due to high optimism in share price, Riverstone may be considered as a mid-fielder stock (aiming for high capital gains with little dividend yield as bonus). It may also be considered for very short term momentum trading despite share price is speculated (Buy High Sell Higher strategy).

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Top Glove and Riverstone are not 30 STI index component stocks but they are much stronger than most of these blue chip stocks in Singapore (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Some investors may be envy of owners of these 5 giant stocks which most founders are Top 50 richest persons in Malaysia. In fact, the easiest way to get very rich may not be through a business. Rather, it is through stock market with a growing business to support the rising share prices which could be over 10-100 times in wealth after IPO (易如反掌). This is the reason why for successful businesses, most of the founders plan to list the stock at certain point of time.

Since all 5 glove giant stocks are mostly controlled (over 50% shares ownership) by founders and families, a key consideration for long term investing is on succession plan to either second generation or capable professionals. A smart retail stock investor has to review a giant stock yearly or even quarterly to ensure it is still a giant stock before continuing the long term support. A sector may not be bullish all the time, including glove industry as profitable business usually would attract many potential competitors which would reduce the profit margins with lower price, lower sales or higher cost.

Here is a list of 30 Malaysia Bursa KLCI Index component stocks which may be considered (investor has to focus only on giant stocks for investing):
CIMB (Bursa: 1023) CIMB GROUP HOLDINGS BERHAD, DIALOG (Bursa: 7277) DIALOG GROUP BERHAD, DIGI (Bursa: 6947) DIGI.COM BERHAD, GENM (Bursa: 4715) GENTING MALAYSIA BERHAD, GENTING (Bursa: 3182) GENTING BERHAD, HAPSENG (Bursa: 3034) HAP SENG CONSOLIDATED BERHAD, HARTA (Bursa: 5168) HARTALEGA HOLDINGS BERHAD, HLBANK (Bursa: 5819) HONG LEONG BANK BERHAD, HLFG (Bursa: 1082) HONG LEONG FINANCIAL GROUP BERHAD, IHH (Bursa: 5225) IHH HEALTHCARE BERHAD, IOICORP (1961) IOI CORPORATION BERHAD, KLCC (Bursa: 5235SS) KLCC PROPERTY HOLDINGS BERHAD, KLK (Bursa: 2445) KUALA LUMPUR KEPONG BERHAD, MAXIS (Bursa: 6012) MAXIS BERHAD, MAYBANK (Bursa: 1155) MALAYAN BANKING BERHAD, MISC (Bursa: 3816) MISC BERHAD, NESTLE (Bursa: 4707) NESTLE MALAYSIA BERHAD, PBBANK (Bursa: 1295) PUBLIC BANK BERHAD, PCHEM (Bursa: 5183) PETRONAS CHEMICALS GROUP BERHAD, PETDAG (Bursa: 5681) PETRONAS DAGANGAN BHD, PETGAS (Bursa: 6033) PETRONAS GAS BERHAD, PMETAL (Bursa: 8869) PRESS METAL ALUMINIUM HOLDINGS BERHAD, PPB (Bursa: 4065) PPB GROUP BERHAD, RHBBANK (Bursa: 1066) RHB BANK BERHAD, SIME (Bursa: 4197) SIME DARBY BERHAD, SIMEPLT (Bursa: 5285) SIME DARBY PLANTATION BERHAD, TENAGA (Bursa: 5347) TENAGA NASIONAL BHD, TM (Bursa: 4863) TELEKOM MALAYSIA BERHAD, TOPGLOV (Bursa: 7113) TOP GLOVE CORPORATION BHD.

Covid-19 could be a crisis for most sectors but there are still few sectors could remain profitable or having less impact than overall economy. Besides glove stocks, there are 6 other sectors which may be considered for stock investing during pandemic:

1) Supermarket stocks – eg. Sheng Siong (SGX: OV8), Dairy Farm International (SGX: D01), Wal-Mart (NYSE: WMT), Costco (NASDAQ: COST). etc. NTUC Fairprice is not publicly listed but it has limited private shares for members of NTUC Fairprice, paying about 6% yearly dividend yield. Those supermarket stocks with online business would have more advantages during pandemic.

2) Telco / 5G stocks – eg. Singtel (SGX: Z74), Apple (NASDAQ: AAPL), Xiaomi (HKEx: 1810), AT&T (NYSE: T), Verizon (NYSE: VZ), etc.

3) Semiconductor / Technology stocks – eg. Micro-mechanics (SGX: 5DD), UMS Holdings (SGX: 558), AEM (SGX: AWX), Frencken (SGX: E28), TSMC (NYSE: TSM), Intel (NASDAQ: INTC), AMD (NASDAQ: AMD), Nvidia (NASDAQ: NVDA), Qualcomm (NASDAQ: QCOM), Broadcom (NASDAQ: AVGO), etc.

4) Online / Software stocks – eg. BAT-FAANG stocks: Baidu (NASDAQ: BIDU), Alibaba (NYSE: BABA) / (HKEx: 9988), Tencent (HKEx: 0700), Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), Google / Alphabet (NASDAQ: GOOGL), etc.

5) Healthcare stocks – eg. 3M (NYSE: MMM), Gilead Sciences (NASDAQ: GILD), Raffles Medical Group (SGX: BSL), Q&M Dental Group (SGX: QC7), IHH Healthcare (SGX: Q0F), etc.

6) Stock Index ETF or stocks – eg. stronger defenders of major stock indices (STI, KLCI, DJI, S&P 500, MSCI, etc). STI ETF (SGX: ES3) / (SGX: G3B) or STI index component stocks with stronger businesses: DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Singapore Exchange (SGX: S68), ST Engineering (SGX: S63), CapitaLand Mall Trust (SGX, C38U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Logistics Trust (SGX: M44U), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), etc.

A stock investor may study Q1-Q2 / 2020 financial reports to compare the global giant stocks relatively to understand impact of Covid-19 for 3 group of stocks during pandemic with 3 unique stock strategies:

1) Profitable stocks – trading at higher prices with momentum trading (similar to glove stocks, Buy High Sell Higher strategy).

2) Defensive stocks – stable business with some price correction, collecting higher dividend yield or gradual growth in share prices (Buy Low and Hold strategy).

3) Crisis stocks – business disrupted by Covid-19 but no major risk (eg. bankruptcy), buying at low optimism price with cyclic investing or trading (Buy Low Sell High strategy).

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

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5 Global Stock Exchanges Stocks (独占鳌头)

Posted on May 22, 2020 Written by
Singapore Exchange Stock HKEx ICE NASDAQ Bursa Malaysia

In this article, you will learn 5 global stock exchanges which are also giant stocks in respective countries with applications of 5 unique stock investing strategies.

1) Singapore Exchange (SGX: S68) – Singapore Stock Exchange Giant Stock

2) Intercontinental Exchange (NYSE: ICE) – US NYSE Stock Exchange Giant Stock

3) Nasdaq Inc (NASDAQ: NDAQ) – US NASDAQ Stock Exchange Giant Stock

4) Hong Kong Exchanges and Clearing (HKEx: 388) – Hong Kong Stock Exchange Giant Stock

5) Bursa Malaysia (Bursa: 1818) – Malaysia Stock Exchange Giant Stock

All stock trading activities (buy or sell) have to go through stock exchange, sometimes there is only 1 stock exchange, especially for smaller country such as Singapore, therefore having monopoly advantage (独占鳌头) as an economic moat for the stock exchange business. There is also low risk for a stock exchange to go bankrupt as it is too important to fail without support. Therefore, stock of a stock exchange in a country with growing economy may be considered for longer term investing.  However, stock performance of each stock exchange can be different, therefore requiring different strategies, eg. growth, cyclic, dividend, momentum, etc.

Business of stock exchanges are not limited to listing and trading of stocks (equities), may be extended to derivatives (eg. commodities / forex / indices – futures, options, etc), ETFs, bonds (fixed income) and other services.  Even a country (eg. US) may have a few stock exchanges but most global stocks only have 1 primary stock exchange for listing (eg. choosing between NYSE or NASDAQ stock exchanges), therefore it is still monopoly in nature (similar to certain show is only available in certain TV channel, no other choice for consumers).

Here, we will focus on 5 common global and local stock exchanges, ranked by market capitalization: No 1 (NYSE / ICE), No 2 (NASDAQ), No 6 (HKEx), No 21 (SGX) and No 25 (Bursa). US NYSE and NASDAQ alone, have already contributed to about 50% of the world stock value, usually are the first choice for global investors and institution in trading, as well as top 2 choices for potential IPO companies, having easy access to global capital to expand the businesses.

Singapore only contributes to about 1% of world stock value.  Therefore, Singapore stocks could not affect the US, but US stocks could affect Singapore and the whole world. So, even readers may be interested in 100% Singapore stocks, it is important to pay attention to US stocks and also US economy (also contributing to half of world economy).  Hong Kong & China (Shanghai and Shenzhen Stock Exchanges) contribute to about 10% of world stock value, not comparable with size of China as No 2 world economy.

Stock exchanges when listed as stocks, price movement is aligned with local economy and stock market index performance.  However, stock exchanges could make money in both bullish and bearish stock market as its business in equity is dependent on trading volume, not high or low of stock prices. Therefore, in recent global stock crisis with fear of Covid-19, trading volume surges to a high (initiated by fearful sellers who hope to sell stocks to minimize downside risk), contributing to strong earnings to exchanges stocks, even during pandemic period of Q1 2020.

1) Singapore Exchange (SGX: S68) – Singapore Stock Exchange Giant Stock

Singapore Exchange was formed in Year 1999 with merging of Stock Exchange of Singapore (SES), Singapore International Monetary Exchange (SIMEX) and Securities Clearing and Computer Services Pte Ltd (SCCS). Since listed in Year 2000, Singapore Exchange has initiated a series of expansion with acquisition, including Singapore Commodity Exchange (futures) and Baltic Exchange (freight indices). Temasek is the largest shareholder (23.3%) of Singapore Exchange, providing additional protection as a strong sponsor.  Japan Exchange is the second largest shareholder (3.4%) but investing Singapore Exchange with high share prices in bullish Year 2007.

Singapore Exchange reports improving business results over the past few years (under new CEO, Loh Boon Chye, since Year 2015), supporting its share prices to a new high over the past 10 years. Main earnings contributor is derivatives trading (eg. futures of commodity / forex / indices) which is about half of company net income, following by about 1/3 from equities (stocks), remaining are fixed income (eg. bonds) and other services. In addition, there are increasing customers outside Singapore / Asia, contributing to growing revenue, despite Singapore stock market may not be so active. There are about 800 stocks listed in SGX, an important source of income for Singapore Exchange through stock trading and clearing fees.

Singapore Exchange is the only stock in 30 STI component stocks not affected by recent global stock crisis with Covid-19. In fact, its current share price is even higher than before Covid-19, exceeding $10/share resistance before. Singapore Exchange is a strong fundamental stock with over 30% ROE over the past decade (no debt most of the time), setting a good example to share over 80% net income as dividend with shareholders (average about 3% dividend yield). It can be positioned as a “fixed deposit” stock (with 3% interest) as share prices have been within low optimism of $6-$8/share most of the time in the past decade.

With breakout of $8/share resistance over the past 1 year, Singapore Exchange has become a momentum stock for trading in short term to medium term. Breaking of each resistance (eg. $10/share, $11, etc) would become a signal for short term traders to Buy High Sell Higher (which requires strict S.E.T. trading plan: Stop Loss / Entry / Target Prices). Singapore Exchange stock price is not aligned to STI index, diverging in short term, mainly due to different business performance during pandemic.  Some Singapore investors like to trade “safer” stocks with business supported by Covid-19, including trading business of SGX, some healthcare and supermarket stocks (eg. Sheng Siong, SGX: OV8), etc.

2) Intercontinental Exchange (NYSE: ICE) – US NYSE Stock Exchange Giant Stock

Intercontinental Exchange (ICE) has 12 global exchanges, including New York Stock Exchange (NYSE), the largest stock exchange in the world which has about 2800 stocks listed, many are big companies with global giant stocks could be found. Performance of ICE stock price is much better than US stock market index (eg. S&P 500), mainly contributed by its strong business growth with acquisition of other global and local exchanges.

Dr Tee has been to NYSE (11 Wall Street) stock exchange in New York, twice over the past 3 decades. The famous Charging Bull sculpture is nearby, remembering the 1987 Black Monday stock crisis.  Indeed, human has proven that every global financial crisis could be overcome eventually, including the current Covid-19 crisis. Even the trading floor of NYSE was closed for a period of time during pandemic but modern online trading has overcome this weakness easily.

ICE is strong in earnings and cash flow with consistent growth over the decade, suitable to position for growth investing, leveraging on long term growth of US / world economy.  Covid-19 induced global stock crisis has corrected ICE share price by 1/3 but it has been recovering well, aligning to US stock market. ICE could be an alternative investment to US indices (eg. S&P 500 or NASDAQ) as its performance in shorter term is similar but much better in longer term.

3) Nasdaq Inc (NASDAQ: NDAQ) – US NASDAQ Stock Exchange Giant Stock

Nasdaq stock (NDAQ) has 9 global exchanges, including NASDAQ stock exchange in US and 8 other exchanges in Europe (major shareholder of NASDAQ is Swedish Wallenberg family through Investor AB). NASDAQ is the second largest stock exchange in the world which has about 3300 stocks listed, many are technology companies with global giant stocks could be found. Performance of NASDAQ stock (NDAQ) price is aligned with US stock market index (eg. S&P 500 & NASDAQ), having strong business fundamental but at the prices of relatively higher liability.

NDAQ stock is highly cyclic in prices, aligning with volatile prices of technology sector stocks within NASDAQ stock exchange.  After the burst of technology bubble in Year 2000, NASDAQ stock index dropped to 1/3 of value and NDAQ stock was cut by half in share prices.  Covid-19 induced global stock crisis has corrected NDAQ share price by about 40% but it has been recovering well, aligning to US stock market. NDAQ stock could be an alternative investment to NASDAQ stock index as its long term growth performance is stronger and less volatile than index.

4) Hong Kong Exchanges and Clearing (HKEx: 388) – Hong Kong Stock Exchange Giant Stock

History of Hong Kong stock market is longer than 100 years. So, Hong Kong stock exchange is more mature and closely regulated than younger stock exchanges of Shanghai and Shenzhen in China.  It has experienced British administration (100 years before Year 1997 when returning to China), therefore there is strong western styles in financial system.  Despite Shanghai has emerged has new financial center for China, Hong Kong is always the main financial gateway to the western world, especially through the Hong Kong Stock Exchange.

Hong Kong Exchanges and Clearing (HKEx) is a strong growth stock, share price over the past 2 decades has surged by 27 times from $10 to $270/share, partly due to historical opportunity of Hong Kong united with growing China after Year 1997, as well as connection of HKEx with Shanghai and Shenzhen stock exchanges, allowing capital to flow between Hong Kong and mainland China.  So, HKEx has become the first choice of stock exchange for IPO for some Asian companies who could easily leverage on capital from China and US investors, if not considering NYSE or NASDAQ stock exchanges.

A few years ago, Dr Tee has visited the building of Hong Kong Stock Exchange at The Exchange Square (building is owned by a property giant stock, Hongkong Land, listed in SGX: H78). However, most of the trading are done online, therefore the physical trading floor is closed permanently since Year 2017, the current Covid-19 crisis does not affect the electronic transaction.  In fact, Singapore and global investors could invest in Hong Kong stocks easily with pressing of a few buttons in online trading.  There is no withholding tax for dividends of Hong Kong stocks (unlike US stocks require 30% withholding tax for dividends to foreign investors). So, HKEx could gain from both global and local stock investors.

HKEx stock is still strong growth in business but the growth in share prices is slower, therefore entering low optimism in long term. Similar to SGX stock in the past decade (ranging between $6-$8/share for cyclic trading), HKEx stock is still suitable for medium term cyclic trading to Buy Low Sell High every few years, following medium term optimism strategy. Performance of HKEx stock is aligned with Hang Seng stock index in short term but performing much better in longer term.

5) Bursa Malaysia (Bursa: 1818) – Malaysia Stock Exchange Giant Stock

Bursa is Malaysia stock exchange has about 800 stocks listed, many are local companies with businesses in Malaysia. Therefore, there are many local stocks in sectors such as agriculture, plantation and manufacturing.  So, a stock with such business may not do well in Singapore (due to higher cost of business operation) but could become a giant stock in Malaysia due to unique local advantage.  So, the choice of giant stocks in each stock exchange is different, promising sectors could be country dependent.

Bursa stock (1818) is more cyclic in nature (suitable with Buy Low Sell High, applying long term optimism strategy), falling by nearly half (relative to peak price) in recent Covid-19 global stock crisis, just recovering from long term low optimism.  Bursa stock performance is much stronger than KLCI stock index, recovering to price before Covid-19. Fundamentally, Bursa stock is stagnant in business growth, therefore may not be suitable for long term investing. However, there are many other giant stocks within Bursa stock exchange worth consideration for long term.

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There are 30 STI index component stocks including Singapore Exchange (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Stock exchange is a gateway for businesses to leverage on enormous capital from local and global investors through stock trading and investing.  Stock performance of a stock exchange is also a reflection of a country stock market strength and economy growth, especially over a longer term. A smart investor may consider to invest in stock exchange stock directly (usually lower risk due to its unique financial role, especially if it is a monopoly stock) or having the choice to invest in individual giant stocks listed under the stock exchange.

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

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Filed Under: Fundamental Analysis, Market Cycle Investing, Stock Market, Technical Analysis Tagged: , , , , , , , , ,