Even the resilient Straits Times Index and Singapore market has succumbed to global stock market weakness. Crypto is crushed. USD is king.

Even the resilient Straits Times Index and Singapore market has succumbed to global stock market weakness. Crypto is crushed. USD is king.
Photo by Markus Spiske / Unsplash

I have been pleasantly surprised by the resilience of the Straits Times Index(STI) and the Singapore stock market for most of the past 2 weeks. There were days when the U.S market plunged but STI declined much lesser than expected (usually less than 0.4%). That was unusual strength. Unfortunately, by the end of this week (6 May 2022), STI finally succumbed to global stock market weakness and joined in the decline.

I started getting more aggressive in adding to my Singapore portfolio during the week of 19Mar2022 when STI showed signs of strength. I took some profits off as the market started to weaken this week. Initially, I enjoyed good profits in some palm oil stocks like Bumitama Agri and Golden Agri but Indonesia's ban on palm oil exports caused these stocks to plunge, particularly Bumitama which happened to be my biggest winner among palm oil stocks. The ban caused a substantial portion of the gains to be lost. I generally do not like stocks which are strongly influenced by politicians' unpredictable decisions.

Most of the winners in my portfolio are commodity-based stocks. Another winner was RH Petrogas but it has dropped 28% from its recent peak.

Most stocks in a portfolio will drop when the general market drops. However, there are some stocks which remain resilient and drop lesser than average. These are stocks which I will keep as they will rebound strongly when the market recovers. One of them is Jardine Cycle and Carriage.

Straits Times Index remains among the best performing Asian index in 2022 year-to-date, losing only to Indonesia's Jakarta Composite Index which is boosted by commodity stocks.

Ranking of stock indices (Source)

While STI still remains relatively strong, the stock market internals shows worrying signs of weakness. The market internals for other markets like Hong Kong, U.S, and China look even worse. Nasdaq100 is terrible.

Stock market internals (Source)
Cryptocurrencies crushed

Among the financial markets I monitor, the worst is the crypto market. Cryptocurrencies have been absolutely crushed year-to-date.

Ranking of major cryptocurrencies(Source)

Bitcoin has fallen to a 52-week low. Even the top performer Tron is 34% below the 52-week high.

Anchor has been a favourite crypto protocol among crypto investors because of its high 19.5% yield with UST stablecoin. Almost everyone agrees that the high yield is unsustainable. The high yield is being paid from the Anchor reserves and will last approximately 38 more days. Maybe the reserves will be topped up later. I don't know. I have warned people around me to not put too much of their savings into it for the high yield. Personally, I have taken my funds out of the Luna ecosystem and will stand by as a spectator for the time being.

Crypto market has been highly correlated with the U.S stock market in 2022. In fact, I have come to use the crypto market during the weekend as a leading indicator to guess the performance of the U.S market when it reopens on the following Monday.

Ranking for currencies (Source)

The strong USD is the king among currencies in 2022. Only commodity-based currencies manage to beat USD. The biggest surprise is the Russian Ruble. It is now the world's strongest currency, rising from the ashes a few months ago when it was the world's weakest currency when Russia invaded Ukraine. Probably the best trade of the year would be buying the Russian Ruble when Russia initiated its invasion of Ukraine.

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