The broad market is generally trading without a fixed direction with the Straits Times Index (STI) gyrating in a tight range. There is no special reason for this phenomenon, as I believe that it is typical of a mid-bear phase for the market to be behaving this way.

At this point in time, most retail investors are out of the market while those who are still in the market are institutional players. There players have the power to move the market up and down simply because they need to generate brokerage for the brokers who serve them. These big players pay the brokerages and broking houses who serve them do not suffer as much as other houses who serve retail investors.

The big players have now diverted their attention to the futures market since there is no money to be made in the stock market. With a lot of funds at their disposal, they have the ability to move the futures market in their favour.

SingTel has just offered subscribers with the option of watching television on the mobile phones, which I believe will be a huge success. In Japan, this service is very popular as we can see many commuters on the underground rail with their eyes glued to their mobile phones. Many years ago, Japanese could be seen reading while travelling on public transport but they have now moved on to watching television.

I believe this trend will catch up in Singapore, which is a technologically-advanced country that thrives on new technology breakthroughs. The telecommunications industry needs to provide new services in order to keep growing. Although the 3G network was thought to be a new breakthrough, many people feel that it is redundant and reveals too much of their whereabouts.

Not too long ago, the Singapore Dollar’s continuous appreciation has already hit exports. In fact, it is a bane for most industries. A lot of companies have started investing in China and if the Singapore Dollar rises faster than the Yuan, there will be translation losses. Similarly for companies such as Singapore Airlines, foreign exchange earned from other countries will become lesser in value when translated into Singapore Dollar.

Which companies will benefit from a rising Singapore Dollar?

It is a plus for companies that depend on domestic spending because imports have become cheaper.

Rising oil prices have led to even more exploration activities but companies related to this industry have failed to create new highs. Most of them are, in fact, miles away from the historical high set during last October.

The reason for such a scenario is due to excessive speculation last year. Regardless of which industry the companies are in, rational investors will start to dump shares when they feel that valuations have become too high to be sustained. When the stock market moves into a bear market, investors will stick to price earnings ratio as a yardstick for investment. Valuations were too high last year and it is still not cheap enough to be considered attractive and, thus, investors prefer to stay cash.

Mr. Tan Kim Seng, who used to be the owner of KS Energy, saw that it was time to sell out and chose to sell the company to an Indonesian businessman. He is now sitting on a pile of cash, as cash is king in a bear market.