ETF Investing: A Compelling Case for Singapore

SingaporeBy Joshua Schroeder
As the US and Europe continue to struggle with their financial problems I decided to dedicate some time to other regions of the world that may offer relatively safe investments, but also compelling risk reward opportunities.  As a potential addition to my “core” holdings, any possible investment in a region or country would require it to have a stable government, strong GDP growth, sound fiscal policy, and a number of companies or sectors that I believe will continue to power the region forward over the mid to long term.

In my opinion, Singapore certainly has a strong case.  While it is a small country with literally no natural resources, and emerging markets have been volatile of late, it is located in the center of rapidly growing Asia and has developed an economy with excellent companies in the areas of electronics, IT, financial services, pharmaceuticals, and chemicals.  It´s economy grew over 15% last year and according to John Wasik of Reuters, the country is working to establish itself as Southeast Asia´s hub for trading and technology.  Further to this point, Singapore has benefitted immensely from having a strategic port in one of the busiest trade areas of the world.  With high per capita GDP, a skilled workforce, excellent business transparency, and large rapidly growing countries nearby, the future appears to be bright.

So, if everything is on the up and up in Singapore why is the iShares MSCI Singapore Index Fund (EWS), the ETF that seeks to track the Singaporean equity market, down over 20% from its high in 2011?  Well, even “Singapore is not immune to the Eurozone debt crisis and the economy will be feeling the pressure of the latest warning from Standard and Poor’s” claims Tom Lydon of ETF Trends.  Add to that the possibility of a hard landing in China and one can see why it has sold off.  However, Eugene Szeto of HSBC Holdings pointed out on Bloomberg recently that as the growth in the developed world, such as Europe and the U.S., slows, Singapore does have an edge as a source of funding for energy traders and commodity suppliers such as grains, sugar and edible oils.  This could benefit the EWS etf as nearly 50% of the fund is comprised of financial services companies.

As of close of trading on the 12th of January the MSCI Singapore Index Fund was trading at $11.40 with a NAV of $11.32 and a 12 month yield of 4.3%.  Below are daily and weekly technical charts showing support and resistance levels to keep an eye on for the index fund.  Have a great weekend.

 Charts prepared by Andrew Nyquist and Joshua Schroeder.


Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.

No positions in any of the securities mentioned at time of publication.

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Joshua Schroeder

Joshua Schroeder

Joshua Schroeder is an entrepreneur and top performing real estate development professional with broad based experience in mixed use coastal resort communities as well as rural recreational and agricultural properties. His value creation philosophy, based on a strong belief in the importance and interconnectivity of responsible development, quality recreation, healthy ecosystems and sustainable agriculture, has contributed to over $1.2 billion in real estate transactions. Over ten years of international experience in both Europe and Latin America has provided him with broad global perspective, a better understanding of different cultures and a deep intellectual curiosity about how to bring people together and reconcile different perspectives. Joshua has an excellent track record of working with talented entrepreneurs and senior executives to create valuable business opportunities in both real estate and non real estate sectors. At Azul de Cortez, he serves as the Director of Business Strategy and oversees community and product positioning, target market and consumer analysis, marketing and sales planning as well as financial modeling and capitalization strategy. Azul de Cortez is a planned coastal community on the Sea of Cortez in Baja California Sur and a fully owned subsidiary of Isolux Corsan, the largest privately held Spanish engineering and construction company. Joshua is responsible for balancing Azul de Cortez´s diverse and complex strategic challenges that are inherent in a mixed use project with a diverse mix of sustainably planned amenities and residential units. Joshua graduated cum laude from Carleton College with a BA in Economics in 2001 and received his MBA from ESADE Business School in Barcelona in 2007.

  • Steve

    Did you look at hong kong and china markets?

    • Andrew Nyquist

      Yeah, we took a look at this. Search chartology on the site and go back in history. Or you can search hang seng. Nikkei is out there as well.