Local stocks: Is the glass half full or half empty?

AN optimist would probably view Keppel Corp's surprise buyout offer for Keppel Land (KepLand) as indicating a healthy market for corporate activity and, given the generous 25 per cent premium over the one-month volume-weighted average, a huge boon for KepLand's shareholders. Moreover, the deal has created spillover interest in other property counters, thus helping to keep interest in stocks alive in a market beset by many overseas worries such as a shock Swiss franc appreciation, political turmoil in Greece, a slowing China and persistently weak oil prices.

A pessimist on the other hand, might first point out that according to the Singapore Exchange (SGX) website, there were 33 new entrants last year. As at Friday, these companies had a combined market capitalisation of S$14.6 billion versus KepLand's current S$7 billion, which means that if KepLand is eventually delisted as planned, the local market will lose almost half the market capitalisation it added from 33 new entrants for the whole of 2014.

Second, the pessimist might also highlight the fact that quite regularly, property companies jump into play from the revival of the by-now familiar privatisation theme but this usually does not last for long, interest fizzling out after a few days.