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New market barometer measures lunch queues
A TEAM of stock traders and local researchers has created an alternate market benchmark based on queues at various eating establishments in the central business district.
The Live Interactive Applied Benchmark Of Queues, or LiaboQueue, is aimed at addressing the perceived shortcoming of the Straits Times Index (STI), which critics say is heavily biased toward larger stocks. LiaboQueue, its creators argue, offers a more holistic reflection of the market.
"Looking at the STI is like trying to judge a plate of rojak only by the you tiao," LiaboQueue team leader Hari Yap said. "But the fried fritters don't form the entire dish, and blue chips don't make the whole market. The STI doesn't capture a lot of the penny stocks that form a large part of daily trading activity. Lunch crowds do."
The theory is that in a good market, people will eat out more, and queues will be longer at more expensive eateries. Conversely, a poor market leads to shorter overall queues and relatively larger crowds at the cheaper locations.
The LiaboQueue team has placed sensors at various food courts and restaurants between Tanjong Pagar and Raffles Place. The sensors detect how many people are lining up for food at any time, and compares the lengths of the lines to normalised benchmarks to measure how well the market is doing. Three months of testing have been positive, Mr Yap said.
Mr Yap said the team is in talks with various funds to create investment products linked to the new LiaboQueue index.
"Hopefully we can break the monopoly of the STI," Mr Yap said.