Investors focused on value could miss out on new growth plays
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THE 21 per cent decline in the Straits Times Index (STI) this year belies strong buying activity among retail investors. The STI currently has a price-to-earnings ratio of about 10 times, and a price-to-book ratio of around 90 per cent. The last time the market was valued this cheaply was during the global financial crisis, and investors have been loading up on bargains. But it may be time to look at second-liners and new themes.
Singapore Exchange data suggest retail investors have been taking money out of mid-caps and buying the STI constituents during the rout.
In January and February, the combined retail inflow for the STI stocks was S$860.5 million. In March, this number rose to S$2.1 billion.
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