Stimulus lifts STI but not everyone is a buyer
LAST Friday, Singapore's Straits Times Index gained 1.66 per cent or 41.20 points to close at 2,528.76. It finished the week up 118.02 points or 4.9 per cent, lifted by the government's mega Covid-19 relief package.
Almost every government in the world is taking unprecedented steps to soften an inevitable recession. But with the CBOE Volatility Index still hovering at levels higher than during the 2008-2009 financial crisis, many still feel it's too early to buy the bounce.
CGS-CIMB Securities chief investment strategist Lim Say Boon wrote last week: "The bubbles in equities, bonds, and fiscal/ monetary policy were awaiting catalysts for mean reversion. They found it in Covid-19. The markets will at some stage look past the panic and fear, towards anti-viral treatments and vaccines. But not before completion of a more painful mean reversion."
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