Vindication for all STI investors
STI rallied hard on Thursday and Friday in support of Biden’s presidency supported by Congress. At the end of the week, STI closed with a solid candlestick and appears to remain strong on the futures as well (345 for SING at the time of writing). The question herein is “are we out of the woods?” At the start of this year, STI already performed poorly compared to other indexes due to its heavy reliance on its bank stocks. With Biden starting a new term on 20 Jan, banks will likely see more support and reassurance that decisions made for interest rates will be based on the needs of the economy. Although we will still expect some level of pull back when default levels start to increase when subsidies or debt moratorium expires. SG’s 2021 budget will likely be an expansionary budget again to help support the recovery of the Singapore economy therefore it is no doubt that the negative impacts will be alleviated.