Our poll of 100 S'pore retail investors: We believe the storm will pass

EVERY cloud has a silver lining.

And though investors here are straining their necks to find the silver lining in this gloomy stock market, they are still hopeful that the dark clouds will pass.

The economic fundamentals are still strong, many retail investors argue, as they shrug off their losses, or hold on for dear hope.

Their hope is well-placed, what with the US Federal Reserve's surprise move before US markets opened yesterday to cut its key interest rate from 4.25 per cent to 3.5 per cent.

But that didn't assuage investors in the US. Wall Street plunged at the opening of trading, with the Dow Jones Industrial Average down about 300 points, or 2.43 per cent, to 11,805.6.

The broader Standard & Poor's 500 index fell 32.49 points, or 2.45 per cent, while the Nasdaq composite index eased by 2.86 per cent.

Bracing themselves

And while the 100 Singapore retail investors polled by The New Paper yesterday were mostly hopeful (see chart on right), they are bracing themselves for further volatility and hoping to ride out what they feel is a sentiment-driven selldown.

Take Mr Yap Ho Kiat, 38, who was among those hit hard when the Singapore stock market plunged on Monday, in what was its worst one-day fall since 1987.

The regional director's investment portfolio suffered paper losses of $25,000 as stock prices nose-dived.

Still, Mr Yap is hanging on tight to his investments, refusing to join panic sellers.

"Those who sell now are not the smartest," he said. "It's a waste of good money if we sell now.

"After all, the fundamentals of Singapore's economy are strong."

Mr Yap is not alone in his optimism for a speedy market recovery.

Of the 100 Singaporeans with stock investments who were polled at Shenton Way yesterday, almost four out of five expressed hope or optimism for a fast turnaround of market figures.

Only 20 per cent felt despair or were frustrated with the current situation.Most pointed to a strong Singapore economy, with its high growth and low unemployment, as reason to be upbeat despite the benchmark Straits Times Index (STI) plunging 6 per cent on Monday, and 1.73 per cent yesterday.

Mr Jeff Ward, a 41-year-old regional manager, said: "The fundamentals are still solid, so while the market might have gone sideways, it can bounce back in six months' time."

An investor who suffered paper losses of $100,000 over the past two days said: "I didn't imagine it would drop like that, but it will stabilise sooner or later."

The 68-year-old, who declined to be named, said he was not too concerned as he is sitting on gains of more than $1 million, thanks to the bull run in 2006 and last year.

So who is to blame for the rash of crashes across the world? Bank manager Jo Tan pointed to the possibility of a US recession.

"Whenever the US economy goes down, Singapore's economy follows too," the 36-year-old said.

Others, like sales manager Adrian Chew, thought the market was simply overheated and that it was time for it to cool down.

"Greedy speculators everywhere made the market too bullish," the 53-year-old said. "Everyone thought the economy was good, but now they are caught in a bear trap."

Stockbroker May Ng, 27, refused to see gloom in the situation.

"I don't think the US will go into a recession," she said. "George W Bush and the Federal Reserve won't let it happen."

Miss Ng added that this is a good time to buy and hold on to stocks.

Likewise, bank manager Fred Tan saw the stock market plunge as a good buying opportunity.

Mr Tan, 33, said: "I will be getting into the market within this half of the year."

He felt that the market "should go down some more to self-correct".

While many of those polled saw this as a chance for bargain-hunting, they were also wary of a volatile market in the short term.

Wait and see

Those, like Mr Derek Low, who got out of the market just in time to escape the onslaught, said they were adopting a wait-and-see attitude.

The 35-year-old banker said: "I think I'll only consider buying back in after Chinese New Year when the mass market panic is over."

Mr James Lee, 26, was not as lucky. He was caught flat-footed by the sudden market plunge and was forced to sell at loss.

"I can only blame myself for making the wrong investment choices and not cutting my losses earlier," the programmer said.

For Mr Kenneth Chew, 40, he is throwing caution to the wind.

"If you bought earlier, you'd be badly burnt, but if not, bargain hunt!" the financial planner said.

This overwhelming confidence seemed to have rubbed off on the market by the end of the trading day yesterday.

The STI's spectacular comeback - ending the day 50.6 points down at 2,866.55 after losing as much as 167 points earlier in the day - provided the much-needed silver lining.

Additional reporting by Charrisa Yong and Swan Tan, newsroom interns

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