TR EMERITUS

I like to give my views about how the global stock markets will recover. This will happen within the next few weeks. Why did the stock markets fall? The trigger point was not the corona virus. It has been around for a few weeks, so it was a major factor causing the fear and uncertainty. But it was not the trigger point. The trigger was the collapse of the oil price following the disagreement between Russia and Saudi Arabia about limiting the production of oil. Saudi Arabia retaliated by flooding the oil market, causing the price to collapse. That triggered the collapse of the stock market. The collapse happened on 9 March 2020. That is on my 72th birthday. I will remember it for a long time. During the following week, the stock markets around the world dropped by 30%. When there is panic, few people dare to buy. But there are many people who have to sell, out of fear, or because they cannot hold the shares that they bought on margin. The drop in the share prices go beyond fundamental factors. This is how a bear market works. What will cause the global stock markets to recover? It could be the discovery of a vaccine or cure for the corona virus. But this will take time for its credibility to be established. It will not be the trigger. The trigger will be an agreement between Russia and Saudi Arabia to resume the production cuts. The oil price will recover. The traders will rush to buy shares. The global stock market will recover. When will it happen? It should happen within the next few weeks. Watch out for it.   Tan Kin Lian      Read More →

Italy's death toll from the Covid-19 has surpasses China's national tally, making it the country with the most number of Covid-19 infections and death outside of China. With 427 new deaths announced by the Italian authorities on Thursday (13 Mar), the country recorded a total of 3405 fatalities compared to China's 3242. Of the 9600 fatalities recorded around the world, more than a third of them are from Italy, including 5 medical workers. The country currently registers thousand of new infections on a daily basis, with the death rate in Madrid being described by local health authorities as “one case every 16 minutes”. Italy, with a population of 60 million is currently on a lock down. Meanwhile, Singapore has register another 32 new cases of Covid-19 infections, bringing the total tally to 345. Of the 345 confirmed cases, 124 have fully recovered and been discharged from the hospital. Of the 221 confirmed cases who are still in the hospital, most are stable or improving. 15 are in critical condition in the intensive care unit. The island city may be calling for a General Election in the first half of the year 2020, during the Covid-19 pandemic.      Read More →

Were the PAP ministers caught flat-footed by theIr Malaysian counterparts? The sudden and bold decision of new Malaysian PM Muhyiddin Yasin to swiftly lock down the country for two weeks as part of measures to arrest the spread of the Coronavirus must have shocked many people here. Singapore saw a record increase of 47 new infections on Mar18 including 33 imported cases. As Singapore and Malaysia’s economies and other human activities are so closely intertwined, the sudden lock-down of the Causeway linking the two countries is a major issue that cannot be taken lightly. “More than 300,000 people, many of them Malaysians working in Singapore, use the land checkpoints between the two countries daily.” (ST 18-3-20). Because of the suddenness of the Malaysian government in announcing and implementing the lock-down decision, all that Manpower Minister Josephine Teo could say was “the government was helping companies that employ Malaysian workers, especially those providing essential services, to find temporary accommodation in Singapore.” There are about 100000 Malaysians working here have no living arrangements in Singapore. The MOM took on the responsibility of helping these Malaysian workers to settle their accommodation needs in Singapore for a decision made by their own government which affected their livelihood. Josephine Teo was pleased to announce that “ more than 10,000 Malaysians working in Singapore and affected by the travel ban starting today found accommodation in Singapore within just a few hours yesterday.” (ST18-3-20). Housing options for these workers are staying with relatives, friends or colleagues, putting them up in hotels and dormitories or outright rental of accommodations for them by their employers. The government is generous in immediately offering a housing subsidy of $50/- a worker per night for 14 days to their employers. Are workers staying with relatives, friends or colleagues also eligible to claim this subsidy via their employers? I can understand the objective of this housing subsidy for Malaysian workers who are stuck in Singapore with the closure of the Causeway. Using a conservative estimate of 100,000 workers, the cost to Singapore is $70m. So Malaysia decides, Singapore pays (with public funds). It happens once to often that the government offers this subsidy and that subsidy to overcome a problem. I feel it is poor governance by simply using public money to overcome a problem that was unanticipated by the 4G leaders. Money aside, the accommodation of up to 300,000 Malaysians in Singapore for the next 14 days is like opening a new flood-gate of allowing foreign nationals into Singapore at this critical time without knowing if any of them is infected. Daily commuting between Singapore and Johore isn’t the same as living with a family in a HDB flat or a dormitory for foreign workers for 14 days. The concern here is local transmission by infected people who have yet show symptoms. Today, Malaysia is a hot spot of Covid19 infections among SEAsian countries with 790 infections and two deaths as at Mar18. This issue was highlighted in Guardian dated Mar12: “Many Coronavirus infections may be spread by people who have recently caught the virus and have not yet begun to show symptoms, scientists have found.” “An analysis of infections in Singapore and Tianjin in China revealed that two-thirds and three-quarters of the people respectively appear to have caught it from others who were incubating the virus but still symptom-free.” “Researchers in Belgium and the Netherlands drew on the data from outbreaks in Singapore and Tianjin to work out the ‘generation interval’ for Covid19. The generation interval is the time between one person getting infected and them infecting another. The figure is valuable for estimating the speed at which an outbreak will unfold.” “The mean generation interval was 5.2 days in the Singapore cluster and 3.95 days in the China cluster...” While there are some uncertainties in calculating the exact proportion of infections likely to spread from people who were still incubating and had yet to develop symptoms, based on the lowest estimate, there was substantial transmission of Coronavirus from people who had yet to fall ill. Not able to determine who infected whom poses difficulties in the research. “In the Singapore cluster, between 45% and 84% of the infections appeared to come from people incubating the virus. In China, the figures ranged from 65% to as much as 87%.” The Malaysian government’s decision to lock-down the country and thereby forcing up to 300,000 workers to live 14 days in Singapore added a new dimension to Singapore’s public health. No one really knows if any of them is already infected with Coronavirus before coming into Singapore and still symptom-free and yet infectious during incubation but not yet ill. It seems we are saddled with a fait accompli without a solution. With a range of measures and promise of even stronger measures adopted by the Multi-Ministry Task Force, the politicians in the team have neither succeeded in containing the local spread of infections nor curbing the rapid increase of imported cases so far. The daily increases are going up by double digits since last week. The caution and reluctance of the Task Force to act act swiftly and decisively, unlike Malaysia, in tackling the epidemic head-on, is the root cause of this failure. Economic and political considerations seem to outweigh the safety and public health of the entire population in Singapore. There can be no economic prosperity without good health. With Malaysia becoming a hot spot of virus infection in the region, the inflow of a few hundred thousand Malaysian workers into Singapore and staying for 14 days may greatly increase the risk of local infections in the community and may even drive up the number of infections exponentially after 14 days. I believe the present situation is fast getting out of control, contrary to PM Lee’s assurance in his speech last week. https://www.theguardian.com/…/coronavirus-most-infections-s… Take care, be safe.   Kok Ming Cheang      Read More →