Forget Password?
  1. Indices
  2. Commodities
  3. Currencies
Straits Times 3,211.49 +16.53 +0.52%
Hang Seng 27,352.69 +265.06 +0.98%
Dow Jones 27,219.52 +37.07 +0.14%
Shanghai Composite 3,031.24 +22.42 +0.75%
Daniel Loh: Hold & Wait; Buy Growth Stocks When Market Recovers
Aspire, Thought Leaders | 05 October 2015
By: Chen Xushuang
Articles (26) Profile

Economists have yet to arrive at an agreement to when the US Federal Reserve is going to raise interest rates. Some are looking forward to a rate hike in this December, while others think that it is more likely to happen next year. As such, we have interviewed local investment guru Daniel Loh for his views on the issue.

US Economy in Good Shape, but China is a Concern


“Perhaps nobody can say for sure other than Yellen herself when it comes to when the rate hike would be,” said Daniel. “But I think she would base her decision on the following two factors: Whether the US economy has recovered, and also the state of the world economy.”

The US economy appears quite robust right now—GDP has increased at an annual rate of 3.9 percent in the second quarter of 2015, which is also the highest growth rate in the latest three quarters. Despite that, the economic performance of China and the emerging markets remain a concern.

However, Daniel thinks that China is not the main reason for the global stock market plunge. The actual reason, he said, is the feeling of insecurity among investors caused by speculations of the rate hike.

Thus investors would tend to avoid the global stock market before the hike has been confirmed and move their funds to relatively lower-risk investment tools instead.

Daniel also believes that the stock market will recover once the interest rate hike has taken place, and especially if investors can get to know the exact time, duration and magnitude of the hike.

So is the Chinese Stock Market Unattractive Right Now?

Though the Chinese economy is slowing down, Daniel does not see it as a sign of the Chinese stock market turning unattractive.

According to him, the Chinese stock market is still in the second stage of a bull market, and he believes that it will eventually recover with time. He acknowledges that the Chinese government has been trying to stimulate the economy since June 2014, but he also says that one should not expect quick results.

What Investors can Do

In view of the existing concerns and insecurities regarding the Fed rates, Daniel advises investors to “put actions on hold” for the moment, and make use of this period of time to do some research and planning. Upon market recovery, he recommends investors to buy good growth stocks that have depreciated more in value.

Meanwhile, as China slows, Daniel advises investors to take note of defensive stocks, which typically perform better than the market during recessions.

Still worried about when and how much would the US Federal Reserve hike interest rates? Do you have burning questions that you want to ask regarding the China economic slowdown and SHCOMP nosedive in June? Are you confused if any of the external factors from other countries in Asia will affect your Singapore stocks portfolio?

Catch renowned investors and speakers with rich experience in the stock markets, who have had witnessed multiple stock market crashes and global recessions over the years at Shares Investment Conference 2015!

Speaker profiles

1. Dr Chan Yan Chong, a renowned investor with more than 25 years of experience and the MBA programme director & associate professor of business school at the City University of Hong Kong.

2. Kevin Gin (CFA), the Founder and Principal of Alpha Capital. He was the former COO for CITIC Securities, Head of Singapore and Regional Real Estate Research for Kleinwort Benson Securities Asia (now part of Credit Suisse) and Head of Greater China Property Research with Yuanta Securities (Hong Kong)

3. Louis Wong, one of the most experienced fund managers in Hong Kong. He has over 25-years of solid experience and track record in the financial market. He was awarded Best Financial Analyst for 3 years by the Putonghua Channel of Radio Television Hong Kong and is also a part-time instructor of several investment courses in various Hong Kong universities.

4. Daniel Loh, an investment coach that specialises in equities and derivatives trading, he appears regularly on local TV financial programmes like “Good morning Singapore” and “Hello Singapore”.

As a Communications Studies graduate specialising in journalism, Xushuang is keen to observe and explore issues that readers want to know more about, and to deliver quality content through engaging writing.

Please click here for more information about this author.

Join The Conversation
The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

All Rights Reserved. Pioneers & Leaders (Publishers) Pte Ltd. Best viewed with Mozilla Firefox 3.5 and above.