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Singapore stock market likely to slow down during World Cup

Publication Date : 09-06-2014


Stockbrokers in Singapore are bracing themselves for slimmer pickings during the upcoming football World Cup finals as retail investors shift their attention from the bourse to Brazil.

Several remisiers told The Straits Times that they expect their commissions to drop by as much as 50 per cent during the football fiesta, which kicks off on Friday morning.

Jimmy Ho, president of the Society of Remisiers, told The Straits Times: "Now it's already a moribund market. It'll be lower than low during the World Cup period."

Stockbroker Manoj Chaman Lal added: "Everyone's expecting this to be a lull period again.

"All eyes will be fixed on the World Cup, and a lot of punters and investors will be putting money into football rather than into the stock market."

Remisier Alan Goh said his commissions slumped by almost 30 per cent during the previous edition in 2010, compared with what he got in May and July that same year.

It did not help that the timing of the 2010 Finals in South Africa also coincided with the European debt crisis, further dampening investor interest in an already muted market at that time.

"Stock market volumes tend to be lower (during the World Cup) because retail participation is lower," said CIMB research head Kenneth Ng.

Retail investor participation in the Singapore market accounts for as much as 60 per cent of monthly trading volumes here this year.

Time difference has been cited as a key factor why interest in stocks is likely to take a hit during the tournament, which is held from June 12 to July 13, said market players.

Nearly all matches will start after midnight Singapore time, with most games beginning around 3am to 4am.

This means that stock speculators are likely to catch up on sleep in the day, and have less time to monitor the market and execute trades, said Ho.

Data compiled by DBS Equity Research from the last four World Cups showed that stock market trading volumes typically rise one month before and after the tournament, which takes place once every four years.

DBS head of equities research Janice Chua, who also studied market data in the last seven World Cups, noted that except for 1986, the Straits Times Index dropped within the two months prior to the tournament's kick-off date.

The correction magnitude ranged from 3.8 per cent to as much as 33.8 per cent, with the weakness in 1998 and 2002 clearly amplified by economic recession.

While the prospect of sluggish earnings is not something to look forward to, the quiet market may provide a silver lining to some brokers.

Ho said: "It's a good chance to catch up on other things - do more research or go on leave and take the family on holiday, as there's not much money to be made."

Chaman Lal added: "Some of us have already planned holidays during that period, and will make better use of our time than to just sit there and play Candy Crush."

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