Sunday 13 January 2013

Singapore Property Stocks gap down on open on Monday, what you should do?

Dear Friends,

I think by now, all should have known of the bombshell our government drop on housing to cool the housing market.

See this news to know more:

This is perhaps the most severe of all measures, and definitely housing companies will be affected.

My opinion is that if you have porperty stocks at hand, please don't sell away on monday at the opening minutes. What is lost is lost. If your stock gaps down, let it be. Let the panic subside. Trying to sell in a panic is the last thing you want. Always know that this measure will not immediately make an impact on the earnings of your property company. If your stock is having business overseas, then all the more it won't have any impact on its bottomline. So just hang on.

For those who thinking of shorting the stock, I do not encourage that. Market makers are too clever for you. By gapping the stocks down, they will try to maintain liquidity. If you short it, you may be against them. Even if you want to short, do not short during the first 60 minutes. I would encourage you to short only after Monday when you think your stock is weak.

For those that are holding on to stocks, expect the market to drop a bit, STI to be down because of the property stocks. However always remember that the fundamentals of the market in general is still bullish. I might even add some positions to my portfolio if I spot any strength in the any stocks amid the drop! 

And contrary to what you might think, one sector I will be watching to buy is the PROPERTY SECTOR, when stability returns.  I will be aiming at those property stocks whose money is not made in Singapore, but overseas, like China. Hope they are pulled down!   ;)


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