Stay at home and buy stocks?
The enhanced social distancing measures in Singapore kick-started today and will last until 4th May 2020. During this period, Singaporeans are advised to stay at home and all places will be closed apart from essential services.
Observations
For myself, there was not much change to the daily routine as I already started working from home in mid-Feb. Food delivery was prompt as usual, didn't really feel like there was any delay to my order despite the possibly higher number of orders. I noticed that some restaurants on foodpanda extended their opening hours (starting earlier), this could be to help spread out the orders coming in so that restaurants would have sufficient time to prepare them.
When I went out for my run, I noticed a significantly larger number of people running along my usual route. I'm guessing everyone is bored at home and wants to head out for some fresh air. Also, as I was running past the neighbourhood coffeeshops and hawker centres, I noticed that many stalls were closed (>50% closed). Those that were open did takeaways and deliveries, in compliance with the government's advisory.
Stock market impact
On Day 1 of the enhanced measures, the STI was up 4.1% with most REITs up at least 5%. This is interesting since the measures imposed by the government are actually somewhat negative for landlords as they compel landlords to give rental deferments and property tax rebates to tenants.
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| STI movements over the past month |
From a macro perspective, the prevailing sentiment towards the virus could be that it is tapering off as we see slowing growth in new cases and deaths, especially in Europe. On a more micro level in Singapore, the market uptick could also be driven by the larger number of people working from home, hence having more time to trade and look at markets. Pretty sure the stock market provides sufficient excitement/entertainment for those stuck at home.
Granted that we are only seeing shoots of recovery, this could be another dead cat bounce. The slowing growth in cases can be attributed to strict measures taken by governments (ie. lockdowns) but there is still growth. Until a reliable vaccine/cure is found, investors should proceed with caution as many governments have already announced stimulus measures and aren't likely to have many more bullets left.
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