Singapore has been a ”safe haven” in the past but not anymore … where its currency SGD is a popular short against other Asian FX and the implied volatilities of S’pore’s various asset classes have risen more vs its historical. On the contrary, many of its previously less than able neighbours have seen their implied volatilities collapsed vs their historical (*this will be addressed in another piece in the future).

The General Elections in May 2011 and the Presidential Elections in August 2011 have seen the Straits Times index (FSSTI) fallen by between 4% to 10%, from nomination day to 4 weeks after the respective election dates.  Financial markets do not like to handle the rising odds of increasing negative tail-risks associated with Singapore. The previously dominant ruling political party, People’s Action Party (PAP) is now seen as weakening, ineffective, irrelevant and even the cause of the major problems affecting Singapore now that they do not seem to have any new tricks to pull from the old hat.

While we scratch our heads wondering what will happen in the upcoming Punggol East by-elections on 26 January 2013 with nomination date on 16 January 2013 … SELL SELL SELL all longs in Singapore stocks (*where it has been a nice 10% Christmas rally from late 2012) and go short even if history is a guide!

May the best Man and Party win … or rather the best SHORTS win!


*Asianmacro is a beach bum managing his own wealth.  Besides deciding what to have for lunch (or hitting the gym sometimes), he is mostly found listening to loud music while trading and investing for himself.  While every care has been taken in preparing the information in and/or materials, such information and materials are provided “as is” without warranty of any kind, either express or  implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials. The opinions expressed do not constitute investment advice and independent advice should be sought where appropriate. In no event will Asianmacro be liable to you for any direct or indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached herewith.  Asianmacro may already have or intend to have a trading or investment position in the financial instruments or products referred to in this communication.  This is not intended as an offer or solicitation for the purchase or sale of any financial instrument and Asianmacro may also have interests different from or adverse to your interests.