Tips to search for stock in Singapore for trading

The Singapore Stock Market is consider as small and not that developed when you compare it with the US market. This is both a blessing and a curse. It is a blessing because the limited sectors make it easier for beginner to scan for the right stocks to trade. However, due to the limited sectors, our opportunities to trade for profit get smaller. This is because of sector rotation when it comes to market rally or drop. Sectors of the industry will take turns to rally or drop significantly.

The main sectors that i focus on for trading in Singapore market are listed below. I tend to avoid blue chip stocks that cost more than $2SGD because the brokerage cost would be very high and will eat into my trading profit. However, some people prefer to trade these counters because of the liquidity offers. (Confirm got buyer and seller). For trading purpose, my advise would be to steer clear of penny stocks, stock that cost less than 0.20cent. Reason is because the liquidity might not be there at times, you might not be able to find a buyer when you want to sell. This is especially important to contra players. Focus and learn how to make money from the below sectors before you branch out further and explore other sectors.

1. Palm Oil Sectors: Factors affecting the stock price includes crude palm oil index, crude oil price and US dollar exchange rates. When US dollar strengthen, crude oil price would usually drop, therefore crude palm oil index is expected to drop accordingly. This is because crude palm oil is a subsititute product for producing biofuel. Example, Indoagri, Goldenagri
   
   
2. Offshore Marine sectors: Crude oil price is the single major factor that influences the price of the stock. The reason is because when crude oil price is high, more companies will award contract to offshore marine companies to dig oil from the sea. The cost for building a oil rig in the sea is much more expensive than drilling for oil on land. And it only make financial sense to increase demand for oil rig if the oil price is high. Example, Swiber, Sembawang Marine, Keppel corp
   
   
3. Property sectors: Factors affectng the stock price includes interest rates, new home sales, existing home sales, anticipated future economic outlook and performance of banking stocks. Example, Allgreen, SC Global, Ho Bee, Capitaland, Keppel land.
   
   
4. Shipping sectors: Factors affecting the stock price includes, baltic dry index (the freight rates), crude oil price. When crude oil price increases, cost of doing business increase so stock price would usually turn lower if baltic dry index do not correspond with the increase. Example, Cosco, NOL, Mercator
   
   
5. Commodities sector: Raw material prices such as copper, steel, aluminium and coal. When these item increases in price due to shortages, the stock price of these counters will usually rise. Example, Noble, Olam, Straitsasia