Is Singapore’s Stock Market Really “Slow”? These Students Test It

Key Concepts

Macro-Trend Investing: Focusing on broad economic shifts (e.g., AI-driven semiconductor demand) rather than individual stock picking.
Small and Mid-Cap Equities: Companies with smaller market capitalizations that are often overlooked or under-researched compared to blue-chip stocks.
Fundamental Analysis: Evaluating a company’s intrinsic value based on financial health and business prospects rather than short-term market sentiment.
Lot Size Constraints: The traditional requirement to trade stocks in fixed blocks (e.g., 1,000 shares), which creates capital barriers for retail investors.
Conviction-Based Holding: Maintaining positions despite short-term volatility when the underlying fundamentals remain sound.

1. The 45-Day Challenge: Methodology and Results

A group of first-year university students achieved a 15.23% return in 45 days (6 weeks) by investing in the Singapore Exchange (SGX). Unlike typical retail strategies that focus on blue-chip dividend stocks, this team was restricted to small and mid-cap companies.

Strategic Approach: Instead of starting with specific companies, the team identified macro trends. They utilized AI tools to scan sectors, followed by rigorous manual verification to build investment conviction.
Sector Selection:
- Semiconductors: They identified that AI demand would drive the entire supply chain. They specifically targeted Singaporean firms specializing in semiconductor manufacturing equipment, betting that increased chip orders would boost these equipment providers.
- Property: The team used "on-the-ground" observation, noting the frequent opening of new property showrooms in their local area as a proxy for strong sales performance.
- Gold: They utilized a local mining company as a proxy to track global gold price fluctuations.

2. Investment Philosophy: Conviction vs. Noise

The team’s success was attributed to a disciplined, non-reactive approach:

Avoiding Short-Termism: They ignored daily news cycles and geopolitical tensions (such as the Iran conflict), which caused temporary volatility.
Holding Strategy: They rejected day trading in favor of holding positions. Even when stocks dipped due to external US market news, the team maintained their positions because their fundamental analysis of the companies remained unchanged.

3. Market Dynamics: The "Boring" Singapore Market Myth

The video challenges the perception that the Singapore market is exclusively for slow, dividend-yielding "blue chips."

Growth Potential: While the market is historically stable, there is significant, under-owned growth potential in the mid-cap space.
The Trade-off: Investing in mid-caps requires more "primary research" and "getting hands dirty" because these companies lack the extensive analyst coverage found in large-cap stocks. This leads to higher volatility but potentially higher rewards.

4. Accessibility and Structural Changes

A significant barrier for young investors in Singapore has been the fixed lot size requirement.

The Barrier: Traditional brokers required a minimum of 1,000 shares per trade. For a $5 stock, this required a $5,000 capital outlay, which is prohibitive for many students.
The Pivot: The SGX has begun reducing minimum lot sizes for counters priced over $10 (from 100 shares to 10). This change allows for "bite-size" investments (e.g., $500 instead of $5,000), significantly lowering the barrier to entry for retail investors.

5. Notable Quotes

"We'll see that once there's a greater order for semiconductor chips, then we tend to see this sector of stocks all go up. So that was really our bet—to not so much go for individual companies, but target the sectors." — Team Member
"I feel like if you have conviction in the stock and generally the fundamentals are there, I think you should just hold it up." — Team Member
"There are companies that are still awaiting to be discovered, but they are actually primarily in the mid-cap space because these are the areas that are a little bit overlooked and under-owned." — Narrator

Synthesis and Conclusion

The case study demonstrates that the Singapore market is more dynamic than its reputation suggests. By shifting focus from dividend-heavy blue chips to growth-oriented mid-cap sectors, and by utilizing a disciplined, conviction-based holding strategy, retail investors can achieve significant returns. The key takeaways are:

Research is paramount: Success in the mid-cap space requires independent, primary research to compensate for a lack of institutional coverage.
Macro-trends drive performance: Identifying sector-wide tailwinds (like AI) is more effective than chasing individual stock hype.
Accessibility is improving: Regulatory changes regarding lot sizes are making the market more inclusive for younger, smaller-capital investors.