With the threat of inflation and possible recession in the US, Singaporean investors have reduced their exposure to American stocks, says digital brokerage TD Ameritrade.
TD Ameritrade Singapore clients reduced exposure during July, and unlike the brokerage’s general client population, investors here were net sellers of equities overall.
For that month, the most popular names bought by TD Ameritrade clients here and abroad are Advanced Micro Devices, Nvidia, Walt Disney, Amazon and Alphabet.
Conversely, investors sold shares of Tesla, Nio, Twitter, Pfizer and Alibaba.
According to TD Ameritrade, its proprietary Investor Movement Index (IMX) for TD Ameritrade’s Singapore clients measured 4.35 in July, a decrease from the previous score of 4.88 in June.
Each month, TD Ameritrade pulls a sample from its client base of funded accounts, which includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.
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In July, the total IMX for all TD Ameritrade clients measured 4.68, down from 5.10 in June.
Investors in the US markets had reason to be optimistic in July, says Greg Baker, CEO of TD Ameritrade Singapore. “In particular, corporate earnings by and large avoided any of the anticipated ‘worst case’ scenarios — but the threat of inflation and a possible economic recession in the US have caused investors to look closely at their tolerance for risk and in many cases, gravitate towards established, blue chip-style names.”
He adds: “Despite finishing strong at the end of the month, the markets were volatile in the face of macroeconomic concerns in July and TD Ameritrade clients in Singapore continued reducing exposure as a result.”
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Singaporeans positive on TSMC
Both TD Ameritrade Singapore clients and the overall TD Ameritrade client population favored Amazon for the second straight month, as the e-commerce giant split its stock in early-June for the first time since 1999. This led to increased interest in the stock that carried into the July period, says TD Ameritrade.
July was a period of strong performance for semiconductor giants Nvidia and Advanced Micro Devices, and TD Ameritrade Singapore mirrored the overall TD Ameritrade client population in net buying the two companies.
However, TD Ameritrade Singapore clients also saw opportunity in Taiwan Semiconductor Manufacturing Company (TSMC) and were net buyers, differing from the overall TD Ameritrade client population.
TD Ameritrade Singapore clients, like the overall TD Ameritrade client population, were net sellers of electric vehicle makers Tesla and Nio in July.
Additionally, TD Ameritrade Singapore clients differed from the general client population in net selling Li Auto.
Like the overall TD Ameritrade client population, TD Ameritrade Singapore clients were net sellers of Twitter in July as the stock rallied despite uncertainty surrounding the potential purchase of the company by Elon Musk.
Despite being net sellers of equities overall, TD Ameritrade Singapore clients were net buyers of five of the S&P sectors: communication services, consumer staples, financials, industrials, and materials.
