Lion Global Investors, a Singapore-based asset manager, has partnered with local brokerage OCBC Securities to create the city state’s first technology-focused ETF.
The Lion-OCBC Securities Hang Seng TECH ETF is set to begin trading on Singapore Exchange on 10 December and will be available in Singapore dollar (HST SP) and US dollar (HSS SP) share classes.
The fund provides pure-play exposure to the fast-growing Chinese technology sector by tracking the innovative Hang Seng TECH Index.
The index consists of Greater China-incorporated stocks that have high business exposure to the internet, fintech, cloud computing, e-commerce, and digital technology themes.
Companies must either specifically be “technology-enabled” (i.e. operate primarily on an internet or mobile platform) or have an R&D expenses-to-revenue ratio that is greater than or equal to 5% or revenue growth that is greater than or equal to 10%.
The 30 largest stocks as ranked by market capitalization that meet these criteria are selected to form the index. Constituents are weighted by free-float market capitalization, subject to a cap of 8% on any individual stock.
As of October 2020, over two-thirds (68%) of the index was allocated to the information technology sector with modest allocations to industrials (12%), healthcare (11%), consumer discretionary (7%), and financials (2%).
Major positions currently include well-known Chinese names such as Xiaomi, Meituan Dianping, Alibaba, Tencent, Sunny Optical, JD.com. Other familiar holdings include Lenovo, NetEase, and Ping An Healthcare & Technology.
The index is reviewed on a quarterly basis but also includes a ‘Fast Entry Rule’ to facilitate fast-tracked inclusion for qualified IPOs that rank in the index’s top ten by market cap.
Gerard Lee, Chief Executive Officer at Lion Global Investors, said, “The Lion-OCBC Securities Hang Seng TECH ETF allows investors in Singapore a convenient and cheap way of investing in a secular trend that is underway. Other than investing in the merits of companies at the forefront of disruption and innovation, this ETF gives investors an easy avenue to express their view on fundamental changes happening in geopolitics. The superpower rivalry between China and the US has resulted in a bipolar world where the tech champions in our time zone will be listed in Asia instead of the US.”
Wilson He, Managing Director of OCBC Securities, added, “We have seen how the pandemic impacted our lives and how technology has stepped in to give a glimpse of normalcy in the changed world. The technology sector has significantly outperformed the broader equity market during this period and technology stocks have benefitted from changes in consumer behavior as well as the digital transformation of businesses. The Lion-OCBC Securities Hang Seng TECH ETF comes at the right time to ride this wave of change and bullish sentiment.”
The ETF will list with a management fee of 0.45% and an expense ratio that will be capped at 0.68% for the first two years.
The fund is expected to begin trading with a minimum investment amount of less than S$20, making it accessible to a wide audience of investors.
OCBC Securities anticipates that the ETF will see significant demand, noting that trading volume for Hong Kong-listed equities on its platform has grown by more than 30% compared to the same period last year with Chinese technology companies consistently ranking among the top traded counters. Furthermore, the firm highlights a surge of interest in ETFs among retail investors with trading volume in the first 10 months of 2020 already triple that of last year.
The post Lion Global and OCBC to launch Hang Seng TECH ETF in Singapore first appeared on ETF Strategy.
Why You Shouldn’t Worry About Costco Stock
The warehouse club’s shares have been falling, but investors have nothing to worry about.
The warehouse club's shares have been falling, but investors have nothing to worry about.
The market crash has driven stocks into a bear market panicking many investors as strong companies with solid results see their shares tank. It's a market that seems to have no safe havens as the vague specter of inflation has cast a dark shadow over the entire market, but pandemic stocks, technology companies, and the entire retail sector.
Costco (COST) - Get Costco Wholesale Corporation Report has not been immune to the drop. Despite the warehouse club operating pretty much as it always has, steadily adding members while retaining existing members, the chain has seen its share price fall 22.83% in the past six months.
That's a big drop for a chain which has been a very steady stock, usually moving upward while also paying a dividend. Costco's share price drop, however, has nothing to actually do with the company's performance. Instead, the company has fallen victim to broad concerns about retail in general.
Target (TGT) - Get Target Corporation Report, for example, saw its shares lose over 25% in value after it reported first quarter results. The chain grew its same-store sales, which was impressive given that it had seen that metric rise by 22.9% in previous-year quarter. The retailer faltered when it came to profits as earnings were cut in half year-over-year due to rising costs and supply chain issue.
Never mind that Wall Street has taken Target's strength for weakness (making money and gaining customers under these conditions is impressive), Costco shareholders have even less to be worried about.
Why Is Costco So Strong?
Retail stocks, including Target and Costco, have suffered due to rising prices (inflation), supply chain issues, and fears over consumer spending drops. These are real concerns, but Costco has a lot of protection from those issues. The warehouse club operates on a membership model. Its profits come largely from selling memberships, not on the goods its sells its members.
Costco offers members the promise of low prices in exchange for a membership fee. The company offers a limited selection to keep prices down and it has enormous bargaining power with suppliers.
It's possible that inflation will drive prices higher on some key Costco items, but they company can simply pass those increase on without adding a markup. That makes the chain a value proposition for shoppers as these factors impact all retailers.
Costco has been able to hold its own on gross margin, according to CFO Richard Galanti speaking during the company's second-quarter earnings call.
"Moving down to the gross margin line. Our reported gross margin in the second quarter was lower year over year by 32 basis points but up 5 basis points, excluding gas inflation," he said.
Basically, aside from gas -- which is generally cheaper at Costco than anywhere else -- the company maintained its margin. It also grew its same-store sales by 11.1% excluding gas while its income rose as well.
"Net income for the quarter came in at $1.299 billion or $2.92 per diluted share. Last year's second quarter net income came in at $951 million or $2.14 per diluted share," Galanti shared.
Membership Is Costco's Key Metric
Unlike a traditional retailer, sales aren't the key metric for Target. Membership tells investors more about the health of the company than anything else. The warehouse club needs both retain members and add new ones.
It has done that, according to Galanti.
"In terms of renewal rates, they continue to increase. At second quarter end, our U.S. and Canada renewal rate stood at 92%, up 0.4 percentage point from the 12-week earlier at Q1 end. And worldwide rate, it came in at 89.6%, up 0.6% from where it stood 12 weeks earlier at Q1 end," the CFO shared.
Costco has seen its renewal rates go up as more members auto-renew. The warehouse club has also seen more of its members opt for the higher-priced Executive Membership, " who, on average, renew at a higher rate than non-Executive members," Galanti shared.
Membership has been growing (as it steadily has) as well, according to the CFO.
In terms of the number of members at second quarter end, member households and total cardholders, total households was 63.4 million, up 900,000 from the 62.5 million just 12 weeks earlier; and total cardholders at Q2 end, 114.8 million, up 1.7 million from the 113.1 million figure 12 weeks ago. At second quarter end, paid Executive Memberships stood at $27.1 million, an increase of $644,000 during the 12-week period since Q1 end. Executive Members, by the way, represent now 42.7% of our total membership base and 70.9% of our total sales.
So, while Costco's share price has suffered due to broader concerns and general market panic, the chain's business has not suffered. In a terrifying environment for investors, you could argue that Costco's one of the safer bets as long as you're willing to be patient.
In the short-term, stock prices may not reflect actual business results. Over time, however, the warehouse club will go back to posting steady share gains while also paying a dividend (and perhaps offering a bonus special dividend).stocks pandemic consumer spending canada
Hot Biotech Penny Stocks to Watch as Stocks Enter Bear Market
Are these biotech penny stocks on your watchlist right now?
The post Hot Biotech Penny Stocks to Watch as Stocks Enter Bear Market appeared first on…
3 Hot Biotech Penny Stocks to Add to Your Watchlist With the Market Down
Recently, biotech penny stocks have seen heightened bullish sentiment. Today, the emphasis on biotech stocks comes as the Monkeypox virus is seeing a resurgence in certain areas around the world. Today, the WHO confirmed 80 cases of the virus in 11 countries. And since then, investors have begun looking for biotech stocks that may be able to benefit.
In addition to this, we are also seeing heightened volatility with penny stocks and blue chips. This means that it is more important than ever to stay on your toes. Understanding what your trading strategy is and how you can best execute it is crucial in these market conditions.
If you are thinking about getting into penny stocks, then make sure to do your research first. There is a lot going on in the stock market, so researching and understanding all you can about penny stocks is essential to your success. With this in mind, let’s take a look at three biotech penny stocks to add to your watchlist right now.
3 Biotech Penny Stocks to Add to Your Market Crash Watchlist
Immix Biopharma Inc. (NASDAQ: IMMX)
One of the bigger gainers of the day is IMMX stock. At EOD, shares of IMMX stock shot up by over 30%, with a 5% gain in after hours trading. And, in the past five day period, shares of IMMX have climbed by more than 50%.
While we do see many gains with penny stocks without news, today, Immix made an exciting announcement in premarket trading. The company stated that its IMX-110 drug demonstrated improved survival over the current approved drug, Trabectedin. It states that IMX-110 is part of what is expected to be a $6.5 billion market by 2030.
“We are excited to see continued evidence of IMX-110 anti-tumor activity versus approved therapies. We believe this is a preview of anti-tumor activity to be demonstrated in our 2 clinical trials to be kicked-off in 2022: IMX-110 monotherapy, and IMX-110 in combination with anti-PD-1 tislelizumab.”The CEO of Immix Bio, Ilya Rachman
Right now, there is quite a lot of bullish sentiment with biotech penny stocks. And, as a clinical stage biopharmaceutical company, Immix is at the center of this. While it is highly volatile IMMX stock could be worth adding to your list of penny stocks to watch.
TherapeuticsMD Inc. (NASDAQ: TXMD)
Another gainer of the day on May 20th is TXMD stock, which shot up by over 35%. In the past month, shares of TXMD stock have fallen by around 74%, which makes this gain much more substantial.
Today, the company announced that it received FDA approval for its Supplemental New Drug Application for Annovera. With this approval, the company will be able to produce 7,000 additional rings for the supply chain, which will be made available to customers by the second and third quarter of this year.
“Today’s approval is an important milestone as it will allow us to more efficiently scale, manufacture, and consistently supply ANNOVERA to meet the increasing demand by women who want procedure-free, long-lasting reversible birth control.”The CEO of TherapeuticsMD, Hugh O’Dowd
Back in 2018, Annovera was approved by the FDA as a long-lasting, reversible, procedure-free birth control product. And since then, the company has worked hard to commercialize it as much as possible. With that in mind, do you think TXMD is a worthwhile add to your penny stocks watchlist or not?
Chimeric Inc. (NASDAQ: CMRX)
With an over 6.8% gain at EOD on May 20th, CMRX stock is another penny stock that investors are watching right now. In the past five days, we’ve seen a very steady gain with CMRX stock, pushing up by more than 20%, which is no small feat. And, this comes after a six month drop of over 60%.
The main reason for today’s gain with CMRX stock comes as fears surrounding an increase in Monkey Pox cases, are driving up biotech stocks. This includes Chimeric, which recently announced a deal with Emergent, to offer exclusive rights for its smallpox oral antiviral product known as Tembexa.
And, given that Monkey Pox is a smallpox derivative virus, we see the major correlation between the two. With this new virus situation, there is a large demand increase for this vaccine. And while the fears that are comparing this virus to Covid-19 are somewhat unwarranted, there is a lot to consider. With this in mind, does CMRX deserve a spot on your buy list or not?
Which Penny Stocks Are You Watching Right Now?
Finding the best penny stocks to buy is all about understanding where to look. While it can be difficult given the heightened volatility in the stock market right now, there are some ways to make it easier. The best course of action will always be to have a well-thought-out trading strategy on hand.
This can help you to maximize your chance of profitability and increase your odds of not seeing losses. In addition, considering exactly what is going on in the stock market remains paramount to your success as an investor. So, as we continue to traverse this extremely volatile period, which penny stocks are on your watchlist right now?
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Why I’m Not Worried About the Stock Market Crash
In the long run, the stock market always goes up (but it’s way more complicated than that).
In the long run, the stock market always goes up (but it's way more complicated than that).
We're not living in 1929. It's important to remember that as we watch the stock market crash and our personal net worth take a big hit.
While that has certainly happened, it's important to note that the stock market isn't the economy. We're not on the cusp of the next Great Depression. Instead, we have a market that's spooked by rising inflation (i.e. stuff costing more) that's also struggling with supply chain issues caused by an unparalleled global pandemic.
Yes, many things cost more including basic needs like food and shelter, as well as near-basic needs likes cars and gas. But, while inflation has been real, that's not the full story of the U.S. economy.
We're also living at a time where the unemployment rate (3.6%) remains near historic low (where it most likely would be if jobs weren't so plentiful allowing some people to sit out of the labor market for a period). The labor picture has for a very rare time in American history titled in favor of workers.
This has led to jobs in the retail and service space which once paid minimum wage while offering minimal benefits to offer $15 an hour or more along with perks like free college tuition. That's not to say that these jobs even pay a living wage (it depends a lot upon where you live) but the situation for workers in these spaces has notably improved.
The economy has its struggles, but it's not a clear picture. High house prices for one person means a home that has gained a lot of value for someone else. And other issues -- like the high cost of gas and the shortage of new as well as used cars -- are tied to relatively short-term problems.
But What About My Investments?
Stock markets crash. That's sometimes an indication of greater economic problems, but the U.S. stock market has never failed to recover its losses -- often in a fairly quick period. That's cold comfort as you see red in your portfolio, but if retirement (or whatever you plan to spend your invested money on) isn't now or in the next year or two, a "crash" is something expected that can be used to your advantage.
The first thing you should do is evaluate why you own the shares that you own. Has something changed about any of those companies because of the pandemic? Not has the share price gone down, but has anything changed about the company's long-term trajectory?
Short-term investors, or perhaps people who panic easily, have used Netflix's (NFLX) - Get Netflix, Inc. Report slight subscriber drop as a sign that the company has peaked. Do you believe that or do you see the streaming leader both returning to growth and better controlling its content costs?
Netflix had explosive growth during the pandemic. Would you have rather it added those customers at a pace that spread things out for Wall Street? Do you see people leaving the service for a rival or to start reading more?
The reality is that many high-quality companies have suffered major declines for reasons that have nothing to do with their business performance. Yes, the pandemic did create some false winner that won't be long-term successes, but that's a small number of companies (and many long-term investors avoided those companies because of that possibility.
Now Is the Time to Buy
The stock market has become a giant Marshalls filled with name brands at huge discounts. It may seem counterintuitive to buy while stocks are crashing, but isn't that the best time to buy? If your BMW dealer has too much inventory and offers a sale, that doesn't change the long-term value of owning a BMW.
And while buying can be a huge opportunity, the reality is that a market crash is not the time to sell (unless you truly believe you have a holding that's not a good long-term investment). Yes, a lot of high-fliers have fallen to earth, but that was true in 2008 as well and history has shown that holding and buying great companies when prices are low is how you get rich.
Daniel Kline is Managing Editor of TheStreet.comdepression unemployment pandemic stocks spread unemployment stock markets
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