Helping retail investors gain an edge

By Aaron Low for The Business Times

App that alerts retail investors of moves by the smart money takes top prize in early stage category.

RETAIL investors are often deluged with a flood of information when it comes to the stock market, but not all of it is useful.

One startup aims to change that by providing a key piece of information that regular investors may not track: Where the smart money is heading.

The app Spiking consolidates the latest disclosures published on the Singapore Exchange and pushes it to mobile devices almost instantaneously.

The app, developed by the startup Aly, enables regular investors to track their favourite stocks for moves made by big investors such as directors or substantial shareholders.

Clemen Chiang, founder of Aly, says the main motivation for the app is to “simplify the identification and selection of stocks for the average investor who is swamped by various methods of stock-picking techniques”.

The idea behind it is a simple one: If a big investor in a firm makes a move, small investors ought to know. For instance, if a sophisticated investor buys the shares of a company at a certain price, it gives the retail investor an idea of what the smart investors believe the company is worth, says Mr Chiang.

“For example, if we could determine, let’s say, Piyush Gupta (chief executive of DBS) paid an average price of S$13.88 per share for DBS, then this price discovery will help us ‘to stand on the shoulders of giants’,” says Mr Chiang. “Imagine if we could buy at S$13.50 per share for DBS, then psychologically we have a positive edge because Piyush Gupta paid more than us. And perhaps he will do his utmost best to stay profitable.”

Mr Chiang spent 20 months and nearly S$250,000 of his own money to start the company. Its first-round funding also raised more than S$1 million.

The innovative approach to solving the asymmetrical information problem for retail investors of the stock market was what convinced judges to give Spiking the Gold award for this year’s Singapore Infocomm Technology Federation awards in the Best Innovative Start-Up – Early Stage category.

The firm has scaled up its data coverage to more than 10 stock exchanges in over eight countries, including Australia, Indonesia, the Philippines and Malaysia.

“We believe deep down that our work will have a great impact on the way people invest their money. This has the potential to change their financial destiny,” Mr Chiang says.

“Secondly, there’s a huge amount of data that we need to work on and keep working on to help investors. We are reminded of this fact during our daily scrum meetings.”

For Betty Zhou, the motivation to build her app was also for an investment, but of a different kind – helping children to invest in their education. Ms Zhou left her job as a private banker to build an app that provides students with a more efficient way to solve maths problems.

Students can send a picture of their maths problems to the app, called Miao Academy, which will, through natural language processing, help provide solutions to the problems.

The app, which was given the silver award in the SiTF Awards under the early stage start-up category, is based on machine learning which will provide better answers and perform more efficient searches over time, says Ms Zhou.

“With the rising cost of tuition and increasing student workloads, students today need a more efficient and effective means of learning. While the teachers are willing to assist students in answering questions, they may not be able to provide prompt replies to students at all times, especially during busy exam periods,” she says.

Ms Zhou, who has a degree in quantitative finance, was motivated to create the app after volunteering to give tuition to students from lower income homes. “When I was volunteering and giving tuition, I saw with my own eyes the effects that educational resource inequality can have on children,” she says.

“Much as I wanted to help, I was but one person, and though I had many ideals I was unable to truly create any change by myself. Coincidentally last year I met friends who also had similar ideals about education, so I resigned from my job at bank to start Miao.”

First appeared at TBT