1H23 Singapore Market Strategy - UOB Kay Hian 2023-01-04: A Safe Harbour In A Stormy Sea

• While the China reopening story may see a short-term bullish reaction in the market, we believe that recessionary risks persist nonetheless.
• For 2023, we foreacast 6% EPS growth for large-cap stocks under our coverage, and from a top-down basis, our 2023 year-end target of 3,520 for the STI implies 8% upside from current levels. Importantly, the index’s valuations are not stretched at present, trading at 2023F P/E and P/B of 10.7x and 1.0x respectively, and paying a yield of 4.5%.

A more uncertain 2023 after a firm 2022.

• - Read this at SGinvestors.io -

Singapore has recovered well.

• - Read this at SGinvestors.io -
• We believe that the Singapore market will outperform due to the prevalence of quality, value and dividend stocks relative to its regional peers. Since there will no longer be a synchronous global cycle, country risk will return and our view is that Singapore presents a lower risk vs other countries in the region, especially given the defensive nature of a number of its listed companies. The clear risk for the market is a global recession which, given Singapore’s open economy, would negatively affect it.

Staying constructive for 1H23.

• Read more at SGinvestors.io.

Adrian LOH UOB Kay Hian Research | Singapore Research Team UOB Kay Hian | https://research.uobkayhian.com/ 2023-01-04

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