- Post 2Q23 results, FY23F/24F earnings forecast for Singapore stocks we cover were revised up by 1.4%/1.2% led by banks, offsetting the cuts from technology and REITs.
- For the technology sector, there is cautious optimism that 2Q23 is the inflection point with a gradual recovery from 2H23 led by AI-growth.
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#1 Bargain hunt at STI 3115-3155
- Straits Times Index (STI) component stocks are expected to register a strong earnings growth of 19.7% in FY23F before moderating to 3.6% next year. The current market correction should find support soon as the 12-month forward P/E valuation has fallen well below 10.8x (or -2 standard deviation of the average).
- STI’s support is between 3115 and 3155. We see a rebound trade towards 3230 to 3265 in September, supported by the low valuation, oversold technical readings, and past seasonal trend.
#2 Industrial heavyweights prove resilient despite market’s slower earnings growth.
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#3 Three stocks with better 2H outlook.
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