Singapore Market Focus - DBS Research 2023-09-04: Stocks To Ride Out Sideways Volatility

• We expect the sideways volatility in July and August to continue over the next one to two months, with
  • the market upside capped by concerns over China’s slowdown and sustainability of the current US economy’s resilience,
  • the downside limited by the STI’s low valuation, and
  • - Read this at SGinvestors.io -
• We see the STI rangebound from 3,150-3,270 for another one to two months.
  • At 3,155, the valuation is well below 10.8x (-2 standard deviation) 12-month forward P/E.
  • If the correction extends towards 3,115, the valuation will reach an extreme low of 10.2x (-2.5 standard deviation) 12-month forward P/E.
  • Rebound resistance is at 3,230 and 3,265-3,277.

Events: FOMC meeting and F1.

• - Read this at SGinvestors.io -
• With strong visitor arrivals and RevPAR figures for July that should extend into August as well, the F1 Singapore Grand Prix (17 Sept) should seal a strong 3Q performance for the beneficiaries of Singapore tourism (e.g. CDL Hospitality Trusts, Far East Hospitality Trust, Genting Singapore).
• Furthermore, with the counts for August at the Sumatra hotspots being just a small fraction of what was seen in the haze years of 2019 and 2015, inbound tourism stocks can continue business as usual if 2023 turns out to be a low/no-haze year, which would help cushion the seasonal lull period post F1 till November.

7 stocks to ride out the next 2 months

• Read more at SGinvestors.io.

Kee Yan YEO CMT DBS Group Research | Fang Boon FOO DBS Research | https://www.dbs.com/insightsdirect/ 2023-09-04 SGinvestors.io

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