Singapore Market Focus - DBS Research 2024-03-13: 3 Strategies To Navigate A Rangebound Market

Singapore Market Focus - 3 Strategies To Navigate A Rangebound Market

Published:
Singapore Market Focus - DBS Research | SGinvestors.ioYangzijiang (SGX:BS6) SINGAPORE TECH ENGINEERING LTD (SGX:S63) KEPPEL LTD. (SGX:BN4) COMFORTDELGRO CORPORATION LTD (SGX:C52)
  • Earnings of Singapore stocks under our coverage were revised downwards by 5.4% in FY23 and 1.6% in FY24F, led by drags in real estate, industrials, and telcos, while banks remain stable. Pockets of positive revisions to FY24F earnings are found in the industrials and technology sectors.
  • - Read this at SGinvestors.io -

STI rangebound between 3,030-3,300.

  • We maintain our 2024 year-end target of 3,485 for the STI, pegged at 11.3X (-1.5 standard deviation) FY25F P/E. The STI’s attractive valuations and above 5% dividend yields are factors that offset a muted earnings growth outlook.
  • STI is likely to be rangebound between 3,030 and 3,300 in the coming months, with a recovery towards the latter figure possibly ahead of the index stocks going ex-dividend.
  • - Read this at SGinvestors.io -

3 takeaways from FY23 results season

1. Prefer industrials and technology for earnings visibility.

  • We seek out opportunities in stocks with earnings resilience amid negative earnings revisions in the wider market. Average FY24F/25F earnings growth of above 10% is also attractive as we enter a prolonged period of muted earnings growth, with STI earnings growth forecast at around 3%.
  • Double-digit average earnings growth for Yangzijiang Shipbuilding (SGX:BS6) and ST Engineering (SGX:S63) is underpinned by their robust orderbooks. We take comfort in our analysts’ recent positive earnings revisions for Keppel (SGX:BN4) and ComfortDelGro (SGX:C52) on their improving and steady earnings bases.
  • Earnings recovery for selected technology stocks UMS (SGX:558) and Venture Corp (SGX:V03) should pan out under an improving industry outlook, with a potential boost from the ongoing AI boom.

2. Stick to REITs as the Fed pivot continues to play out.

  • Read more at SGinvestors.io.




Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.




Fang Boon FOO DBS Group Research | Kee Yan YEO CMT DBS Research | https://www.dbs.com/insightsdirect/ 2024-03-13



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