- We maintain our STI year-end target of 4,430, pegged to 13.8x (+0.5 standard deviation) FY26F P/E.
- Singapore equities continue to offer a haven amidst tariff and geopolitical uncertainties. We foresee the benchmark underpinned by five key factors:
- - Read this at SGinvestors.io -
- an attractive dividend yield of ~4.5%/4.7% over FY25F/FY26F;
- a P/B of 1.4x, which remains attractive among global developed markets;
- sustained net global liquidity inflow that rose to ~US$1.68bn as at 17 September; and
- seasonal behaviour, suggesting a possible basing in Oct before entering a typically stronger seasonal period from November to April.
The pullback before the year-end rally
- We expect the recent pullback of the Straits Times Index (STI) from 4,375 to find support at 4,250 (23.6% retracement, considered more likely) or 4,175 (38.2% retracement, considered less likely).
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- an enhanced GEMS research scheme, designed to improve visibility for under-researched small caps; and
- potential details on a “Value Unlock” package for SMCs.
- Regarding macroeconomic developments, investors will be closely monitoring any news concerning US-China trade talks ahead of the scheduled 10 November deadline for the 90-day tariff extension. Any developing news suggesting a positive trade negotiation outcome could serve as a catalyst to trigger a rally in regional markets.
October key events – MAS policy meeting and China’s Plenum in focus
- Read more at SGinvestors.io.
