Singapore’s equity-market story remains more about stock-picking than country preference, Macquarie says. “Overall, valuations remain reasonable, if not slightly on the cheap side, while liquidity and technical risks associated with positioning and momentum are acceptable. Still, given that this is one of Asia’s most open economies and hence substantially sensitive to global activity levels, the outlook for growth is not certain.”
It adds, while domestic consumption resilience is picking up the slack even as global trade softens, it may be a double-edged sword as the domestic economy risks overheating. It keeps the market at Neutral. It tips seeking companies which are persistent, self-funded growers able to add shareholder value over the medium-term, tipping several of these “compounders” can be found at reasonable valuations across the industrial and REIT segments. While Singapore’s consumer-staples segment appears cheap from a historical perspective, the group is mostly battered agri-businesses exposed to weak CPO prices, it says.
Its Singapore picks are UOB, SembMarine, Sembcorp, CapitaMall Trust, Keppel REIT, MLT, CDL Hospitality, STX OSV and ARA Asset.
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