Phillip Securities is Overweight Asean equities, preferring the Philippines, Thailand and Singapore. “In view of downside risks arising from the G-2 fiscal front, Asean is likely to maintain its outperformance, barring unravelling of political risks (particularly in Thailand, Malaysia and Indonesia).”
It expects Asean and emerging markets, which it estimates contribute more than 60% of STI EPS, will likely provide support for Singapore equities amid the developed-market slowdown; it notes the MSCI Singapore’s around 3.5% dividend yield.
Within Singapore, “construction and marine and offshore engineering equities should continue to do well. REITs are also likely to be a key beneficiary in global search for yield.” But it expects external-oriented industries, such as the electronics manufacturing cluster and wholesale trade, will be weighed by sluggish external demand.
It expects Singapore electronics manufacturing to remain lacklustre at best as it is geared toward PC production where demand has been sluggish, noting the city-state isn’t “plugged in” to the tablet and smartphone value chain.
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