August 2019 Wrap Up - CGS-CIMB Research 2019-09-02: Singapore In 5 Minutes

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August 2019 Wrap Up - Singapore In 5 Minutes




Weak economic data; 2019F GDP revised to 0.5%

  • The FFSTI closed at 3,101.68 pts on 30 Aug, down 5.88% from 31 Jul, as trade tensions escalated between US-China and Japan-South Korea, while ongoing protests in Hong Kong led to fears of exacerbating tensions between China and the more liberal countries. See Performance of Straits Times Index (STI) Constituents in August 2019.
  • Final GDP growth for 2Q19 was unchanged at 0.1% y-o-y while seasonally-adjusted annualised reading (SAAR) fell 3.3% q-o-q. All sectors declined: electronics (-10% y-o-y), precision engineering (-3.4% y-o-y), chemicals (-0.3% y-o-y), and transport engineering (-5%). Domestic weakness also appeared, with slower growth in private consumption and private investments, while the services sector was weighed down by declines in retail and wholesale trade.
  • Our economist has recently revised down our end-2019 GDP forecast to 0.5% (1.8% previously), and she expects the Monetary Authority of Singapore (MAS) to set a more accommodative stance in the S$NEER in Oct.
  • Developers sold 1,178 private homes in Jul 19, up 43.5% m-o-m, but down 31.7% y-o-y. Condominium rental stemmed two months of decline, rising 0.8% m-o-m and 2.7% y-o-y, with prime apartments in the core central region (CCR) posting the largest increase of 1.1%, followed by the suburbs or outside central region (OCR) with 1% growth, and the city fringes or rest of central region (RCR) up 0.3%.


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Technical perspective – bearish trend gaining strength

  • With the sharp selloff of 7.4% in Aug, the STI has effectively turned into a bearish trend. More importantly, the break below the 3,100 psychological support in late-Aug formed a new lower low point at 3,040, further validating the downtrend.
  • Despite the recent rebound to the 3,050 support, the STI would likely remain depressed in the downtrend with the 3,100-3,150 resistance acting as a ceiling. Moreover, the recent rebound still appears weak as shown by the bearish rejection near the 3,100 resistance. In the near term, the STI could be targeting the 3,000-2,960 support.
  • A further break below this support would lead to another sharp selloff to the 2,860 support.
  • See also Straits Times Index STI Constituents Target Price.





LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2019-09-02
SGX Stock Analyst Report ADD MAINTAIN ADD 1.170 SAME 1.170
ADD MAINTAIN ADD 1.010 SAME 1.010
ADD MAINTAIN ADD 0.600 SAME 0.600
ADD MAINTAIN ADD 0.950 SAME 0.950



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