Singapore Market Strategy - DBS Research 2019-09-30: Back To The Negotiation Table

Singapore Market Strategy - DBS Group Research | SGinvestors.io THAI BEVERAGE PUBLIC CO LTD (SGX:Y92) KOUFU GROUP LIMITED (SGX:VL6) SHENG SIONG GROUP LTD (SGX:OV8) SINGAPORE TECH ENGINEERING LTD (SGX:S63) MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)

Singapore Market Strategy - Back To The Negotiation Table




US-China trade talks

  • This focal event will likely determine the direction of global equity markets. The latest news of US considering curbs on investments to China has raised uncertainty ahead of talks.
  • With the surprisingly weak Singapore August industrial production, a positive outcome should lift business confidence while a collapse should spell a further slowdown, raising the odds of a technical recession.


Policy decision

  • Consensus is split about a rate cut at the October FOMC meeting, and the bias is for a cut in December. Meanwhile, MAS is seen easing monetary policy by lowering the slope of the band in October.


STI’s next move hinges on trade talks

  • Singapore market currently trades at an inexpensive 12x (-1SD) 12-mth fwd PE. October’s directional trend will hinge on the outcome of US-China trade talks. Progress should see the pivotal support of c.3110 hold up with a retest of the September high at 3215 and if this resistance clears, the STI should head towards 3320 in the month/s ahead. However, if the talks collapse, expect a decline to 3030.


Back to the negotiation table



Staying positive on Singapore hospitality sector

  • We maintain our view that the hospitality sector is at the starting point of a multi-year upturn. Visitor arrivals rose 16.1% m-o-m to 1.8mil in July with a 46% m-o-m surge in Chinese tourist arrivals to 389k. The trend should continue this month with increased visitor arrivals from China during the Golden Week holiday. The recent F1 GP event drew 268k (+2% y-o-y) attendees, the second highest in the event’s 12-year history. CDL HOSPITALITY TRUSTS (SGX:J85) is our top pick.
  • Besides hoteliers, JUMBO GROUP LIMITED (SGX:42R), which is a popular tourist draw, and GENTING SINGAPORE LIMITED (SGX:G13) should also benefit from increased tourist arrivals.
  • See attached PDF for complete report.





Kee Yan YEO CMT DBS Group Research | Janice CHUA DBS Research | https://www.dbsvickers.com/ 2019-09-30
SGX Stock Analyst Report BUY MAINTAIN BUY 0.910 SAME 0.910
BUY MAINTAIN BUY 0.880 SAME 0.880
BUY MAINTAIN BUY 1.320 SAME 1.320
BUY MAINTAIN BUY 4.640 SAME 4.640
BUY MAINTAIN BUY 2.750 SAME 2.750



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