Singapore Market March 2020 Wrap Up - CGS-CIMB Research 2020-03-31: Singapore In 5

Singapore Strategy - CGS-CIMB Research | SGinvestors.io SINGAPORE AIRLINES LTD (SGX:C6L)

Singapore Market March 2020 Wrap Up - Singapore In 5

  • It feels as if many past crises (SARS, GFC, oil price crash) were compressed in a month. Global markets retreat as Covid-19 spreads; FSSTI -17.6% m-o-m.
  • We keep our end-CY20F FSSTI target at 2,050, based on CY21F P/E of 9.5x (average during GFC).
  • With no definite end to Covid-19 in sight, FSSTI's near-term outlook is negative. Our view is to Sell into strength.



Governments scramble to contain Covid-19, stem economic impact

  • The FSSTI closed Mar at 2,481.23pts, down 17.6% m-o-m (-530pts), just as governments around the world simultaneously try to control the spread of Covid-19, and buffer the resultant economic fallout. Oil prices suffered a double blow, as the three-year supply limit deal between OPEC and non-OPEC members collapsed. The Brent dipped to US$23 (a level last seen in 2002).
  • Singapore’s economy contracted 10.6% q-o-q SAAR in 1Q20, driven by sharp downturns in construction and services due to Covid-19. The Singapore government revised its official GDP forecast for 2020 downwards -- it now expects 1-4% contraction (CGS-CIMB: -2.6%).
  • A second round of fiscal stimulus worth S$48bn (supplementing the initial S$6.4bn) was announced. See report: Singapore Strategy - CGS-CIMB 2020-03-28: Measures To Cushion Impact, Not Turnaround
  • MAS also weakened the S$, by reducing the S$NEER slope of appreciation to 0%, and re-centring the mid-point to the prevailing rate.
  • According to Urban Redevelopment Authority (URA), new home sales rose 57.3% m-o-m in Feb, due to the low base in Jan. In contrast, Singapore Real Estate Exchange (SRX) data show Feb resale prices for non-landed private residential properties in Singapore declining 0.8% y-o-y, while volume fell 13.1%. By region, prices in the rest of central region (RCR) fell 0.8%, while prices outside central region (OCR) fell 1.3%; resale prices in the core central region (CCR) was more resilient, falling a marginal 0.1%.


Negative overall sentiment; small bounces



Key corporate news



Technical perspective

  • Following the bearish break below the triangle in early-Mar, the bearish momentum accelerated, resulting in the FSSTI falling a whopping 17.6% in Mar. More importantly, the sharp selloff in the past six weeks has turned the market sentiment extremely bearish.
  • Despite a recovery in the last week of Mar, we believe the rebound is only a pullback before the downtrend resumes. Therefore, we expect the overhead resistance at 2,520-2,600 to limit the upside.
  • The downtrend would likely resume near the 2,520-2,600pts resistance to target the 2,200pts support, and then the 2,000pts support. See chart in attached PDF report.
  • (See also Straits Times Index STI Constituents Target Price)








LIM Siew Khee CGS-CIMB Research | Singapore Research Team CGS-CIMB Research | https://www.cgs-cimb.com 2020-03-31
SGX Stock Analyst Report HOLD MAINTAIN HOLD 6.27 SAME 6.27



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