Singapore Market June 2020 Wrap Up - CGS-CIMB Research 2020-6-30: Singapore In 5

Singapore Market June 2020 Wrap Up - CGS-CIMB Research | SGinvestors.io SINGAPORE PRESS HLDGS LTD (SGX:T39)

Singapore Market June 2020 Wrap Up - Singapore In 5

Tentative steps towards a ‘new normal’

  • The FSSTI closed Jun at 2,589.91 pts, up 79.16 pts m-o-m (3.15%) as Singapore lifted the circuit breaker from 1 Jun (Phase1), and further loosened movement restrictions (Phase2) as of 19 Jun.
  • Economic data is finally showing the impact of Covid-19 on the economy, as Singapore’s Apr 20 NODX fell by 4.5% y-o-y, and non-electronic exports fell 8.8% y-o-y. The biggest falls came from petrochem, food preparations and non-electric engines, while the strong electronics performance, underpinned by increased demand from work-at-home policies, dampened the decline somewhat. Biomed, a strong performer in recent months, dropped 7% y-o-y due to a high base year.
  • FY20 GDP forecast is expected to fall by 5.8% (CGS-CIMB: -4.9%), according to the latest consensus survey by the Monetary Authority of Singapore (MAS).
  • Based on Urban Redevelopment Agency (URA) data, May 20 home sales were up 75% m-o-m despite Singapore still being under the 'circuit breaker'. Increased demand was concentrated mainly in the periphery and suburban regions, as demand in the Core Central Region (CCR) fell 50% m-o-m.

General elections declared; FSSTI constituent member changes

Key corporate news

Technical perspective

  • As the FSSTI tested a key resistance level at 2,840 points, the 61.8% Fibonacci retracement level, the sharp sell-off that followed since 9 Jun suggests that the long-term trend remains bearish. The index has fallen back below the 20 and 60 day moving average since 19 Jun, showing further signs of weakness.
  • Moreover, the break below the uptrend line in the last week of Jun further highlights the growing bearish momentum. Therefore, we expect the current bearish momentum to sustain as the FSSTI likely drifts lower to the 2,500 support area. In the event that FSSTI breaks below the 2,500 key psychological level, there would likely be an acceleration in the bearish momentum with a downside target of 2,300 support.
  • On the upside, the key resistance overhead near 2,670-2,720 would likely remain as the ceiling.
  • See STI chart in PDF report attached below.

LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2020-06-30
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.570 SAME 1.570