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Singapore Market November 2020 Wrap Up - CGS-CIMB Research 2020-11-30: Singapore In 5

Singapore Stock Strategy - CGS-CIMB Research | SGinvestors.io DBS GROUP HOLDINGS LTD (SGX:D05) OVERSEA-CHINESE BANKING CORP (SGX:O39) UNITED OVERSEAS BANK LTD (SGX:U11) SINGAPORE AIRLINES LTD (SGX:C6L)

Singapore Market November 2020 Wrap Up - Singapore In 5




3Q20 GDP contracts less severely than expected; optimism growing

  • The Straits Times Index (STI) closed November 2020 at 2805.95, up 382.11 or 15.8% m-o-m, amidst growing optimism on the global economy – US voters limited Trump’s presidency to a single term, and news of two potential viable COVID-19 vaccines.
  • Singapore’s GDP contracted at a slower rate of 5.8% y-o-y in 3Q20, against the government’s advance estimates of -7.0% y-o-y, bolstered by export-oriented biomed and electronics segments which offset weaker service and construction segments.
  • Oct NODX, however, contracted for the first time since May 2020 (-3.1% y-o-y) as Huawei sanctions and lockdowns in regional trading partners hurt Singapore exports.
  • Property sales declined further, down 51.7% m-o-m in Oct, due to a government clampdown on the re-issuing of options to purchases by developers, amidst few new project launches. See


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Technical perspective

  • Since the bullish crossover signal between the 20-day and 60-day moving average was triggered on 9 Nov (see Fig1 in PDF report attached below), the Straits Times Index (STI) has been trending higher with surging momentum.
  • The breakout above multiple key resistance levels have also effectively turned the trend bullish. However, in the next couple of weeks, the STI could enter a correction phase as the bullish momentum appears overstretched.
  • The 15.8% rally in Nov has driven the STI’s Relative Strength Index (RSI) to an extreme overbought high of 83. Historically, the STI tends to enter into a period of correction when the RSI exceeds the 70 overbought level. Therefore, we expect the ongoing correction to take the STI down to the 2,635 – 2,700 support level before the uptrend resumes.
  • The next leg higher into the uptrend will likely see the FSSTI aiming for the 3,000 – 3,044 resistance.





LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2020-11-30
SGX Stock Analyst Report ADD MAINTAIN ADD 28.350 SAME 28.350
ADD MAINTAIN ADD 12.520 SAME 12.520
ADD MAINTAIN ADD 27.720 SAME 27.720
ADD MAINTAIN ADD 4.570 SAME 4.570



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