Singapore Market December 2020 Wrap Up - CGS-CIMB Research 2020-12-31: Ending The Annus Horribilis On A Positive

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Singapore Market December 2020 Wrap Up - Ending The Annus Horribilis On A Positive

  • STI closed the year at 2,843.81 points (+1.3% m-o-m).
  • Resurgence of COVID-19 in other countries crimped exports.
  • Reiterate our 2021 year-end STI target of 3,068 points, based on 14.2x forward P/E.

Ending the annus horribilis on a positive

  • The STI closed Dec at 2,843.81 points, up 37.9 points (+1.3%) m-o-m, as the initial exuberance of a working COVID-19 vaccine was tempered by the emergence of a new, more contagious virus strain. This is about 12% lower y-o-y, but still approximately 27% above the 2,233.48 index-low in late-Mar 20.
  • 4Q20F GDP is expected to contract by 4.5% y-o-y, according to a poll of private sector economists by the Monetary Authority of Singapore.
  • Official forecast has FY20 GDP down 6-6.5% y-o-y (CGS-CIMB: -5.7%). Nov 20 NODX declined 4.9% y-o-y (-3.1% y-o-y in Oct), dragged by petrochemicals, pharmaceuticals, and electronics, as the ‘third wave’ of COVID-19 dampened external demand.
  • Among our trading partners (which account for 32% of Singapore’s NODX), the EU (-24.6% y-o-y in Nov vs. +0.8% y-o-y in Oct), China (-18.4% y-o-y in Nov vs. +5.0% y-o-y in Oct), Indonesia (- 10.9% y-o-y in Nov vs. -10.7% y-o-y in Oct) and South Korea (-9.0% y-o-y in Nov vs. -13.0% y-o-y in Oct), experienced the biggest drops.
  • Nov 20 property sales rose 19% m-o-m as more new projects were launched, reversing Oct’s decline from the government clampdown on the issuance of Options to Purchase (OTPs).

Sector round-ups and fund flows

Key corporate news in December 2020

Research reports on outlook of 2021 that you should not miss

Technical perspective

  • Dec saw the STI trading sluggishly, within a consolidation range of around 2%, but the immediate rebound off the 2,800 support area and 20-day moving average further validated the uptrend strength.
  • Note that the bullish crossover signal between the 20-day and 60-day moving averages on 10 Nov first hinted at the start of the bullish trend. Multiple bullish price actions were later identified near the 2,800 support area in Dec, showing some signs of strength.
  • More importantly, the rebound on 30 Dec broke above both the pullback line and the 20-day moving average, suggesting the resumption of the uptrend. Thus, we expect the STI to trend higher to test the 3,000 to 3,100 resistance area over the coming weeks before seeing some correction. The 2,800 support area could be the new floor for this uptrend. See chart in PDF report attached below.

LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2020-12-31
SGX Stock Analyst Report ADD MAINTAIN ADD 1.250 SAME 1.250