Singapore Market Jan 2021 Wrap Up - CGS-CIMB Research 2021-01-29: Singapore In 5

Singapore Market - CGS-CIMB Research | SGinvestors.io GKE CORPORATION LIMITED (SGX:595) JIUTIAN CHEMICAL GROUP LIMITED (SGX:C8R)

Singapore Market Jan 2021 Wrap Up - Singapore In 5

  • The FSSTI closed Jan 21 up 2% m-o-m at 2,920.5 points. The main drivers were vaccine rollouts and the new US administration.
  • Positive surprise from economic data. Private home prices hit an 8-year high. Retail and office vacancy rates improved slightly, amidst falling rents.
  • We keep our 2021 year-end FSSTI target of 3,068 points, based on 14.2x forward P/E.



Promising start to the year, data surprises on the upside

  • The FSSTI closed Jan 21 at 2,920.5 points, up by 58.7 points (2%) m-o-m. Markets rose, briefly flirting around the 3,000 points mark, on the back of COVID-19 vaccine rollouts, and the handover to the Biden Administration in the US. Sentiment, however, was tempered in Europe as many nations headed back into lockdown post-new year, following the spread of a new, more contagious virus variant.
  • Singapore’s Dec 20 NODX came in at 6.8% y-o-y (-5% y-o-y in Nov 20), above our (-6.1%) and consensus (-0.7%) expectations, due to gains in non-electronics (+5% y-o-y, -5.3% Nov 20); petrochemicals (+11.5% y-o-y), electrical circuit apparatus (+12.3% y-o-y) and electrical machineries (+29.8% y-o-y), and a pickup in electronics (+1.7 y-o-y vs -45 y-o-y Nov 20).
  • Dec 20 IPI rose 14.3% y-o-y (18.7% y-o-y in Nov 20), driven by electronics (+41.8% y-o-y), chemicals (+12.3% y-o-y) and precision engineering (+11.0% y-o-y), which offset weakness in biomed (-13.2% y-o-y) and transport engineering (- 31.5% y-o-y).
  • Private home sales rose by 57% m-o-m in Dec 20, as prices hit eight-year highs on the back of pent-up demand and supported by low interest rates.
  • Retail rents fell 14.7% y-o-y in 2020 (+2.9% y-o-y in 2019), posting a drop in vacancy rate from 9.6% (3Q20) to 8.8% (4Q20).
  • Rents for office space fell 10.7% y-o-y in 2020 (+0.2% y-o-y in 2019); while vacancy rate inched down to 11.8% in 4Q20 (12% in 3Q20).


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Technical perspective

  • Since the FSSTI hitting the 3,000 psychological ceiling in early Jan, the failed attempts to break above the 3,000 resistance level has led to the current phase of correction. With the FSSTI falling back below the 20-day moving average, sentiment has also turned slightly bearish signalling further pressure to the downside in the coming weeks.
  • Nevertheless, we expect the near-term support at 2,800 area to hold and turn the trend back into the bullish camp.
  • For the next rebound, the FSSTI will likely be aiming for the 3,000 – 3,100 resistance again.





LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2021-01-29
SGX Stock Analyst Report ADD MAINTAIN ADD 0.184 SAME 0.184
ADD MAINTAIN ADD 0.145 SAME 0.145



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