CREDIT BUREAU ASIA LIMITED (SGX:TCU)
Q & M DENTAL GROUP (S) LIMITED (SGX:QC7)
Singapore Market March 2021 Wrap Up - Singapore In 5
- The FSSTI closes March 2021 at 3,165.34 points, up 7.33% vs Feb, amidst growing market optimism as COVID-19 vaccine programmes get underway globally.
- We keep our 2021 year-end FSSTI target at 3,140 points, based on 14.2x 12-month forward P/E.
Data points to ongoing recovery.
- The FSSTI closed Mar 216.3 points higher (7.33% vs Feb) at 3,165.34 points, as COVID-19 vaccinations accelerate across the world, and with them, hope that the world has turned the corner on COVID-19 and its associated business disruptions.
- See SGX market update: STI Currently Leading World Benchmarks in 2021 YTD.
- Based on a Monetary Authority of Singapore (MAS) survey, private sector economists now expect CY20 GDP growth of 5.8% (5.5% previously) as well as improvement in the labour market, with unemployment rate forecasted at 2.9% (3% previously).
- Feb 21 NODX grew 12.7% m-o-m (4.2% y-o-y); Electronic NODX grew on the back of an expansion in Integrated Circuits, while growth in Non-Electronic NODX was underpinned by Non-Monetary Gold and Specialised Machinery.
- In Feb 21, Industrial Production jumped 16.4% y-o-y, extending the gains in Jan (9.2% y-o-y) – gains in Electronics (30.3%), Precision Engineering (15%), and Chemicals (5.2%) offset the declines in Petroleum, and Transport Engineering.
- Sales of new private homes fell 60.5% m-o-m and 33.9% y-o-y in Feb as developers held back launches over the Chinese New Year period after a torrid Jan. Average resale property prices rose 1% m-o-m (4.4% y-o-y), with the Core Central Region (CCR), rest of central region (RCR) and outside central region gaining 1.5%, 0.7%, and 1.1% m-o-m respectively.
A good month lifts ‘all’ sectors
- All sectors except Healthcare gained during the month, with the Industrial and Maritime sectors leading the pack. Index performers were Jardine Matheson (SGX:J36), Jardine Strategic (SGX:J37), and Yangzijiang Shipbuilding (SGX:BS6) (record orderbook), while SATS (SGX:S58) (recovery priced-in), Keppel DC REIT (SGX:AJBU) (trading at premium to US-listed peers) and Dairy Farm (SGX:D01) (poor results) inched just under zero.
- In the mid-large cap space, Hong Fok (SGX:H30) (undervalued according to media report), joined the Jardine companies as the biggest gainers.
- Meanwhile, Oceanus Group (SGX:579), Riverstone (SGX:AP4) (expectations of lower demand post COVID-19 vaccine), and Zheneng Jinjiang (SGX:BWM) (poor results) underperformed.
- March 2021 was marked by fund outflows for both retail and institutional investors, amidst steady trading volumes but increased turnover.
- Institutional investors sold Tech, Industrials, and Consumer Non-Cyclicals, while buying Consumer Cyclicals, Financials, and Healthcare.
- Retail investors were sellers for the whole month of Mar, with small inflows to Consumer Non-Cyclicals, REITs, and, Tech, while selling Property, Financials, Industrials, and Consumer Cyclicals.
- See
Key corporate news
- ST Engineering (SGX:S63) makes a competing bid for New York-listed Cubic Corp, at US$76/share.
- Fairfax Asia offers S$0.3535/share for Singapore Reinsurance Corp (SGX:S49).
- Jardine Matheson (SGX:J36) proposes to take Jardine Strategic (SGX:J37) private, at US$33 per share.
- CapitaLand (SGX:C31) to split its asset management business from its property development business.
Research reports that you should not miss
- We have initiated coverage on Credit Bureau Asia (SGX:TCU) with an ADD call, in view of its resilient business model (with high barriers to entry), dominant position in Singapore, and first-mover advantage in the Cambodian and Myanmar markets.
- We also initiate coverage on Q&M Dental (SGX:QC7) with an ADD, in view of its “recession proof’ dental core business and entrenched position in Singapore and Malaysia, with potential growth coming from COVID-19 diagnostic tests.
Technical perspective
- The FSSTI rallied 7.33% in March 2021, marking the 5-th consecutive month of gains since Nov 2020. However, given the strong bull market over the past couple of months, its Relative Strength Index (RSI) has also hit an Overbought high of 79 on 30 Mar, signaling that the market is ripe for a near-term correction.
- Moreover, the price weakness over the past two days near the 3,200 resistance suggests that a pullback could be happening, likely down to the 3,070-3,100 support area, after which expect the uptrend to resume as the bulls will likely be aiming for the next resistance at the 3,280-3,300 area.
- See STI chart in report attached below.
LIM Siew Khee
CGS-CIMB Research
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Jeremy NG Choon Heng
CGS-CIMB Research
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https://www.cgs-cimb.com
2021-03-31
SGX Stock
Analyst Report
1.530
SAME
1.530
0.920
SAME
0.920
