Singapore Market March 2021 Wrap Up - CGS-CIMB Research 2021-03-31: STI Closes At 3,165.34, Up 7.33% Vs Feb

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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.
  • 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

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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 | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2021-03-31
SGX Stock Analyst Report ADD MAINTAIN ADD 1.530 SAME 1.530