Singapore Market April 2021 Wrap Up - CGS-CIMB Research 2021-04-30: Singapore In 5

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Singapore Market April 2021 Wrap Up - Singapore In 5

  • FSSTI closed Apr 21 at 3,221.58, up 1.78% m-o-m, continuing its upward trajectory for the sixth consecutive month.
  • Economic data points to sustained recovery, with positive surprise potential.
  • We keep our end-FY21 FSSTI target at 3,140 points, based on 14.2x 12-month forward P/E.

Data points to ongoing recovery; firm housing demand and prices

  • The FSSTI closed April up at 3,221.58 points, up 56.24 points m-o-m (+1.78%); its 6th consecutive m-o-m gain; boosted by the US$2tr US infrastructure stimulus package, which has the potential to boost global exports.
  • Singapore’s advance 1Q21 GDP numbers came in within our, but above consensus forecasts at +2% q-o-q (seasonally adjusted) and +0.2% y-o-y, driven by strong external demand in Manufacturing (Electronics, Precision Engineering and Biomed), and Construction.
  • March 2021 NODX (+12.2% y-o-y) exceeded our and market estimates. Export growth was centered in the electronics (+24.4% y-o-y vs +7.4 y-o-y in February), petrochem (+51.4% y-o-y vs +19.1% in February), and pharma (+25.5% y-o-y vs -33.4% in February) sectors. This was also mirrored in the March 21 IPI, which implies an upside to 1Q21 GDP numbers.
  • Sales of new private homes in March 21 surged 96% y-o-y and 100% m-o-m, in part due to a new project launch. 1Q21 private home prices rose 2.9% q-o-q (vs. 2.1% q-o-q in 4Q20). See Property Development & Inventory - CGS-CIMB Research 2021-04-15: Good Take-Up At New Launches Boosts Sales. On the back of sustained demand and price increases over the last four quarters, we see a higher possibility of new property cooling measures.
  • Office rents in 1Q21 rose 3.3% q-o-q (vs. -3.5% in 4Q20). Retail rents slid 4.4% q-o-q (vs. -5.2% in 4Q20). A bright spot was the 1Q21 vacancy rate easing to 8.5% from 8.8% previously.

The good run continues in April

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STI Technical Perspective

  • The overall momentum appears to be slowing down after the FSSTI gained 1.78% in April, following the 7.3% jump in March.
  • Despite breaking a new 52-week high at 3,217 points this week, the recent bearish price action still suggests a correction phase is likely to take over.
  • Notably, over the past two trading sessions, the weakness led to the formation of some bearish price action signals where a near-term top could have been established. Therefore, if a correction plays out, expect further downside to the 3,070 - 3,100 support area over the coming weeks.
  • Overall, we still expect the uptrend to resume near the 3,070 – 3,100 support area once the correction is completed. 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 2021-04-30
SGX Stock Analyst Report ADD MAINTAIN ADD 1.180 SAME 1.180