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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
- Most sectors, with the exception of Property, Consumer Goods and Consumer Services, gained for the second month; with the biggest gains in the Maritime, Utilities and Tech sectors.
- Index performers were
- Sembcorp Industries (SGX:U96) (positive stock coverage),
- Yangzijiang Shipbuilding (SGX:BS6) (contract wins) and
- Singapore Exchange (SGX:S68) (increased market turnover).
- In the mid-large cap space, gainers were
- Hong Leong Asia (SGX:H22) (increased stock coverage),
- Sinarmas Land (SGX:A26) (asset disposal) and
- Sembcorp Marine (SGX:S51) (contract wins, new hydrogen cell partnership).
- Top losers were SIA (SGX:C6L) and SATS (SGX:S58) (continued travel restrictions), with Genting Singapore (SGX:G13) and Thomson Medical (SGX:A50) rounding off the respective lists.
- Institutional investors were net sellers for the last four weeks; with inflows into Financials, Consumer Cyclicals, and Technology, and outflows concentrated in Consumer Non-Cyclicals, Industrials and Property sectors.
- Retail investors were slight net buyers; their sector preferences a mirror image of Institutional’s.
- See
Key corporate news
- DBS (SGX:D05) takes 13% stake in Shenzhen Rural Commercial Bank for S$1.08bn. See DBS's announcements.
- Olam (SGX:O32) to acquire US spicemaker Olde Thompson for US$950m. See Olam's announcements.
- CapitaLand (SGX:C31) to acquire its first hyperscale data centre in China for S$757.7m. See CapitaLand's announcements.
Research reports that you should not miss
- We have initiated coverage on Hong Leong Asia (SGX:H22) with an ADD call, underpinned by strong growth in engine sales in China, and building materials in Singapore; coupled with an undemanding valuation, a potential secondary listing could unlock further value.
- We have also initiated on Aztech Global (SGX:8AZ) with an ADD; based on its current robust order book, and its strategic pivot to higher margin Internet of Things (IoT) products.
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
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Jeremy NG Choon Heng
CGS-CIMB Research
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https://www.cgs-cimb.com
2021-04-30
SGX Stock
Analyst Report
1.180
SAME
1.180
1.910
SAME
1.910
