Singapore Market May 2021 Wrap Up - CGS-CIMB Research 2021-05-31: Singapore In 5

Singapore Market May 2021 Wrap Up - CGS-CIMB Research  | Singapore Stock Market

Singapore Market May 2021 Wrap Up - Singapore In 5

  • The FSSTI closed May at 3,164.28 points, down 1.68%, as Singapore tightens COVID-19 restrictions.
  • GDP almost back to pre-COVID-19 level. Inflation at a seven-year high.
  • We raise our end-2021F FSSTI target to 3,488, based on +0.5 standard deviation from 12-year mean of 15.3x P/E. Refer to Strategy Note: Singapore Strategy - CGS-CIMB Research 2021-05-31: Faith Arise for details.

GDP almost back to pre-pandemic levels

  • The FSSTI closed May at 3,221.58pts, down 53.99 points m-o-m (-1.68%) as Singapore returned to a quasi-lockdown mode mid-May.
  • The nation’s revised 1Q21 GDP expanded 1.3% y-o-y as all manufacturing sectors except biomedical strengthened; this reverses four quarters of y-o-y contractions, bringing GDP almost back to pre-COVID-19 levels of 4Q19. Headline inflation accelerated further in Apr to 2.1% y-o-y, a seven-year high (Mar: +1.3% y-o-y), driven by a rise in electricity tariffs, and transportation prices (COE and gas prices).
  • April 2021 non-oil domestic exports (NODX) decelerated to 6% y-o-y, below our and Bloomberg consensus forecasts.
    • Electronics and non-electronics products exports rose 10.9% and 4.7% y-o-y respectively (Mar: +24.4% and +9.2% y-o-y), while
    • Pharma exports were a surprise miss, declining 40.9% y-o-y (Mar: +25.5% y-o-y).
  • Apr private new home sales fell 2.6% m-o-m, according to Urban Redevelopment Authority (URA) data. According to Singapore Real Estate Exchange (SRX) data, the resale market saw a 7.9% m-o-m jump in volume, as prices rose across the board, with the Core Central Region (CCR), and Rest of Central Region (RCR) both gaining 1.2% m-o-m while Outside Central Region (OCR) prices rose 1.7% m-o-m.

Results season - positive surprises moderating

Key corporate news in May 2021.

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Straits Times Index - Technical perspective

  • With a sharp recovery playing out over the past two weeks, the FSSTI pared most of its losses in May. At one point, the FSSTI was down more than 6% in May. Nevertheless, the rebound that followed since 17 May has ushered in an uptrend.
  • Specifically, the breakout above the downtrend line of 3,145 points and 20-day moving average on 27 May signaled that the bulls are back in control.
  • With the FSSTI still trading comfortably above the 20-day moving average, expect the ongoing bullish momentum to sustain to target the 3,280-3,380 points resistance area. The near-term support at 3,100-3,145 points should continue to keep the uptrend intact if a correction takes over instead. See chart in report attached below.

LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | 2021-05-31
SGX Stock Analyst Report ADD MAINTAIN ADD 1.630 SAME 1.630