Singapore Market July 2021 Wrap Up - CGS-CIMB Research 2021-07-30: FSSTI closed at 3166.94, Up 1.17% In July

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Singapore Market July 2021 Wrap Up - Singapore In 5

  • FSSTI closed Jul 21 at 3,166.94 points, up 36.48 points (1.17%).
  • Strong GDP and NODX data. Quarterly property numbers: Office and Industrial up, Retail down.
  • We keep our end-FY21 FSSTI target at 3,488 points, based on 0.5 standard deviation above 10-year mean 15.3x P/E.

Strong economic numbers and activity lifts industrial property rates

  • The FSSTI closed Jul at 3,166.94 points, up 36.48 points (1.17%), even as the reprieve from ‘Heightened Alert’ (HA) was short-lived.
  • 2Q21’s GDP expanded 14.3% y-o-y (-2% q-o-q SA), partly due to a low base stemming from the previous year’s Circuit Breaker.
  • NODX, however, grew 15.9% y-o-y (May: 8.6% y-o-y), easily beating our and consensus estimates, and was driven by Electronics (PCs, Integrated Circuits, and Diodes & transistors), up 25.5% y-o-y; and non-electronics, up 13.2% y-o-y, driven by Specialised Machinery, Petrochemicals and Jewellery.
  • New private home sales declined 2.2% m-o-m, according to Urban Redevelopment Authority (URA) data, due to a dearth of new project launches and Phase 2 (HA).
  • 2Q21 office rents rose 1.3% q-o-q (1Q21: 3.3% q-o-q), while vacancy rates rose to 12.6% (1Q21: 11.9%). The URA rental index for retail space fell 0.5% q-o-q, (1Q21: -4.4% q-o-q), with vacancy rates unchanged q-o-q at 8.5%. Industrial prices and rentals gained 1.8% q-o-q and 0.6% q-o-q respectively (1Q21: 1.6% and 0.3%), reflecting recovery in the manufacturing sector.

Earnings Season: Midway through, delicately poised

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Technical perspective

  • After 2 months of decline in May and June, the FSSTI finally ended the losing streak, gaining +1.17% in July.
  • Notably, the uptrend was firmly held up by the 3,100 support level and the uptrend line. Moreover, following the rebound off the uptrend line this week, the FSSTI has finally broken above the 2-week range on 29 Jul. This signals the resumption of the uptrend. Therefore, we expect the FSSTI to trend higher to target the 3,280 resistance followed by 3,380 points over the coming weeks. See chart in report attached below.
  • The near-term support remains at 3,060– 3,100 points.

LIM Siew Khee CGS-CIMB Research | Jeremy NG Choon Heng CGS-CIMB Research | https://www.cgs-cimb.com 2021-07-30
SGX Stock Analyst Report ADD MAINTAIN ADD 2.840 SAME 2.840