Singapore Market Sep 2021 Wrap Up - CGS-CIMB Research 2021-09-30: STI Closed At 3086.7, Up 31.65 (1.04%)

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Singapore Market Sep 2021 Wrap Up - STI Closed At 3086.7, Up 31.65 (1.04%)

Stop-start reopening. Growth decelerating.

  • The FSSTI closed Sep at 3,086.7pts, up 31.65pts (1.04%), even as rising COVID numbers put a damper on reopening, with tighter restrictions reimposed.
  • Global markets were spared a repeat of 2013’s taper tantrum when the US Fed revealed the roadmap to withdraw pandemic stimulus; however, a new dark cloud looms as US debt-ceiling drama re-emerges.
  • NODX continued its ninth consecutive month of y-o-y gains, up 2.7% y-o-y in Aug (12.7% in Jul), although it was below our and consensus estimates.
    • Global shortage of semiconductors continue to drive growth in Electronics NODX, which rose by 16.7% y-o-y in Aug (+15% y-o-y in Jul); top segments were
      • integrated circuits (ICs) (+20.2% y-o-y),
      • diodes & transistors (+35.5% y-o-y) and
      • part of ICs (+116.6% y-o-y).
    • Non-electronic NODX contracted by 1.4% y-o-y (vs. +12.1% y-o-y in Jul), due to declines in
      • non-monetary gold (-66.4% y-o-y),
      • food preparations (-27.1% y-o-y) and
      • pharmaceuticals (-12.4% y-o-y).
  • A reversion to tighter COVID-19 restrictions led to lower sales of new developments in Aug (-3.4% y-o-y and -23.5% m-o-m), according to Urban Redevelopment Authority data, even as sales continued to outpace new launches. Private resale home prices, according to Singapore Real Estate Exchange (SRX), rose 0.5% m-o-m and 6.4% y-o-y in Aug, led by higher prices in the Core Central Region (CCR) and Outside Central Region (OCR).

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Technical perspective

  • The FSSTI traded within a tight range of 70pts in Sep with a slight bullish bias. Notably, the key cluster of support at the 3,050 level and 200-day moving average managed to halt the selloff in Sep and kept the uptrend intact. More importantly, the recent rebound off the cluster of support since 21 Sep could be establishing a double bottom formation.
  • For further confirmation of a bullish rebound, watch for a breakout above the 3,100 level for the next up-leg to begin where the bulls will likely be targeting the 3,200 resistance followed by 3,280pts.
  • On the other hand, if the weakness persists, we believe the cluster of support at the 3,020 – 3,050 range will continue to hold.

LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2021-09-30
SGX Stock Analyst Report ADD MAINTAIN ADD 1.020 SAME 1.020