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

DELFI LIMITED (SGX:P34)

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

FSSTI closed Sep at 3,086.7pts, up 31.65pts (1.04%), despite a resurgence in COVID-19 cases, necessitating a reimposition of tighter restrictions.
We keep our end-2021F FSSTI target at 3,496, based on +0.5 standard deviation above 12-year mean of 15.2x P/E.
Our top picks are:

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).

Property, Technology and Telecommunications were the outperforming sectors in Sep, while Healthcare and Maritime lagged.
The FSSTI outperformers were
- CapitaLand Investment (SGX:9CI),
- Hongkong Land (SGX:H78) (share buyback) and
- SingTel (SGX:Z74) (asset disposal, growth prospects of Bharti).
The FSSTI underperformers were
- Yangzijiang (SGX:BS6) (pullback from highs),
- ComfortDelGro (SGX:C52) (resumption of tighter COVID-19 restrictions) and
- Venture Corp (SGX:V03) (component shortage).
In the mid-large cap space,
- outperformers were Oceanus (SGX:579) (exit from SGX watchlist), and Hutchison Port Holdings Trust (SGX:NS8U) (recovery from low),
- Riverstone (SGX:AP4) (falling glove ASPs), and Haw Par (SGX:H02) joined the losers.
Institutional investor flows were slightly positive in the preceding four weeks; with money moving into REITs and Telcos, and exiting Financials.
Retail inflows extended to eight consecutive weeks; with flows to Industrials, REITs, Healthcare, Financials and Consumer Non-cyclicals, and disposals in Property and Telcos.
See

Consortium led by chairman and CEO offers S$0.45 per share to privatise Roxy-Pacific (SGX:E8Z).
CapitaLand (SGX:C31) delists; splits into private development arm and relists its fund-management and property-investment business under CapitaLand Investment (SGX:9CI).

In our inaugural ESG report, we take a look at the current ESG landscape in SG and introduce our picks.
We also initiate coverage on Delfi (SGX:P34) with an ADD and a target price of S$1.02, underpinned by strong growth potential in Indonesia and based on attractive valuations. See
- Delfi - CGS-CIMB Research 2021-09-10: Sweet Delight, More Than A Chocolate Company
- Delfi - CGS-CIMB Research 2021-09-28: Biding Time For Growth.

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