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Singapore Market Strategy - Maybank Research 2022-06-03: Fishing In Troubled Waters

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Singapore Market Strategy - Fishing In Troubled Waters


Screening for defensives as macro shocks loom




Little fires everywhere

  • Emergent trends of COVID re-openings globally is lifting growth. However, crosswinds from the Russia-Ukraine war, China’s COVID Zero strategy and global monetary tightening is threatening to derail this.
  • MIBG’s Macro Team points to three major shocks that could undercut recovery and increase uncertainty. These include
    1. rising inflation shocks thanks to higher commodity prices, supply bottlenecks
    2. interest rate shocks
    3. recession shocks particularly from an overzealous Fed battling inflation.
  • These are already lowering earnings visibility and increasing market fear, which may get worse before getting better.


Screening for defensives

  • In this backdrop, Singapore has held up well, outperforming the SPX by 16% year-to-date. Strong balance sheets, potential for M&A and a highly vaccinated population are likely driving this defensiveness.
  • We screen the Singapore stock market to shortlist stocks that offer the most defensiveness under 3 factors:
    1. net cash balance sheets, which should limit the impact of rising interest rates,
    2. rising dividend expectations, and
    3. increasing levels of share buybacks - a potential signal on focus on shareholder returns and management confidence.
  • We also screen for companies where insiders are buying more now vs last year.


Conviction matters



  • See the complete list in report attached below.





Thilan Wickramasinghe Maybank Research | Li Jialin Maybank Research | https://www.maybank-ke.com.sg/ 2022-06-03
SGX Stock Analyst Report BUY MAINTAIN BUY 1.070 SAME 1.070
BUY MAINTAIN BUY 1.130 SAME 1.130
BUY MAINTAIN BUY 1.450 SAME 1.450



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