The reintroduction of Covid-19 restrictions in Singapore in the past few months dealt a blow to stocks that would have benefitted from the economy’s reopening. Despite the tightened restrictions in the second quarter of this year, our DBS Singapore economist believes GDP growth likely peaked then and should normalise going forward. The STI is likely to mirror that – continuing to trend sideways in the weeks ahead.
Amid the normalising earnings recovery trend and developing uncertainties such as Fed taper concerns, rising cost pressures, and delta variant disruptions, position your portfolio to take advantage of Singapore's transition towards a pandemic-to-endemic recovery by adopting a selective and tactical approach.
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Brighter days ahead
AEM, City Developments, Singtel and Suntec REIT have either underperformed or performed on par with the market, but look to be turning the corner towards brighter days ahead.
We expect prices to turn the corner as the outlook improves and stock prices retreat to a valuation trough.
Reopening beneficiaries
Our analysis has shown that public transport operator ComfortDelgro is the most consistent beneficiary of restrictions easing, followed by Mapletree Commercial Trust, Starhill Global, and Koufu.
For now, we prefer domestic over international-border reopening beneficiaries as Singapore begins its shift towards a Covid-endemic state.
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