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Concerns over Omicron, a new COVID-19 variant, sparked a selloff in global markets, while many governments announced travel restrictions from some African countries. Under the worst-case scenario, if Omicron triggers a new wave of restrictions, this could push back recovery by six to nine months.
DBS Group Research expects more downside in the immediate term for the Singapore stock market, given the uncertainty of current vaccines’ efficacy against Omicron and concerns about tightening domestic and international border restrictions. We expect short-term pressure on re-opening names in the travel and hospitality, office, retail, technology, oil and gas sectors while healthcare, medical supplies, and logistics plays should be more resilient.
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Healthcare & medical supplies players
We expect healthcare to remain resilient in the face of a new wave of COVID-19. We like top quality healthcare providers like Raffles Medical who can continue to support the government's COVID-19 efforts.
While demand for healthcare gloves has continued to grow despite the pandemic moving into the endemic phase, a new wave coud further boost demand for medical supply players like Riverstone.
Industrial S-REITs
We anticipate REITs that focus on logistics, data centres, and business parks to benefit as companies re-prioritise the adoption of e-commerce and better connectivity which will drive demand for these properties.
We believe industrial S-REITs like Ascendas REIT, Frasers Logistics & Commercial Trust, and Keppel DC REIT will be prime beneficiaries in the event of a “risk-off” trade given their proven resilience.
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