SINGAPORE MARKET HIT, BUT SOME BRIGHT SPOTS
Singapore’s key Straits Times Index (STI) fell 7.5 per cent to 3,540.5 on Monday, clawing back some losses after slumping as much as 8.5 per cent at the open.
DBS analysts have revised their year-end STI target to 3,855, down from 4,080, citing continued volatility.
The biggest losers so far include Singapore’s big three banks, with DBS tumbling 9.3 per cent to S$39.28, OCBC falling 6.9 per cent to S$15.47 and UOB slipping 6.3 per cent to finish at S$33.23 on Monday.
Financials are under pressure globally due to potential slower growth and compressed net interest margins, said Maybank analyst Thilan Wickramasinghe.
Even with the recent pullback, there has not been a rush to exit local bank stocks, which are typically held by long-term investors for their stability and consistent dividends, said CMC Markets’ Ms Tan.
“The recent dip may even present a buying opportunity for some, with valuations becoming more attractive amid ongoing market volatility,” she said.
Outside the financial sector, DBS analysts also favour defensive stocks such as consumer staples and utilities. Their picks include Sheng Siong Group, DFI Retail Group, Singtel and ComfortDelGro.
Real estate investment trusts or REITS have also drawn interest, with their contractual rental income helping the sector stay resilient, said Mr Darren Chan, senior research analyst at Phillip Securities Research.
“With solid operating fundamentals and the growing likelihood of further Fed rate cuts, REITs are poised to outperform in a downturn.”
Mr Wang from Morningstar also noted that locally listed REITS showed resilience back when tariffs were implemented by Trump during his first term and put up a swift recovery in 2019.
Ms Tan said industrial REITs may potentially outperform office, retail, hospitality and healthcare REITs due to strong demand from e-commerce and logistics, stable long-term leases and lower sensitivity to interest rates.
