Straits Times Index marked a milestone on 2 May 2018 charting a historical day high at 3,615.28, the highest close in the last 10 years since 2008. Although subsequent profit takings brought the local benchmark down 70 over points since, UBS Research remains bullish on the Singapore’s equity market.

In a report issued this week, UBS Research stated that Singapore equity market will continue to be supported by strong corporate earnings and an improvement in the overall macro-economy. Further upside can be expected as the fundamentals of companies strengthen amidst more robust economic data, and dividends of local stocks are considered relatively more attractive in comparison to other regional markets. In addition, Singapore Dollars look set to strengthen as the Monetary Authority of Singapore tightened its policy in April and we foresee another round of tightening in October.

Singapore’s private residential property prices have staged a strong rebound pursuant to a four-year decline, rising 3.9 percent in 1Q18 which exceeded the 3.1 percent flash estimate. Non-landed property prices jumped across the board in all outside central region and core central region, while landed property prices increased by a gentler 1.9 percent.

While the earnings season is currently well under way, local banks have already stood out among the crowds by beginning the new year with stellar sets of first quarter results. We see banks as our most preferred sector in Singapore anticipating superior earnings growth on the back of lower credit costs, robust loan growth and firmer net interest margins as interest rates rise.

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UBS List of Preferred Stocks

Source: UBS Singapore Equity Preferences Report, 08 May 2018