Despite the backdrop of interest rate hike cycle from the Fed, S-REITs managed to make a good year-to-date run. Total return of S-REITs was 24.9 percent year-to-date, according to CIMB. The sector’s strong performance was due to the narrowing of yield and yield spread.
Singapore’s property developers are close to finishing the year as one of the top performers in Singapore’s market. The property sector is up by 30 percent year-to-date. DBS feels that improving macro factors will continue to support Singapore’s property, which will in turn drive share prices of developers.
With 2017 coming to a close, it is time to relook and review your portfolio once again. For some, this is a once in a year exercise that could make or break their investment performance. Thus, it is a grand exercise that requires all the research you can find to help you make the best investment decisions.
The offshore and marine (O&M) sector has been overlooked for most of 2017 as negative sentiments gripped the market owing to the low oil price. However, with oil prices recovering year-to-date, CIMB believes that it is time to review the sector. According to CIMB, the O&M sector is prime for a re-rating.
If you are thinking of investing in 2018, then heads up. According to DBS, Singapore is one of its most recommended market to invest in 2018. DBS believes that the Singapore market has a strong mix of earnings growth, low valuation and good dividend yield among the ASEAN markets. Moreover, based on the MSCI Singapore Index valuation of 14 times price-to-earnings (PE), Singapore is one of the most attractive markets in the world, not just in ASEAN.
2018 will be the year where Singapore’s economy recovery will broaden from the manufacturing sector to the rest of the economy, according to DBS. DBS believes that this turn in tide for Singapore’s economy is both powerful and sustainable.
Heading into 2018, DBS believes that one of the most compelling investment theme is growth stocks that are reasonably priced (GARP). DBS notes that Singapore is on track for sustainable recovery. This should support the continuity of corporate earnings growth in the 8.5 percent region in the next two years.
The Kuala Lumpur Composite Index (KLCI) will continue to head higher in 2018, according to CIMB’s analysis. CIMB’s end-2018 target for KLCI is 1920, which represents an 11 percent upside to its last close. There are a few particular segments that CIMB recommends for investors with stronger risk appetite.
Singapore’s property market is on the verge of an uptrend, according to Morgan Stanley. Analysts at Morgan Stanley expects Singapore’s property prices to climb by as much as eight percent in 2018. Along with other research houses, Morgan Stanley believes that developers' valuations are attractive based on their current discount to net asset value.
3Q17 results season among Malaysian companies was a disappointment. Out of 128 companies that were tracked, 37 percent missed consensus expectations, higher than the 35 percent that missed consensus earnings in the last quarter results season. Companies whose results were in line with CIMB’s expectations fell from 56 percent to 48 percent.