• The STI posted a 2.7% gain last week, in-line with the FTSE APAC Index, returning the Singapore benchmark to levels last traded 6 weeks ago on 10 June. Global stocks were led by consumer cyclicals, industrial and technology sectors over the week, which also ranked as the worst performing global stock sectors over the 2022 YTD. 

• Singapore stocks attracted S$97 million of net institutional inflows last week, with the 20 stocks that attracted the most inflows drawing S$156 million $156 million in value, with remaining Singapore-listed stocks seeing S$59 million of net outflows.

• The 20 stocks also included 8 stocks that attracted the most net institutional inflows for the 2022 YTD. These eight stocks were Singapore Telecommunications, City Developments, Keppel Corporation, Sembcorp Industries, CapitaLand Integrated Commercial Trust, Ascott Residence Trust, Sembcorp Marine, and Singapore Airlines.

STI’s Week Gains of 2.7% in-line with Region, as YTD Underperforming Sectors Led Global Stocks

Last week, the STI broke above its recent five week range-trading consolidation, ending the week up 2.7% at 3,181.34, bringing the STI back to levels last traded on 10 June. The regional FTSE Asia Pacific Index also generated an identical 2.7% return last week in SGD terms. The week’s gain saw S$97 million of net institutional inflows across the local stock market, with the 20 stocks that attracted the most inflows drawing S$156 million in value, with remaining Singapore-listed stocks seeing S$59 million of net outflows.

The 20 stocks that attracted the most net institutional inflows for the week also included eight stocks that have also attracted the most net institutional inflows for the 2022 year through to 22 July. These eight stocks were Singapore Telecommunications, City Developments, Keppel Corporation, Sembcorp Industries, CapitaLand Integrated Commercial Trust, Ascott Resident Trust, Sembcorp Marine, and Singapore Airlines. The three market themes of regional economic re-opening, global sector rotations on growth and inflation outlooks, and corporate transformative efforts to boost shareholder value have been in focus during the first half of the year.  At the same time, Singapore’s economy has continued to report above trend, albeit still uneven growth.

The full 20 stocks, which also included six non-STI stocks are tabled below.

Source: SGX, Bloomberg, Refinitiv (Data as of 22 July 2022)

IMF Maintains 3.7% Real GDP Growth and 4.8% Headline Inflation Outlook for Singapore in 2022

The STI maintains its ranking as the strongest as the strongest developed stock benchmark in the 2022 YTD with a 4.0% total return, with the FTSE Developed Index declining 14.6% in SGD terms. Beyond the benchmark however, there have been diversified performances across the myriad of sectors and industries that make up the broader local stock market.

These diversified performances have paralleled local economic developments. As the IMF noted in the Annual Country Report released Friday, despite multiple COVID waves, Singapore’s economic recovery “has been impressive, but is uneven” and that “while corporate earnings, profitability and debt servicing capacity have recovered, significant disparities in performance persist, given the differentiated COVID-19 restrictions across sectors”, with the “profitability of firms in the property and multi-industry sectors still below pre-pandemic level”. Within the real estate sector, the report highlighted that the private residential housing market, driven by strong demand, runs the risk of diverging further from fundamentals, while commercial real estate is recovering following a few slow years due to the pandemic.

For the mega drivers, the IMF noted that Singapore’s real GDP is expected to grow 3.7% this year (as compared to 2021’s +7.6%) driven by ‘pent-up demand as the economy reopens and border restrictions are further eased on the back of the high vaccination while trade-related sectors may see some moderation amid a potential capacity constraint of the global electronics industry and consumer-facing sectors are expected to rebound as the economy reopens, and the construction sector is also expected to further recover as border restrictions on migrant workers ease.

Over the medium term, the IMF project Singapore’s real GDP growth to converge to 2.5%. Meanwhile the IMF project headline inflation to rise to 4.8% in 2022, before moderating to 2.5% in 2023, with MAS core inflation reaching 3.0% in 2022 and 2.0% in 2023. The MAS, in its July Monetary Policy Statement, forecast core inflation of between 3-4% this year (vs. earlier forecast of 2.5-3.5%) with CPI-all items inflation expected to come in at 5-6% (higher than earlier forecast range of 4.5-5.5%).