Singapore bullish about 2018

Singapore’s stock market could see gains of as much as 11 per cent next year, according to market analysts.

The Straits Times Index (STI) has recorded some year-on-year gains of about 20 per cent, in excess of predictions on the back of outperformance in property and banking stocks and a wider economic recovery.

Apart from a continued recovery in corporate earnings, forecasts pointed towards a stable currency leaning on the upside amid expectations of monetary policy tightening will be an “added ingredient” for equities to exceed expectations.

The Singaporean colocated, or outsourced, data centre market generated an estimated US$934 million this year, according to a Structure Research study.

The Canadian firm said the figure was projected to grow 13 per cent next year and eventually hit US$1.5 billion by 2021.

In more good news for the republic, the Singaporean market offered the lowest valuation, highest dividend yield and decent earnings growth compared to the rest of Asean, DBS analysts said.

OCBC investment boss Carmen Lee expected further rises in the STI next year.

“We see further upside ahead but not in the same quantum as 2017. After a high base, it’s almost impossible for the market to see two consecutive years of strong growth,” Lee added.

Exports continued to record growth last month, but eased from October’s surprise showing due to high base effects from a year ago.

Shipments to the majority of the city-state’s top markets rose in November, led by China, South Korea and the USA.

Non-oil domestic exports (NODX) rose 9.1 per cent year on year in November, down from the eye-watering, revised 20.5-per-cent growth in October.

The NODX figures for last month beat Reuters growth estimates of 5.5 per cent.

On a month-on-month seasonally adjusted basis, NODX rose by 8.7 per cent last month, after October’s 12.3-per-cent increase.

Both electronic and non-electronic exports increased year on year last month with electronic shipments going up 5.2 per cent from a year ago, after a 4.5-per-cent increase in October.

The STI could also be looking at gains of between 8 to 10 per cent with the property market offering healthy potential yields in 2018.

Maybank’s Neel Sinha said the “progressively improving” domestic property market was eased by property cooling measures in March.

Large-scale developers such as the UOL Group and City Developments reportedly surged by 39 per cent and 47 per cent, respectively, since January.

 

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