REVIEW: The FSSTI lost 1.7% mom in May 21 to 3,164.28. Most sectors were in the red, apart from shipyard (+0.8% mom) and finance (flat). Notable underperformers were plantation (-8.7% mom), technology (-5.6% mom) and media (-4.9% mom) sectors.
Singapore’s industrial production grew 2.1% yoy (+1.0% mom seasonally adjusted) in Apr 21, in line with our call for a 2.3% yoy growth (+2.3% mom seasonally adjusted).
Excluding biomedical manufacturing, industrial production rose 11.1% yoy in the same month. After accounting for the Apr 21 performance, Singapore’s industrial production grew 8.4% in the first four months of 2021.
Similar to the momentum seen since the start of the year, the surge in global demand for semiconductor chips supported Singapore’s electronic and precision engineering clusters. The electronic segment expanded for the sixth straight month at 6.1% yoy in Apr 21, while the precision engineering output surged 20.4% yoy, marking the fastest growth pace since Mar 20. The media release from the Singapore Economic Development Board said precision engineering output was supported especially by the higher production of semiconductor equipment.

STRATEGY: Our 2021 year-end target stands at 3,450, implying upside of 9.0% from 31 May 21’s closing. Our top large-cap picks are DBS, OCBC, Keppel Corp, Wilmar, ComfortDelGro and Ascendas REIT. As for the small/mid-cap sector, our top picks are Food Empire and InnoTek.