REVIEW: The FSSTI lost 4.9% mom in Nov 21 to 3,041.29. Most sectors were in the red such as land transport (-12.2% mom), finance (-5.8% mom), and plantation (-5.4% mom), while losses were partially offset by the media (+17.1%) sector.

Singapore’s industrial production expanded 16.9% yoy in Oct 21 (+2.4% mom seasonally adjusted), bucking the previous month’s contraction of 2.2% yoy (-1.9% mom seasonally adjusted). The advance was faster than Bloomberg’s estimate of a 14.5% yoy growth, as well as ours at 13.3% yoy. Excluding biomedical manufacturing, industrial production rose 9.7% yoy. Accounting for the latest data, Singapore’s industrial production grew 12.8% ytd.

The expansion was underpinned by a broad uptick in all key sectors. Growth was led by the volatile biomedical manufacturing cluster, which expanded by 56.1% yoy, the fastest growth pace in three months (Jul 21: +76.7% yoy). The pharmaceutical segment (+93.4% yoy) especially benefited from a low production base in the same period last year, although lower demand for medical devices weighed on the medical technology segment (-3.0% yoy). This is in contrast with the fall in biomedical manufacturing in Sep 21 (-35.9% yoy) against a very high base last year as Singapore responded to the high demand for
biomedical-related products on the back of the COVID-19 pandemic in Sep 20.

STRATEGY: Our end-21 target for the STI at 3,456 implies an upside of 12.0% from 30 Nov 21’s closing. Our top large-cap picks are Yangzijiang, ComfortDelGro, SingTel, Frasers Centerpoint Trust and Ascendas REIT. As for the small/mid-cap sector, our top picks are BRC Asia, Civmec and Uni-Asia Group.