Equities have outperformed in 2021 despite concerns throughout the year about inflation, the on-going coronavirus and the latest Omicron variant, supply chain disruptions, as well as technology weakness and sell-down in China due to regulatory changes. Singapore’s Straits Times Index has also outperformed some of the larger markets in the region with gains of 10.3% by mid-December. One of the key areas of market focus heading into 2022 is likely to be on the two years old Covid-19 virus. This pandemic is unlikely to end any time soon and any new variant or new cure will have a significant impact on equities, resulting in volatility in the market. Optimism about earnings recovery led markets higher in 2021. After the sharp improvement in earnings in 2021, general market expectation is for earnings to remain healthy in 2022, but the growth rate is projected to ease off from the high levels in 2021. As near-term volatility is likely to remain, we prefer a balanced basket of stocks, and companies that are more defensive or have stable core earnings should form part of this portfolio. In Singapore, our picks are Ascendas REIT, CapitaLand Integrated Commercial Trust, CapitaLand Investment Ltd, DBS Group Holdings Ltd, Frasers Centrepoint Trust, Frasers Logistics & Comm, Mapletree Industrial Trust, NetLink NBN Trust, Raffles Medical Group, SATS Ltd, Sheng Siong Group, Singapore Telecommunications, ST Engineering, United Overseas Bank, UOL Group, Venture Corp and Wilmar International.
• Equities outperformed in 2021
• Stay invested in 2022
• Hold some defensive names with strong core earnings Investment Highlights