MONTHLY REVIEW AND OUTLOOK
REVIEW: The FSSTI gained 5.1% mom in Mar 22 to 3,419.11. For the month, all sectors were positive, led by Property (+9.6% mom), Shipyard (+9.1% mom) and Aviation (+8.8% mom), while Technology (+0.2%), Media (+0.9% mom) and Healthcare (+0.9% mom) sectors lagged the index.
Singapore’s industrial production surged 17.6% yoy (+16.6% mom seasonally adjusted) in Feb 22, surprising market expectations for a 6.3% yoy (+5.7% mom seasonally adjusted) growth. Excluding biomedical manufacturing, industrial production rose 16.8% yoy.
The strong performance in Singapore’s manufacturing sector is underpinned by the global trade recovery, especially on the back of healthy semiconductor- and biomedical-related demand. Other factors that have supported Singapore’s manufacturing momentum also include the gradual reopening of international borders, which resulted in higher levels of maintenance, repair and overhaul activity from commercial airlines.
It is the UOB economists’ view that full-year manufacturing will grow by an average of 4.0% in 2022. This suggests that despite the high-base growth rate seen in 2021, global trade activity is expected to stay buoyant in the new year.
STRATEGY: Our top large-cap picks are Yangzijiang, Thai Beverage, SingTel, Frasers Centerpoint Trust, Venture Corp and Ascendas REIT. As for the small/mid-cap sector, our top picks are Aztech, mm2 Asia and Civmec.