DBS Group Research analysts Yeo Kee Yan, Foo Fang Boon, Moxy Ying, Chanpen Sirithanarattanakul and Maynard Priajaya Arif sees a “volatile” year ahead of regional equities. This is due to tariff wars, an unpredictable trade deal negotiation process, a conflicted US Federal Reserve and ambiguity around China’s stimulus plan. As such, investors should expect to see market swings as they respond to US President-elect Donald Trump’s policies in the coming months.
That said, DBS’s economists are remaining optimistic about Asia’s ability to navigate Trump’s second term in office due to the region’s strong ties with US and China and strong global demand for Asian-manufactured goods and commodities.
Among the emerging markets (EMs), the analysts prefer the Philippines, Indonesia and Thailand in that order.
“We raised Philippines’ outlook to positive as we like the country’s improving economic outlook and attractive growth and valuations,” they write in their Jan 2 report.
The analysts also keep its positive outlook for Indonesia with its large domestic market and strong expected GDP growth of 5.2%.
At the same time, the analysts have lowered their outlook for Thailand to “neutral” considering its relatively weaker GDP growth and higher susceptibility to a global trade war.
See also: Overall softness in Singapore retail sector, but premium groceries hold long-term prospects: DBS
Among the developed markets (DMs), the analysts prefer Singapore to Hong Kong as the city-state is seen as a key beneficiary of the China+1 strategy. The benchmark Straits Times Index (STI) is also expected to remain resilient in a hawkish interest rate environment as the three banks – DBS, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) take up over 50% of the index weight. DBS has remained “neutral” on Singapore’s outlook while lowering its outlook for Hong Kong to “neutral”.
Singapore stock picks, STI target
Within the Singapore stock market, the analysts have identified several counters set to benefit from their predicted themes of a Trump trade, earnings resilience and recovery amid market volatility and the market review by the Monetary Authority of Singapore (MAS).
United Overseas Bank (UOB), Singapore Technologies Engineering (ST Engineering), Seatrium, ComfortDelGro and Venture Corporation are pegged to benefit from Trump’s policies. At the same time, DFI Retail, Seatrium and AEM Holdings are likely to see a strong recovery in earnings while Sheng Siong and ST Engineering are expected to see resilience in their earnings. The analysts also see a potential value unlocking for counters like Thai Beverage (ThaiBev), Singapore Telecommunications (Singtel), City Developments Limited (CDL) and UOL on the back of the stock market review by the MAS.
AEM and Venture Corporation will also likely benefit from the recovery in the tech sector; Venture Corp is likely to benefit from China+1 trade diversification, which is set to gain more traction.
Overall, the analysts have given the STI a 2025 year-end target of 3,950 points, representing an upside of 5.3% to the index’s last-traded position of 3,752 points as at Jan 2.
In comparison, Hong Kong’s Hang Seng Index is expected to grow by 7.1% to 21,300 points at the end of the year, while the Stock Exchange of Thailand (SET), Indonesia’s Jakarta Composite Index (JCI) and the Philippine Stock Exchange (PSE) is expected to grow by 11.8%, 12.7% and 16.3% to 1,550 points, 8,000 points and 7,600 points respectively.
