Jaiswal also expects a sustained rally in the small and mid cap space, driven by the Monetary Authority of Singapore’s (MAS) policy initiatives, which should boost liquidity and support value-unlocking opportunities.
In his top sector picks, Jaiswal favours sectors such as consumer, manufacturing & technology and industrial REIT.
With the defensive qualities shown in the consumer sector, he expects the grocery retail segment to continue delivering on earnings and dividends due to its defensive nature and earnings resilience.
The sub-sector trades at between 16-18 times forward P/E ratio, which is below its long-term average and yields an attractive 3-4% in dividends.
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His preferred picks include Food Empire Holdings, Sheng Shiong Group, DFI Retail and Thai Beverage.
Jaiswal remains positive on Food Empire for its continued growth led by higher manufacturing capacity coming on stream, while he likes Thai Beverage as he expects demand to recover and that the stock trades at an attractive valuation at -2SD of its long-term mean P/E.
Apart from the consumer sector, he also favours the manufacturing & technology sector, as he views the lowering of US tariff rates for Malaysia from 25% to 19% as a positive development, given the sector has significant manufacturing and export presence in Malaysia.
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The sector’s growth will be largely driven by semiconductor recovery, customer order ramp up, and new product introduction.
Jaiswal’s preferred picks are Venture Corp and Frencken Group.
He noted that Venture’s valuation remains attractive, trading at 16-17 times forward P/E, below peers and an attractive dividend yield of between 5-6% after accounting for lower margins and revenue going forward. Meanwhile, Frencken has minimal exposure to the US at around 10% of its revenue. Valuation is also attractive with forward P/E valuation of between 13-14 times, trading at a discount to peers.
Within the S-REITs space, Jaiswal remains positive on the industrial REITs. The way he sees it, most of them continue to post stronger operational metrics, with a firm outlook for most of the sector.
The logistics segment in Singapore and overseas (except China) continues to be the bright spot, with healthy rental rate growth and continued demand for high specification logistics facilities. Industrial sector occupancy and rents have been on an uptrend over the last two years.
Multi-user factories and high-tech industrial spaces have also been performing strongly amid a favourable demand-supply situation. Overall, Jaiswal continues to see the industrial sector as a relatively defensive play, offering earnings stability and stable asset value.
Among the subsectors, he prefers logistics, data centres, and flatted factories, which continue to benefit from the shift in market dynamics brought about by supply chain shifts and Singapore’s smart nation initiatives.
His preferred picks within the space are AIMS APAC REIT, ESR-REIT and CapitaLand Ascendas REIT.
