Sector-wise, Jaiswal rates consumer, industrials, real estate, transport, manufacturing and technology and industrial, office and overseas REITs sectors “overweight”. Meanwhile, financials, food products, healthcare REITs and telecommunications are rated “neutral”.
RHB’s projections and picks are underpinned by Singapore’s strong macro-economic outlook, mainly “resilient external demand” for goods and services, possible strengthening of the Singdollar versus the greenback and further US interest rate cuts.
“We maintain our Singapore GDP growth forecast at 3% YoY in 2026, following an estimated 4% expansion in 2025,” writes Jaiswal. “Into 2026, activity is likely to be supported by rising exports, spillovers from the global electronics upcycle, and steady regional demand.”
The analyst points out that Singapore’s strong fundamentals, augmented by regional integration and strong domestic demand, should provide a cushion against external shocks. He expects 2026 non-oil domestic exports or NODX growth of 3% and industrial production growth of 4%, which is in line with RHB’s 3% GDP growth expectation for the island-state.
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The report also identifies the continued impact of the Singapore equity market reform measures and in particular the equity market development programme (EQDP) which aims to increase market activity and boost interest in companies outside the STI constituents.
“Market strength will depend on sustained EQDP deployment alongside potential third-party capital crowd-ins, as well as ongoing inflows linked to new single-family offices or SFOs establishing a presence in Singapore,” notes Jaiswal.
Investment themes
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Strategy-wise, RHB identifies four investment themes for the new year.
Firstly, RHB is optimistic about the benefits of the EQDP for small and mid-cap stocks. Jaiswal identifies possible counters, screening companies using the following criteria: exclusion from STI constituents; market capitalisation between $300 million to $3 billion; minimum free float of 20%; average daily trading volume (ADTV) of at least US$500,000 ($646,000) over the past 20 sessions; and positive trading momentum which is defined as the 20-day ADTV exceeding the three-month average.
Under this theme, a total of five preferred companies were selected namely, AIMS APAC REIT (AA REIT), Centurion Corp, CSE Global, Frencken Group and Stoneweg European Stapled Trust.
The next theme identified undervalued or underappreciated stocks based on possible market mispricing. The counters are weighted down by near-term headwinds but are resilient rather than facing a long-term structural decline, according to Jaiswal who writes, “As market liquidity improves and investor risk appetite broadens into 2026, we see scope for valuation gaps to narrow, particularly for stocks with visible catalysts.”
The counters identified as undervalued or underappreciated are ComfortDelGro and Raffles Medical. Thai Beverage (ThaiBev) was not chosen as a pick but was identified as it met RHB’s criteria, making it the first stock that could presumably be of further interest for investors.
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For the third theme, as interest rates seem to be on the decline, RHB suggests that REITs’ yields are set to “rebound” from lower financing costs and increased balance sheet flexibility. Industrial REITs are the most preferred type, followed by office, retail, overseas and hospitality in descending order.
Top picks include CapitaLand Ascendas REIT, CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Suntec REIT and AA REIT. Other notable mentions include ESR REIT, Prime US REIT, Starhill Global REIT and Stoneweg European Stapled Trust.
Stocks (non REITs) with high dividend yields make up the fourth investment theme for RHB. The investment house screens stocks using three criteria: dividend yield of at least 5%; minimum rating of “neutral”; and potential increase in earnings and/or dividends.
RHB identifies six such counters within its coverage — Bumitama Agri, ComfortDelGro, DBS, First Resources, Starhub and ThaiBev. Similar to ThaiBev, Bumitama met the criteria but was not chosen as a pick, making it the second stock that could presumably be of further interest for investors.
Other sectoral picks
RHB also selected its sectoral picks: Food Empire and Delfi for consumer; Venture Corp and UMS Integration for manufacturing; City Developments for real estate; Singapore Telecommunications (better known as Singtel) for telecoms; and ST Engineering for transport and industrials
The report also points out that the Monetary Authority of Singapore, Singapore’s financial regulator, has undertaken a “comprehensive” set of measures that complement the EQDP. These include enhancements to the Global Investor Programme, funding to strengthen the equity research ecosystem, the Value Unlock package, and the launch of the iEdge Singapore Next 50 indices to raise visibility of mid-caps.
“We like a selective strategy across reform gainers, valuation laggards, REIT accumulation, and defensive income plays,” writes Jaiswal, “With the Value Unlock package, these initiatives should reinforce market resilience into 2026.”
RHB also expects the next round of EQDP fund manager appointments to be announced in the second quarter of the new year.
