DBS warns investors to expect volatile swings in the near term from fluid tariff news flow.
"Harsher-than-expected tariffs imposed by the US on all its trading partners and China’s retaliatory 34% tariff on US imports have escalated the tariffs war and severely undermined market confidence," says DBS in its April 7 note.
DBS economists now figure that there is a 35% chance that the US will tip into a recession; Singapore's GDP, meanwhile, will be directly negatively impacted by 0.5-0.75 percentage points (ppts) versus the current forecast of 2.8% this year.
Within the Singapore stocks under its coverage, DBS prefers defensive counters over cyclical names, at least until tariff uncertainties stabilise.
See also: Macro conditions still conducive for S-REITs, with strong 3Q showing: analysts
So-called defensive stocks include DFI Retail Group (SGX:D01
) , Sheng Siong, Singapore Telecommunications (SGX:Z74) , Sembcorp Industries (SGX:U96) , ComfortDelGro (SGX:C52) , Netlink NBN Trust and Parkway Life REIT.
On the other hand, investors ought to avoid cyclical stocks the likes of United Overseas Bank (SGX:U11) , Oversea-Chinese Banking Corp, Mapletree Logistics Trust (SGX:M44U) , Daiwa House Logistics Trust (SGX:DHLU) , Venture Corp, Aztech Global (SGX:8AZ) , Genting Singapore (SGX:G13) , Delfi, Seatrium and Singapore Airlines (SGX:C6L) .
