"In our view, there could be further downside risk to consensus earnings estimates should a full-scale trade war break out given the interconnected nature of companies in Singapore," adds Loh.
From a previous year-end 2025 target of 4,115 points, UOB Kay Hian's revised target for the index is now 3,720 points, which is pegged to a PE multiple of 13.4x which is not "view as stretched for a Singapore market that is long on quality defensive names."
Given the fluidity of market conditions, investors ought to pay closer attention to so-called "domestic-focused stocks" with names under UOB Kay Hian's coverage including Centurion Corp, ComfortDelGro, Hong Leong Asia, Pan-United Corp, PropNex, Raffles Medical Group, Sheng Siong Group, SIA Engineering.
For REITs, the picks are also Singapore-focused names such as CDL Hospitality Trust, Far East Hospitality Trust, Frasers Centrepoint Trust, Keppel REIT, Lendlease REIT, and Parkway Life REIT.
See also: Trade policy turmoil raises recession risk, but long-term equity outlook holds up: Capital Group
