“Developed markets at advance[d] stages of reform trade at 21 times,” the analyst points out. “Singapore now offers a fundamentally more attractive value proposition versus 2010 - 2020, where a unipolar, low rate, low unemployment market environment kept uncertainty in check.”
Among the counters, the analyst sees renewed large-cap reforms accelerating capital returns while small- and mid-caps (SMIDs) remain “inexpensive”.
In addition, the measures proposed by the Monetary Authority of Singapore’s (MAS) Equities Market Review Group and its $5 billion Equity Market Development Programme (EQDP) should bring about “significant value unlocking”.
Wickramasinghe also posits upside earnings risk with artificial intelligence (AI) possibly lifting productivity and margins across sectors.
In FY2026, the STI’s average earnings per share (EPS) is expected to grow by 3.6% y-o-y, supported by GDP expansion of 2.8%. “3Q2025 saw the lowest earnings disappointments in two years and this trend is likely to sustain.”
Within the listcos, Wickramasinghe is “most positive” on REITs, banks, SMIDs, the Internet sector and telecommunications companies (telcos).
REITs should be key beneficiaries of the falling interest rates, which can lower funding costs and support asset values, while banks should see credit growth improve. The banks’ return on equities (ROEs) and capital returns could also be sustained with the use of AI.
See also: Singapore 4Q GDP up 5.7% y-o-y on pharmaceuticals and AI-led output gains
To the analyst, the Internet sector offers “structural growth” with improving monetisation while telcos should benefit from defensive cash flows, rising demand for AI and infrastructure, as well as elevated capital returns.
SMIDs also stand out for their strong earnings momentum and trailing valuations, with the sector expected to benefit further from the MAS’s reforms.
Wickramasinghe has named CapitaLand Integrated Commercial Trust (CICT), newly-listed Coliwoo, CSE Global, Food Empire, Lendlease Global Commercial REIT (LREIT), Oversea-Chinese Banking Corporation (OCBC), Sea Limited, Singapore Exchange (SGX), StarHub and Suntec REIT as his top picks.
