Last weekend, The Edge Singapore’s Goola Warden posited that roundophobia — a fear of round numbers for the stock market — could set in.
“As the STI approaches 5,000, technical indicators are somewhat overstretched. Short term 21-day RSI remains stubbornly above the overbought line which in itself is not an alarming signal,” she wrote in her weekly Right Timing column.
DBS Group Research analysts Yeo Kee Yan and Foo Fang Boon also see the STI remaining rangebound in the near-term. The index is likely to see support at the 4,800 and 4,735 mark and see resistance around 5,000 points. The analysts, who have a year-end target of 5,000, based on 15.25 times FY2027 P/E, will review their target after the 4QFY2025 earnings season.
In the next 12 months, Yeo and Foo see the STI to trade at 5,148, higher than the consensus’ estimate of 5,038 points.
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That said, the analysts remain “positive” on value-unlocking opportunities and see a broadening in small- and mid-cap (SMID) stocks. “The increase in Singapore’s stock market capitalisation over the past one year has far exceeded the $5 billion EQDP (Equity Market Development Programme) seed fund,” they write in their Feb 5 report.
Stocks to watch this earnings season
This earnings season, the analysts are positive on SATS, Bumitama Agri (BAL), iFast, UMS Integration, Nam Cheong and Oversea-Chinese Banking Corporation (OCBC). They like SATS as the market seems to underestimating its earnings potential, while they see BAL benefitting from the strong crude palm oil (CPO) price momentum. iFast’s onboarding ePension trustees are likely to drive assets under administration (AUA) growth.
See also: JP Morgan lifts STI base-case target to 6,000; bull-case to 6,500
Yeo and Foo also see multiple re-rating catalysts for Nam Cheong, which is trading at “undemanding valuations”, while they like OCBC for its improving net interest margin (NIM) and clear capital return plans.
On the other hand, the analysts are cautious on stocks such as United Overseas Bank (UOB), PropNex and Hong Leong Asia (HLA) that have seen their shares run ahead of results.
Stocks to benefit from Budget 2026
Ahead of Budget 2026, which will be announced on Feb 12, the analysts see infrastructure providers such as Singapore Telecommunications (Singtel) and Keppel DC REIT benefitting from artificial intelligence (AI)-driven innovation supporting Singapore’s next growth phase. On Jan 24, Digital Development and Information Minister Josephine Teo announced the $1 billion National AI R&D Plan (NAIRD). The plan will run from 2025 to 2030 and will drive fundamental AI research such as guarding against risks and so on (Read the full story here).
At the same time, tech stocks such as UMS, Frencken, AEM and Venture could gain from the government’s push towards advanced manufacturing under the latest Economic Strategy Property. Property agencies could also benefit from any easing of property measures; APAC Realty is the analysts’ preferred pick. Finally, any moderation in cash handouts could impact retail operators such as Sheng Siong and Frasers Centrepoint Trust (FCT), which has a portfolio of suburban malls.
Stocks to ride value-unlocking theme
Under the value-unlocking theme, the analysts like City Developments Limited (CDL), which is tipped to distribute up to 20 cents per share in special dividends from divestment gains. They also like UOL for the potential securitisation of its hotel or office portfolio.
GuocoLand was identified for its robust launch pipeline of over 1,300 units and potential monetisation of investment properties; Singapore Land (SingLand), a subsidiary of UOL, is a discounted proxy to the latter, trading at 0.5 times its P/RNAV (revalued net asset value). SingLand also has privatisation potential.
Hotel Properties Limited (HPL) may sell or redevelop their Orchard properties, The Forum, voco Orchard Singapore and HPL House, while Haw Par Corp is liked for its higher dividends of up to 60 cents to 70 cents per share from stakes in UOB and UOL. Finally, ThaiBev presents an attractive forward yield of 5.2% while the market waits for its earnings recovery and potential value unlocking.
