“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,” says Loh, as he cut his year-end STI target from 4,115 points to 3,720 points, which is pegged to a P/E multiple of 13.4 times — a level not “view as stretched for a Singapore market that is long on quality defensive names”.
Similarly, DBS Group Research lowered its year-end STI target to 3,855 points from 4,080 points. Singapore, as a market, is hit with the 10% base rate, which is lower than many regional economies. However, many listed names here rely on a regional supply chain and they will be impacted inevitably, says DBS Group Research. “The harsher-than-expected US tariffs on all trading partners, coupled with China’s retaliatory tariff on US imports, have escalated the tariff war and severely undermined market confidence,” adds DBS.
As investors wait for uncertainties brought about by the tariffs to stabilise, DBS advises them to take a closer look at the so-called defensive sectors that will be less affected, especially if they have a higher level of domestic exposure. Such counters include those in consumer staples, utilities and communications. Others to look at include those with the ability to ride on structural or secular growth trends such as sustainability and artificial intelligence.
According to DBS, the 11 stocks under its coverage that can better navigate tariff war volatility are REITs Mapletree Industrial Trust , Keppel REIT, Parkway Life REIT; consumer staples DFI Retail Group , Sheng Siong Group ; communications service providers Singapore Telecommunications and Netlink NBN Trust; utilities firm Sembcorp Industries and public transport provider ComfortDelGro ; as well as tech stocks with limited exposure UMS Integration and Grand Venture Technology .
See also: Look to domestic shelters in volatile times
On the other hand, DBS has listed 11 stocks to avoid. They are cyclical in nature and are tied to global trade and therefore more likely to lag in the current environment. They are two of the local banks, United Overseas Bank and Oversea-Chinese Banking Corp; two REITs, Mapletree Logistics Trust and Daiwa House Logistics Trust ; tech manufacturers Venture Corp and Aztech Global ; and consumer discretionary plays Genting Singapore , Delfi and Thai Beverage . DBS believes that investors should avoid Seatrium and Singapore Airlines too.
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 and 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.
Consumer staples
Even as investors reel from the widespread salvo of tariffs hitting manufacturing and export-heavy regional economies, DBS believes that certain domestic-focused consumer staple plays will remain resilient, especially in contrast against discretionary names.
See also: NetLink NBN Trust replaces ComfortDelGro in STI reserve list
However, investors need to keep tabs on second order impacts even among the domestic consumption stocks, especially Vietnam and Thailand. Before the April 9 reversal, these two economies are set to be hit by rates of 46% and 36% respectively. In China, additional domestic stimulus measures to counteract the slower export demand may provide upside surprise, says DBS.
Specifically, DBS remains positive on grocery retail stocks such as Thailand’s CP ALL, Hongkong-based but Singapore-listed DFI Retail Group, and homegrown supermarket chain Sheng Siong Group. Food staple producers, such as Indonesia’s Indofood, famous worldwide for its Indomie brand of instant noodles, are interesting too.
For DBS analysts Chee Zheng Feng and Andy Sim, DFI Retail Group remains their top pick, as its convenience store business in North Asia is well positioned to benefit from ongoing downtrading behaviour amid current economic headwinds.
On the other hand, they are not as upbeat on Thai Beverage given its heavy exposure to domestic consumption in Thailand and Vietnam, due to the impact of the second round of tariffs in the form of economic uncertainty.
Chee and Sim are cautious on Indonesia-based chocolate maker Delfi, given its high input cost and as its products are seen as a discretionary staple. Similarly, Genting Singapore, which operates the Resorts World Sentosa integrated resort, could experience further decline in gaming volumes due to weaker consumer sentiment in the region.
Stable utilities
The worsening trade war is bad for energy prices but less so for utilities players, especially those with their operations and markets within Asia and therefore can be perceived as “shelters” from the storm.
“Utilities and energy operators should be defensive against risks relating to trade policies and industrial demand. Hong Kong utilities are supported, while those in mainland China and the rest of Asia with resilient cash flows should exert yield qualities,” says HSBC Global Research in an April 8 note.
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Sembcorp Industries, a component stock of the STI, has been named by HSBC as one of the “preferred” Asian energy and utilities stocks that are possible “shelter” plays amid the worsening global trade war.
Besides Sembcorp, the other five such companies are Hong Kong-based power generator CLP Holdings; multi-infrastructure player CK Infrastructure Holdings; China Yangtze Power, which is behind the Three Gorges; wind power leader China Longyuan Power Group Corp; and Korea’s Hanwha Solutions. HSBC has kept its “buy” call on all these counters along with the same target prices.
HSBC likes Sembcorp given that a high proportion of its profit is backed by long-term purchasing power agreements within Singapore of between 10 and 18 years and a fixed dollar gross profit. “We like Sembcorp given its strong presence in the Singapore power market and it is expanding into India as well. We see increase in consensus estimates and value crystallisation opportunities as key catalysts for the share price,” says analyst Rahul Bhatia, who has a target price of $6.98.
HSBC is not alone in keeping its bullish view on this stock. According to Bloomberg data, all 12 active coverage of this counter is a buy or equivalent call. Bhatia’s target price is on the lower side, with CGS International the most bullish at $8.14.
However, there are possible downside risks. They include lower-than-expected growth in its renewable energy business; further recognition of impairments by the company, specifically in Myanmar and Bangladesh; higher-than-expected impact on financial expenses, given the high net gearing and rising interest rate environment; and an uncertain timing or non-value accretive capital recycling.
Anti-tariff
Healthcare stocks are also where analysts are looking at as shelters from the storm. In his April 8 report, RHB Bank Singapore’s Shekhar Jaiswal upgraded Raffles Medical Group from “neutral” to “buy”, along with a higher target price of $1.08 from 95 cents, as earnings growth is seen to continue amid the macroeconomic uncertainties.
He calls Raffles Medical a “defensive option in a volatile market”. Besides its hospital and clinics in Singapore, the company operates in China as well. “We maintain our strong earnings growth outlook, which will be aided by higher revenue from its healthcare and hospital business segments, as well as its China operations gradually moving towards ebitda breakeven in 2026,” says Jaiswal.
KGI Securities similarly likes Raffles Medical. Besides the improved confidence and optimistic growth outlook, the company had recently revised its dividend policy to distribute at least 50% of its sustainable earnings annually and announced plans to repurchase up to 100 million shares over the next two years. From April 3, the day after Trump’s tariffs were announced, Raffles Medical shares dropped by just 3% as at close on April 10, IHH Healthcare , the bigger healthcare group dual-listed in both Singapore and Malaysia, saw its Singapore-quoted shares down less than 1% in the same period.
Nonetheless, there are still some silver linings for the Singapore market. A top-level market review committee, formed last year way before the escalation of the trade war, is planning to inject some $5 billion via fund managers into the local market as part of a broader set of measures to revive Singapore stocks.
Instead of GIC or Temasek as market commentators had earlier suggested, the funding will come from the Monetary Authority of Singapore (MAS), and if early indications are to go by, the $5 billion is to be allocated into the smaller companies outside the STI component stocks, as this is the sector of the market that can do with more buying interest and liquidity. “We understand that a meaningful number of fund managers have submitted their proposals to the MAS with the funds likely to be deployed in 2H2025 in our view,” says UOB Kay Hian’s Loh.
Separately, Paul Chew of PhillipCapital has also cited this $5 billion as a reason why small and mid caps of Singapore are starting to awaken from their “Frankenstein”-like slumber.
