The positive sentiment following a global reopening did not last long. The Straits Times Index (STI) rallied with a 3.2% increase m-o-m to 2,590 in early June when countries were emerging from their lockdowns, corrected downward following an additional rise in US case numbers in the US. Most European and Asian states – including Singapore – had already begun reopening too. Consumer staples led by Wilmar, Thai Beverage and Dairy Farm outperformed, but consumer discretionary stocks underperformed, with Genting and SIA suffering from falling tourism.
SINGAPORE (July 3): With interest rates likely to remain low until end 2021 as the economy follows a “U-shaped” or “L-shaped” recovery, DBS analysts Yeo Kee Yan and Janice Chua are recommending investors to load up on yield stocks for the foreseeable future.
“The US COVID-19 resurgence and concern of more outbreaks globally as economies reopen has put a check on the early June rally driven by optimism of a cyclical recovery. There is also a sense of caution heading to the 2Q results season as the full impact of the economic shutdown due to the ‘circuit breaker’ that lasted a little over 2 months will be felt,” they report.
