Factors identified in the analysts’ report on March 28 include the inflation outlook, supply chain disruptions because of the Russia-Ukraine war and China’s zero-Covid strategy, and a general caution ahead of the size of the rate hike at the US Federal Reserve’s May Federal Open Market Committee (FOMC) meeting.
As the optimism on the reopening of Singapore lifts the benchmark Straits Times Index (STI) to slightly above a 13.6x 12-month forward P/E, DBS analysts Yeo Kee Yan and Woon Bing Yong note that the index may be close to a near-term cap of 3,450 points.
While April tends to be a “benign month” for the market as stocks hold their prices ahead of ex-dividend dates, the analysts note that the current global factors may cause a cap on the index’s near-term upside.
