SINGAPORE (June 29): The second phase of the reopening of Singapore includes broader economic segments including food and beverage (F&B) and retail, while the active number of Covid-19 cases have been halved from early June, says Maybank Kim Eng analyst Thilan Wickramasinghe.
Notably, utilisation levels, especially in the services and construction sectors, are expected to remain low, he says.
The contraction in May’s factory output reported on June 26, was led by a 55.1% plunge in marine and offshore engineering, and a 40.7% decline in transport engineering.
“Potential bottoming of exports as global lockdowns are eased is unlikely to reverse this trend,” he adds.
Thus, Wickramasinghe favours stocks such as Wilmar International, AEM Holdings, UMS, DBS Group Holdings, United Overseas Bank (UOB), Ascendas REIT (AREIT), Mapletree Logistics Trust (MLT), and City Development Limited (CDL) that focus on structural growth from the consumer staples, technology, financials, and REITs segments, respectively.
The brokerage has also upgraded MLT to “buy” on structural tailwinds from regional expansion and higher debt headroom.
