Chew remains upbeat that STI will get to enjoy some gains. The Singapore market is trading at just 10 times forward earnings versus just below 15 times average over the past decade. “Either the share prices go up, or earnings will come down. Of course, we hope valuations will go up,” says Chew. However, catalysts are needed to get things going. “Valuation’s attractive now,” he adds.
With the US Fed continuing to fight inflation by setting higher rates for longer, equity markets are not likely to see the relief investors have long awaited. As a result, Phillip Securities recommends that investors stay put in counters that can give them a decent level of yields and also those relatively insulated from the cycles.
This is what many in the market are already doing. “The bulls were sleeping, the bears were sleeping too. Everyone’s sleeping,” observes Paul Chew, head of research at the brokerage, at a presentation on Oct 7, referring to how the Straits Times hardly budged in the third quarter of the year that just ended.
