RHB’s economist Barnabas Gan had earlier trimmed his Singapore GDP forecast for 2022 to 3.2% from 3.5% — a level that is slightly lower than the consensus forecast of 3.8%, as well as within the lower half of the current official estimates of between 3% and 5%.
Singapore’s economy is seen to slow from the wider global woes of inflation and geopolitical risks. Yet, Singapore stocks are seen to continue earnings growth as the companies here ride on growth momentum of exports and strong recovery in services. Consequently, RHB Group Research maintains its earlier call that the Straits Times Index (STI) will end this year higher over 2021, albeit via “slow grind”.
“We expect inflation to moderate by year-end and debt level for our coverage universe to remain manageable. STI’s forward P/E is below its historical average, while its forward yield is still amongst the highest in Asia,” writes RHB’s Shekhar Jaiswal in his Aug 10 report.
