The Singapore stock market awaits US consumer price inflation (CPI) data, a policy statement from the Monetary Authority of Singapore (MAS) and the 3Q2022 earnings season, says DBS Insights Direct in its market view update.
In the note dated Oct 10, DBS says the stronger-than-anticipated US September jobs data caused a sell-off in US equities ahead of the “much anticipated” September CPI and core CPI releases on Oct 13, which are expected to have increased 8.1% and 6.5% y-o-y respectively.
Meanwhile, major US equity indices fell 2.1% to 3.8% but held above recent lows. The 10-year US treasuries also gained 6 basis points (bps) to 3.88%, remaining below its recent high of 4.01%, and USDSGD edged up to 1.4322.
Attention will also be on MAS policy statement and 3Q gross domestic product (GDP) advance estimates scheduled for release this week, with the consensus expectation of monetary policy tightening and for 3Q2022 GDP to ease to 3.5% y-o-y growth from 4.4% y-o-y in 2Q2022.
“So long as this week’s US CPI data does not trigger a further spike in rate hike expectations, we see investors’ attention turning to the 3Q results season that has just started”, reads the DBS note.
The Straits Times Index (STI) currently trades close to 11.2x 12-month forward P/E or 2 standard deviations (SD) below the mean, with near-term support pegged at around 3,100 points.
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DBS is positive on “reopening and resilient” names, and has added Frasers Centrepoint Trust (FCT) to its list of resilient stocks, while SPH REIT is also a “stock to watch”, with its gross revenue for FY2022-ended August increasing 1.7% y-o-y to $281.9 million and net property income (NPI) growing 3.5% y-o-y to $209.7 million.
DBS currently has a “hold” call for SPH REIT with a target price (TP) of 96.4 cents
As at 11.00am, units in FCT were trading 4 cents or 1.85% down at $2.12 while units in SPH REIT were trading 0.5 cents or 0.56% up at 90 cents.
