Singapore 2022 Outlook Can the Straits Times Index continue | FSMOne SG - Research Highlights

Singapore 2022 Outlook

Can the Straits Times Index continue to deliver?

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• Following the Singapore economy’s return to growth, the STI chalked up a total return of 13.6% in 2021.

• Looking ahead, while the manufacturing sector will remain as the key engine of growth, its momentum is likely to soften in 2022 as the global demand for semiconductors normalises.

• The Fed is likely to kick-start its rate hike cycle in 2022. One of the prime beneficiaries of higher interest rates is the Singapore banks, given that more than 50% of their revenue comes from net interest income.

• We reckon that the uneven recovery of S-REITs will continue into 2022. Industrial and data centre REITs are likely to deliver resilient growth. At the same time, we expect the remaining sub-segments to experience a gradual recovery.

• We project an upside potential of 23% for the STI by end-2023, with an attractive dividend yield of 4.4% over the next two years. We maintain our 3.5 Stars “Attractive” rating for the Singapore equity market.

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: Nikko AM Singapore Dividend Equity SGD / SPDR Straits Times Index ETF (SGX:ES3)