JPMorgan Chase & Co., has shifted its stance on Singaporean equities to overweight, underscoring supportive government policies, attractive dividend yields, and fiscal resilience as key factors buffering against an external economic downturn.
The strategist from JPMorgan noted on Wednesday that robust household and business assistance should sustain strong economic activity, while investments in innovation and equity market enhancement offer fresh growth prospects.
This upgrade trails Singapore’s project budget surpluses for a second consecutive year. This forecast arrives even as Prime Minister Lawrence Wong announced a series of subsidies, rebates, and infrastructure funding ahead of national elections scheduled for later this year.
JPMorgan analysts highlighted that the fiscal plan would benefit property developers, especially since no new “cooling measures” were introduced. They also noted that retail landlords could see a boost from increased supermarket sales fueled by government-issued vouchers.
Singapore’s primary stock gauge, the Straits Times Index, has soared to unprecedented levels in recent weeks, bolstered by a robust banking sector surge and confidence in governmental initiatives to rejuvenate the market. In efforts to tackle low liquidity and a scarcity of new listings, the government is deploying various incentives, including strategic tax measures.
JPMorgan’s strategists favor bank and industrial sectors while maintaining a selective approach towards real estate investment trusts. The bank projected a bullish scenario where the Straits Times Index could reach 4,200, suggesting a 7% increment from current levels.
