CGS International has released its latest strategy note for ASEAN, emphasising Singapore’s favourable position compared to its regional counterparts. Despite a broad-based rebound in the past day, the note advises caution due to ongoing uncertainties. The analysis ranks Singapore ahead of Malaysia, and Thailand ahead of Indonesia, based on earnings per share (EPS) growth, currency and political stability, market valuations, and dividend yield.
The report identifies 22 stocks across ASEAN markets that have reached compelling buy levels, although risks remain over the next 90 days due to fluctuating tariffs. Companies such as MISC, DLG, GENS, CIT, PTTEP, and HANA are highlighted for trading below Global Financial Crisis and COVID-19 trough price-to-book value valuations.
EPS cuts are anticipated, with a potential 10% reduction leading to 1% to 9% declines in 2025 forecasts. Singapore and Thailand may see slight growth, whilst Indonesia and Malaysia could face declines. The note underscores Singapore’s resilience, with a year-to-date performance of -10% compared to an average of -17% for the rest of the region.
The strategy note suggests that whilst the risk-reward is attractive for patient investors, the full impact of global economic challenges remains uncertain. ASEAN governments may revise GDP growth forecasts for 2025 and 2026, with current projections still in positive territory. As negotiations continue among global leaders, the possibility of a recession looms, though it may not be a shock if it occurs.
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