CGS International has released its latest Singapore equities strategy note, indicating a cautious approach in the near term due to rising recession concerns and uncertainties surrounding trade tariffs. The firm is adopting a more risk-off strategy, with a particular emphasis on Real Estate Investment Trusts (REITs) as a safer investment option. The strategy note, authored by Lock Mun Yee, Lim Siew Khee, and Melvin Lim, suggests that the market could mimic the downturn experienced during the Trump administration in 2018.
The strategy note outlines a bullish stance on REITs, predicting a 1% growth in distribution per unit (DPU) for 2025. This optimism is driven by peaking fund costs and positive rental reversions, alongside a pivot in interest rates that could lower capital costs and enhance acquisition opportunities for REITs. The note also highlights Singapore’s appeal for its dividend yield, which is expected to increase from 4.1% in FY24 to 4.6% in FY25.
CGS International’s top Singapore stock picks include UOL, KDCREIT, iFAST, and CLAR, among others. The firm has removed previous picks such as SCI and UOB, citing limited near-term catalysts. The strategy note also reports mixed results from the 4Q24 earnings season, with Capital Goods, Finance, and Technology sectors outperforming, whilst Property and REITs lagged behind.
In conclusion, CGS International’s strategy reflects a cautious yet opportunistic approach, with a focus on sectors and stocks that offer stability and growth potential amidst economic uncertainties. The firm’s emphasis on REITs and dividend yield growth underscores its strategy to navigate the current market landscape.
“`
This news story was carefully selected and published by a human editor, though the content itself was AI-generated. If you spot an error, please report it here.
