Worst seems to be over for Singapore stocks, says Morgan Stanley

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22/06/2020 07:03

SINGAPORE, June 22 (Reuters) - Equity analysts with Morgan
Stanley  MS.N  are forecasting a 14% total return potential for
Singapore equities over the next 12 months, citing a
bottoming-out of the local economy, low valuations and strong
dividend yields.
    "In our base case scenario, we see growth driven by a
rebound in corporate earnings as the negative impacts of
COVID-19 are contained, and economic activity resumes to near
normal levels in 2021," the investment bank said in a report as
it launched its coverage of Singapore equity strategy.
    Last Friday, the city-state lifted most restrictions that
had been imposed more than two months ago to curb the spread of
the pandemic.  urn:newsml:reuters.com:*:nL4N2DS2VK
    In the report dated June 21, Morgan Stanley set a target of
1,550 for MSCI's Singapore index, which it said implied a 9%
upside from current levels, and a 14% total return over 12
months after including dividends.
    "We believe valuations have bottomed and a sustained rebound
is underway, as the market looks past current economic weakness
and shifts its focus to an imminent recovery," said equity
analyst Wilson Ng and research associate Derek Chang.
    They favoured cyclical recovery plays such as banks,
property and consumer staples and sustainable divided stocks.
    Morgan Stanley's picks included United Overseas Bank Ltd
 UOBH.SI , City Developments Ltd  CTDM.SI , agribusiness group
Wilmar International Ltd  WLIL.SI , Ascendas Real Estate
Investment Trust  AEMN.SI  and telecoms infrastructure firm
Netlink Trust  NETL.SI .
    The brokerage highlighted that Singapore stocks' dividend
yield of 4.5% was the highest in Asia Pacific and across major
developed markets globally.

 (Reporting by Anshuman Daga, Editing by Sherry Jacob-Phillips)
 ((anshuman.daga@tr.com; +65 64035676;))