AIO Finance Analysis

Investors should continue to stay defensive heading into 2Q. Our view that the STI has a downward bias to 2530-2650 remains intact. While minor oversold bounces do occur, it’s still a sell-into-strength market.

The clearest indication came last week when the FED’s USD200bil injection into credit markets triggered a 180pts gain from Tuesday’s low of 2794 to Wednesday’s high of 2976 that was all given back by Thursday.


Defensive plays such as telecom (SingTel, StarHub and M1) and consumer staples (SPH, SMRT, SingPost) should hold up well in coming weeks. Outside of these defensive stocks, other index heavyweights are likely to pull the STI lower towards 2530-2650.

The Singapore economy saw earnings rise but productivity dips for first time in six years. Labour productivity slipped 0.9% in 2007 while real earnings rose 4%. Jobless rate is down to a decade low of 1.6%.

Source: DBS Vickers
(Click here to Read More...)