Analysts project STI to reach between 3,000-3,200 by end-2021

 

TRADING WINDS DOWN FOR THE YEAR

Analysts project STI to reach between 3,000-3,200 by end-2021 (Put here for record. Chun bo?)

The Business Times on Tuesday reported that local market analysts are forecasting that the STI could reach 3,000-3,200 over the next 12 months.

The newspaper said CGS-CIMB’s Lim Siew Khee was the least bullish of those surveyed, with an STI target of 3,068 whilst RHB Securities set a 3,144 target.

DBS Equity Research’s target is 3,180, the same as UOB-Kay Hian, whilst Phillip Securities is the most bullish at 3,200.

DBS’s Yeo Kee Yan was quoted saying the current vaccine-led recovery optimism should see a return of the traditional sector rotation that accompanies a typical economic cycle.

He noted that banks, consumer discretionary and transportation stocks that are outperformers in the early recovery cycle have led the recent rebound, whilst “pandemic winners’’ like supermarkets, personal protective equipment makers and work-from-home beneficiaries have underperformed.

Paul Chew, Phillip’s research head was quoted saying a reversion-to-the-mean trade is expected in 2021.

“Sectors that suffered the most this year will recover as borders open and activities normalize’’ said Mr. Chew whilst Carmen Lee of OCBC Investment Research pointed out that value stocks tended to narrow the gap with growth stocks and small-cap stocks tended to show better returns historically during an economic recovery.