Could 2017 spell the end of EPS cuts for the Singapore market?

SINGAPORE (Nov 29): UBS Global Research is expecting more cuts to its 2017 earnings per share (EPS) estimates in early 2017, but believes this is set to bottom out before a likely cyclical pick-up in 2H17.

“Our view is that the trough in EPS is still more than 6 months away and, with our observation that the market lacks consensus on the timing of a cyclical pick-up, we would expect yield stocks to continue doing relatively well in 1H17 and would look to add cyclicality for 2H17,” say UBS analysts Cheryl Lee and Rachael Tan in a report on Monday.

Specifically, they expect Singapore’s market to achieve a trough in earnings by the end of 2017, catalysed by the gradual tightening of monetary conditions globally as well as higher SGD interest rates due to US interest rate hikes.

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