Robust outlook for Singapore’s healthcare sector

SINGAPORE (July 20): KGI Fraser Securities believes Singapore’s healthcare sector will continue to outperform the general market, but advises investors to wait for price pullbacks before accumulating the stocks.

In a Wednesday report, analyst Joel Ng notes that Singapore’s healthcare stocks have outperformed the Straits Times Index (STI) over the last 1–2 years, and will continue to do so in the long-term for three key reasons:   

1. Resilient and promising valuations
In Ng’s view, the high valuations of healthcare stocks are due to the industry’s potential for future growth, such as through expansion plans, as well as the healthy earnings growth it has enjoyed over the last couple of years. He adds there is possibility that the stocks’ valuations – which are currently at multi-year highs – may continue to be supported by earnings growth and their defensive nature amid an uncertain economic landscape.

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