SINGAPORE (June 25): Singapore’s 13th general elections (GE) since its independence will take place on July 10.
See: Upcoming general elections will be like 'no other' because of gravity of situation and issues at stake, says PM Lee
CGS-CIMB analysts Lim Siew Khee and Jeremy Ng say that while the country’s GE usually have little to no impact on the stock markets, the market could be hungry for positive indicators this time round.
“The main focus for this election will likely be employment and the economy. We think PAP has done well with quick-reaction initiatives such as the $93 billion Covid-19 related stimulus,” the analysts say in a June 23 note.
“The budget has also set aside $13 billion in Contingency Funds for quick deployment if the need arises,” they add.
To prevent a spike in unemployment numbers, Lim and Ng foresee more Job Support Schemes to be rolled out progressively in 2021.
In 1Q20, overall unemployment rate rose to 2.4% from 2.3% in end 2019. Retrenchments hit 3,000 in 1Q20 (compared to 2,670 in 4Q19). This was led by the 2,200 job cuts in the service sector.
“We expect opposition parties to shift the agenda to issues pertaining to spikes in Covid-19 cases in foreign workers dormitory,” say Lim and Ng.
As such, the analysts think SPH could see an increased number in circulations and media coverage during the GE, and HRnet could benefit from the need for job creations.
Property stocks may not benefit, as the government may not relent on property measures, they say.
Lim and Ng are also positive on Koufu and UG Healthcare, as they add these two counters to the country’s top picks, along with Wilmar, Japfa, and Frasers Centrepoint Trust.
They have removed Sheng Siong from their list of picks.
The analysts predict a target of 2,495 for FTSE Straits Times Index (STI), as they predict the bearish momentum to continue closer to the 2,500 support area.
SPH and HRNet both have “hold” calls from the brokerage with target prices of $1.57 and $0.58 respectively
Shares in SPH closed flat at $1.33; shares in Koufu closed flat at 69.5 cents; shares in UG Healthcare closed flat at $1, on Wednesday.
