Hospitality is still “on the table”
Analysts, on the other hand, seem a little brighter about the outlook for the hospitality sector.
For example, RHB Singapore has adopted Genting Singapore as one of its preferred stocks for the next year. Apart from reopening Singapore’s borders to fully vaccinated countries, more countries are likely to continue to ease travel restrictions, helping integrated resort operators recover. ..
Indeed, recovery is still a “runway” as strict travel measures remain in the major markets of North Asia, China and Japan, which accounted for one-third of the pre-pandemic footprint in both games and non-pandemics. The “last leg” may be missing. CGS-CIMB analyst Tay Wee Kuang describes the gaming facility in his report.
Nonetheless, Singapore has relaxed its national rules to allow it to host large-scale work-related events for up to 1,000 people, allowing more business activities to resume. Although the pace is slow, recovery to pre-COVID activity remains at the table.
Beyond that, Business Trust, which has hotels in its portfolio, is also in the good books of some market analysts.
As travel demand increases, better occupancy levels and room rates are seen, as well as Ascot Residence Trust and CDL Hospitality Trust, which have delved into the “long-stay” asset class during the pandemic process as part of their portfolio diversification. I did. Natalie Ong of Phillip Securities Research told CNA.
“They aren’t idling. Instead, they’re trying to strengthen their portfolio by incorporating other streams of stable income,” research analysts say, and most hospitality trusts are still at pre-pandemic levels. Is about 15 to 20 percent below.
Analysts recommend investors continue to defend against the confluence of rising inflation and external growth risks, but said there are opportunities in other parts of the Singapore market.
“We expect the market to continue to fluctuate due to increased external risk,” an analyst at CGS-CIMB said in the Singapore Strategy Report. “We advocate short-term defensive positions for REITs (real estate investment trusts) and high-yield stocks and maintain a constructive stance towards capital goods.”
The technology and banking sectors have also “returned to average valuations and were priced with some of the slow-growing expectations,” they added, offering long-term opportunities.
In a report dated June 1, RHB reiterated its “Barbell Portfolio Strategy with Healthy Weights for Defense Equity.”
“The defensive implications of things going south are that the company is still making money and its cash flow isn’t going to go away completely,” Jaiswal said.
This includes banks benefiting from the current rising interest rate environment, companies less susceptible to inflationary pressures such as the commodity sector, and banks that can continue to expand margins such as their home phone company Singtel and taxi operator ComfortDelGro. It is included.
Morgan Stanley equity analysts Wilson Ng and Derek Chan said the headwinds of cost inflation, given that Singapore’s banks are “actively leveraged for both rising and resuming interest rate themes.” He said he was “in a particularly good position” to overcome the problem and bring about sustainable growth in earnings and dividends. ..
“Banks may be a more viable alternative to real estate and travel-related sector equities as a haven against high inflation, as multiples of valuations do not appear to be over-expanding, we said. I believe, “they wrote in a May 12 report.
Apart from banks, Ng and Chang also like energy stocks, but technology stocks can “provide a long-term growth story with a much more attractive rating than before.”