Photo: The Edge Singapore

CGS-CIMB Research analyst Lim Siew Khee has identified several counters, which she deems as “relatively defensive” as the country enters into heightened alert phase two measures.

These are: Keppel DC REIT, Singapore Exchange (SGX), Singapore Technologies Engineering (ST Engineering), Riverstone and Wilmar.

Lim has given the counters “add” recommendations for all except for Keppel DC REIT at “hold”, with target prices of $2.86, $11.61, $4, $1.80 and $6.15 for Keppel DC REIT, SGX, ST Engineering, Riverstone and Wilmar respectively.

These counters are likely to see “minimal implications” from the ongoing measures.


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For Keppel DC REIT, Lim expects “demand for data to increase in the medium term”. The REIT’s current FY2021 dividend yield of 4% “looks decent”.

SGX would be a “key beneficiary” of the second circuit breaker as investors look to place capital into financial markets in lieu of discretionary spending.

On this, Lim notes that the average monthly total market turnover on the SGX rose to $29.8 billion in 2020 (versus $22.1 billion in 2019) following the first round of circuit breaker measures implemented in April 2020.

“Given the average turnover of $30.3 billion in April, we see upside in trading volumes,” she writes in a May 14 note.

“On the flip side, [the current measures] introduce risks that banks may tone down their outlook on domestic economic recovery. That said, we think the impact on transaction-based fees may not be as severe as seen during [the first circuit breaker] as both banks and customers have since adapted to new-normal virtual practices,” she adds.

ST Engineering has a diversified business and strong order book of $15.7 billion as at end-March.

“Defence/public spending and strong demand for freighters globally should provide earnings visibility for the group and are key catalysts for the stock, in our view,” says Lim.

Glove stock Riverstone “offers strong near-term earnings visibility”, says Lim.

Its current valuation of 5 times FY2021 price-to-earnings (P/E) is cheap, in our view.”


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“Higher dividend payout remains a key catalyst – assuming 60% DPR, FY21F dividend yield could reach 13.2%,” she adds.

Wilmar’s earnings are “more defensive” than its peers, as proven by its record earnings in the 1QFY2021. The group derives 60% to 70% of its earnings from food products as well as feed and industrial products segments in China.

“Wilmar could benefit from higher consumer products sales which will help cushion any drop in demand from hotel restaurant and café (HORECA) sector during periods of lockdowns in some countries,” writes Lim.

Shares in Keppel DC REIT, SGX, ST Engineering, Riverstone and Wilmar closed $2.68, $10.23, $3.77, $1.49 and $4.82 on May 19.