Maybank Kim Eng analysts Thilan Wickramasinghe and Gene Lih Lai are convinced that a new phase is about to unfold for the Straits Times Index (STI).

In a Sept 7 research note, the analysts note that earnings momentum is losing some steam, with half of Maybank Kim Eng’s coverage sectors witnessing h-o-h declines in net profit after tax. However, the market saw a 94% h-o-h increase, largely driven by a turnaround in retail REITS and industrials, combined with better performance from financials due to falling provisions.

Nonetheless, Wickramsinghe and Lai anticipate slower earnings per share (EPS) upgrades for certain sectors in the coming months.

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