STI to breach 3,000 in H1 2010, say market watchers

STI to breach 3,000 in H1 2010, say market watchers
Dec 30, 2009 - PropertyGuru.com.sg

Singapore’s Straits Times Index (STI) managed to end the year higher by 60 percent, despite weak response in the first three months, with various sectors being lifted by stimulus measures and pent-up liquidity from market players waiting to enter the market.

Terence Wong, senior vice president and co-head of research at DMG & Partners Securities, said: "Another thing that stuck out obviously, was the big great run that we saw since the second week of March.”

"In fact the STI has gone up over 90 per cent since that period of time, and I believe that has been one of the most impressive runs in recent memory."

"One of the sectors that I like is hospitality. I think 2010 is the Year of Visit Singapore, and there are a lot of things that are happening, chief of which would be the opening of the IRs (integrated resorts).”

"I think with the improvement in the global and regional economies, there will be a return of the tourism dollar," he added.

Vice president of SIAS Research, Roger Tan, said: "We saw good news coming from the property sector, especially the mass market sector, and that encouraged the property sector to thrive a little bit.”

"Then we also saw the banks coming back, and the oil and gas sector, because of the expectation that in 2010 and 2011, we could see higher demand from oil."

Looking forward next year, experts said that there are rooms for industries to pull ahead, including hospitality and property counters, with exposures to several cities in China.

"The Chinese government has to continue with its urbanisation, has to continue encouraging the urbanisation rate,” Mr. Tan said. "So a lot more attention will be paid down to second- and third-tier city development, away from the first-tier cities which have already benefited from the last ten years of development."

Most market watchers expect the STI to breach 3,000 in the first half of 2010. However, a slower second half is also expected due to the uncertainty behind the economic recovery in the US.