The firm has slightly raised its CYF MSCI target to 411.7 points, up from 409.3 points previously.
CGS International reaffirmed their bullish outlook on REITs and maintained an overweight (OW) stance on Capital Goods, Consumer, Construction, Gaming, Technology, Gloves, Internet, and Commodities.
Despite economic uncertainties, the firm has slightly raised its CYF MSCI target to 411.7 points, up from 409.3 points previously, driven by 15x CY25F earnings projections.
Despite broader market uncertainty, REITs are set to outperform, CGS analysts said, citing peaking fund costs and positive rental reversions.
They expect DPU (distribution per unit) growth of 1% in 2025F, positioning REITs as a strong defensive play. Lower interest rates are also expected to enhance REITs' acquisition capabilities, adding further upside potential.
Singapore remains an attractive market for dividend-seeking investors, analysts noted, with MSCI SG's dividend yield projected to rise from 4.1% in FY24 to 4.6% in FY25F.
They highlighted that 53-60% of covered stocks are expected to deliver dividend growth over the next two years.
Beyond the banking sector, Singapore-listed companies such as STE, SCI, YZJSGD, CLI, and UOL have made moves to increase shareholder returns through higher dividend payouts and improved capital allocation.
CGS analysts maintain an overweight stance on high-growth sectors, including Technology, Gaming, and Commodities, while remaining neutral on Banks, Healthcare, Transport, and Telcos (with Starhub recently downgraded).
They have refined their top 10 Singapore stock picks, introducing UOL and KDCREIT, while retaining iFAST, CLAR, KEP, YZJSGD, PAN, FEH, MPM, and Q&M.
Stocks such as SCI, ST, STE, STM, and UOB have been removed due to overvaluation and a lack of near-term catalysts, while SATS was dropped due to global trade uncertainty.
4QFY24 results revealed mixed sector performances, with Capital Goods, Finance, and Technology stocks leading the outperformers, analysts said.
Notable winners included SGX, iFAST, and YZJSGD, whilst UOB posted stronger-than-expected earnings. However, Property and REITs underperformed, with developers such as CLI, CIT, and UOL missing earnings expectations.
Within REITs, office and retail REITs lagged, whilst diversified, industrial, and hospitality-focused REITs remained resilient.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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