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29-09-2010, 08:33 PM
STI at 4,000 by 2012?
by Rachel Kelly and Julie Quek rachel@mediacorp.com.sg 05:55 AM Sep 29, 2010
SINGAPORE - The benchmark Straits Times Index (STI) could hit a record 4,000 points by the end of 2012, underpinned by strong growth in corporate earnings as the economic recovery gathers steam, some analysts say.
Companies are expected to report record earnings in the next two years, with earnings here forecast to rise about 8.9 per cent next year and 9.8 per cent in 2012, according to unit trusts distributor Fundsupermart.com.
Across Asia excluding Japan, earnings are expected to grow by 11 per cent during the period, it added.
"The last time we had record earnings growth was in 2007 ... that was also the time that markets hit record all-time highs," said Mr Wong Sui Jau, general manager of Fundsupermart.com.
The blue-chip STI, which closed at 3,097.35 points yesterday, has climbed around 6.9 per cent in the year to date. It is still some 20.7 per cent below its all-time high of 3,906 in October 2007.
Meanwhile, small cap stocks gained 3.2 per cent in the year to date as represented by the FTSE Straits Times Small Cap Index. The index ended at 565.67 yesterday.
Yet, the current level of the small cap index is still 44 per cent below the October 2007 high of 1,011.16.
This may be the start of a broad-based rally across blue chips and small-cap stocks in the long run, analysts said, although some volatility fuelled by global uncertainty could play up in the short-term.
"Tourism will be one of the key drivers for Singapore stocks going forward, driven by increased tourist spending due to the two integrated resorts here," said Mr Wong.
But some analysts are cautious about small caps.
"I think if you look at the small cap space right now, a lot of them have risen considerably. But it is very unlike 2007... Where there are stocks that had gone up three or four times, many of them without fundamentals," said Mr Terence Wong, co-head of research at DMG and Partners.
by Rachel Kelly and Julie Quek rachel@mediacorp.com.sg 05:55 AM Sep 29, 2010
SINGAPORE - The benchmark Straits Times Index (STI) could hit a record 4,000 points by the end of 2012, underpinned by strong growth in corporate earnings as the economic recovery gathers steam, some analysts say.
Companies are expected to report record earnings in the next two years, with earnings here forecast to rise about 8.9 per cent next year and 9.8 per cent in 2012, according to unit trusts distributor Fundsupermart.com.
Across Asia excluding Japan, earnings are expected to grow by 11 per cent during the period, it added.
"The last time we had record earnings growth was in 2007 ... that was also the time that markets hit record all-time highs," said Mr Wong Sui Jau, general manager of Fundsupermart.com.
The blue-chip STI, which closed at 3,097.35 points yesterday, has climbed around 6.9 per cent in the year to date. It is still some 20.7 per cent below its all-time high of 3,906 in October 2007.
Meanwhile, small cap stocks gained 3.2 per cent in the year to date as represented by the FTSE Straits Times Small Cap Index. The index ended at 565.67 yesterday.
Yet, the current level of the small cap index is still 44 per cent below the October 2007 high of 1,011.16.
This may be the start of a broad-based rally across blue chips and small-cap stocks in the long run, analysts said, although some volatility fuelled by global uncertainty could play up in the short-term.
"Tourism will be one of the key drivers for Singapore stocks going forward, driven by increased tourist spending due to the two integrated resorts here," said Mr Wong.
But some analysts are cautious about small caps.
"I think if you look at the small cap space right now, a lot of them have risen considerably. But it is very unlike 2007... Where there are stocks that had gone up three or four times, many of them without fundamentals," said Mr Terence Wong, co-head of research at DMG and Partners.
