Stocks seem set for another listless week, as there are no new leads or significant data in the run-up to New Year’s Day.
No Christmas rally was seen last week, with the STI ending the week 9.21 points or 0.3 percent lower at 3,143.80.
The FTSE ST All-Share index, which tracks 241 of the most liquid stocks in Singapore, also ended the week marginally lower, down 0.2 percent.
Investors could use the coming week to look into research from brokers to search for stocks that could offer decent long-term returns.
According to the investment research team of OCBC, the Singapore market is a good bet for next year due to low interest rates, continued fund inflows and undemanding valuations.
Though the STI is up 8.5 percent to date this year, many of its members including real estate stocks CapitaMalls Asia and CapitaLand, and lenders UOB and DBS Group have under-performed.
Some of these stocks will likely benefit from a re-rating by investors next year, said OCBC analysts in a strategy update.
“While global concerns over banking stocks’ performances and the stricter regime under Basel III remain, local banks are more prudent and have continued to deliver good earnings with strong asset backing, good returns on equity and decent dividend yields,” they said.
Other STI members that have seen declines in their share prices to date this year are SingTel, Singapore Exchange and transport operator ComfortDelGro Corp.
The STI is currently trading at about 12.5 times past earnings, and 15.3 times expected earnings for next year, based on estimates compiled by Bloomberg. At an average of 1.8 times book value, STI stocks are barely expensive compared to other stocks like the S&P 500 index stocks, said OCBC analysts.