Analysts tell investors to stay defensive amidst uncertain US Fed policy action

Preferred exposure is healthcare, industrial REIT sectors, and consumer staples.

The Singapore equity market will be challenged in the near term due to the uncertainty of the US Federal Reserve’s policy action and Singapore’s economic growth outlook, said RHB.

Whilst expectations of Chinese tourism arrivals returning will bode well for tourism-linked sectors in the second half of 2023, investors should favour defensive and quality plays in the second quarter of 2023. 

With this, RHB recommended the preferred exposure to consumer staples, healthcare, and industrial REIT sectors. 

Investors are to be on alert after the MAS statement

The Monetary Authority of Singapore’s (MAS) recent policy statement could keep investors on their toes, RHB said. 

Economic growth in Singapore may be at 2% due to the expected strong economic recovery.

“However, in its April policy statement, MAS noted that Singapore’s GDP growth outlook for 2023 had dimmed,” said RHB.

MAS noted lacklustre from a global manufacturing, a boost from regional economies reopening will fade this year, and China’s rebound will mostly be from consumption-driven and oriented towards domestic services.