DBS, June 2026
Excerpt from DBS report.
Report Summary
- The Iran conflict has sparked a risk-off reaction, potentially causing the Straits Times Index (STI) to test 4,800, a 5-6% pullback from recent highs.
- Historically, equity market drawdowns from conflicts are short-lived, averaging 6-7% within 60 days, but a prolonged conflict could re-ignite inflation and complicate US Fed rate cuts.
- Defence (ST Engineering) and oil & gas-related stocks (Nam Cheong, Seatrium, PetroChina) are expected beneficiaries; transport stocks (SIA, ComfortDelGro) and property/REITs may face headwinds from higher oil prices and uncertain Fed outlook.
- DBS recommends removing AEM Holdings, ComfortDelgro, and City Developments from its Singapore Equity Picks due to limited upside and increased risks.
- Key sector trends include rising oil prices, a multi-year construction super-cycle in Singapore, and positive outlooks for selected stocks such as CityDev, UOL, SATS, Seatrium, ST Engineering, Food Empire, Nam Cheong, Frencken, and UMS Integration.
- DBS will review its STI year-end target of 5,000 as market conditions evolve.
above is an excerpt from a report by DBS. Clients of DBS can be the first to access the full report from the DBS website: https://www.dbs.com.sg
