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SINGAPORE: The Singapore market has had a choppy time so far this year and analysts said it will continue well into the Year of the Tiger amid debt troubles in the European Union and credit tightening measures in China.
Market watchers do not expect a rally for Singapore stocks before the Lunar New Year, but said some sectors may still outperform the benchmark STI.
The festive season may be here, but markets are not yet cheering. The benchmark STI has fallen seven per cent from its January high, tracking its regional counterparts.
And volatility is expected to remain, with grim news from the European, US and China markets.
Hillary Ho, Unit Trust Investment Analyst, Phillip Securities, said: "There are factors like the debt crisis in Greece, and China tightening their measures to rein in soaring credit growth, as well as President Obama's plan to limit the size and trading operations of the banks in the United States.
"Until conditions improve, I think we can still expect some volatility in the market after the Chinese Lunar New Year."
The year ahead still appears optimistic, with observers saying the Asian recovery story remains intact.
The last time the Year of the Tiger rolled by, Asia was also in recovery mode, just coming out of the financial crisis of 1997, when the recovery was swift and strong.
But observers said Asia has grown into a very different kind of tiger this time around and investors would do well to watch the private sector independent of government support - signs like unemployment - to be sure that the Asian Tiger will roar again.
The potentially attractive Singapore sectors include hospitality, due to improving visitor arrival numbers.
Leng Seng Choon, co-head of Research, DMG & Partners Securities, said: "That would be a positive for hotel operators as the average room rates will tend to be firmer and at the same time, occupancy rates will also be higher.
"In addition, when you have more visitor arrivals, that will also help the aviation sector. These include companies like SIA and Singapore Airport Terminal Services."
Other favourites include consumer-related stocks, which have held up despite generally poor market sentiment. - CNA/vm
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