Global investors have experienced an ugly 2022. In fact, most of the stock markets were in the red as we entered the last two months of the year.
However, the Singapore market has been one of the more resilient markets in 2022.
The S&P 500 Index and the tech-heavy NASDAQ Composite Index in the US are down by 21.1% and 32.7% year-to-date (ytd) respectively.
Meanwhile, Singapore’s benchmark equity index, the Straits Times Index (STI), was only lower by 0.6%.
Elsewhere in Asia, Hong Kong’s Hang Seng Index has already lost 34.5% during this time while neighbour Malaysia’s FBM KLCI is down by 8.6% ytd.
Source: Bloomberg
So, for investors who are interested in buying stocks listed on the Singapore market, here are the top five Singapore stocks that investors can buy in November.
1. DBS Group
Singapore’s largest bank, DBS Group Holdings Ltd (SGX: D05), is one of the standout performers in 2022.
DBS reported new record-high earnings in Q3 FY2022 and 9M FY2022 with net profit of S$2.24 billion and $5.85 billion, respectively.
The strong earnings were attributed to higher net interest margin (NIM) and sustained business momentum.
During the period, net interest income (NII) increased by 44% year-on-year (yoy) to S$3.02 billion while NIM was up 32 basis points (bps) to 1.9% from the previous quarter.
Source: DBS Q3 FY2022 Financial Results
According to the group, underlying loan momentum during the quarter stood strong on the back of faster non-trade corporate and housing loan growth.
The gains were moderated by lower trade loans as maturing exposures were not replaced due to “unattractive pricing”.
Including trade loans, overall loans rose to S$429 billion. In constant currency terms, loan momentum grew by 2% yoy in Q3 FY2022.
As mentioned in my previous article, Singapore banks will continue to benefit from the rising interest rate environment.
I believe that DBS Group will help investors manage the volatility in the market. With a forward dividend yield of 4.2%, this will be a suitable stock for long-term dividend investors as well.
2. SIA
Investors might remain wary about investing into Singapore Airlines Ltd (SGX: C6L), the national airline, following the impact of the COVID-19 pandemic and rising oil prices.
However, with the reopening of the Singapore economy and international borders, I believe that it is the right time to buy SIA given its track record as one of the top global airlines.
Recently, SIA announced that it will redeem the whole of the first tranche of its Mandatory Convertible Bonds (MCBs).
This makes sense since the airline has ample cash. As of 30 June 2022, SIA had a S$16.1 billion gross cash balance and a small net cash position after deducting its total debt of S$15.7 billion.
The airline will also be announcing its Q2 FY2023 earnings results, which is expected to be an improvement from the prior quarter.
This is supported by F1’s Singapore Grand Prix event in September and the widespread return of travel during the quarter.
While risks remain with persistent high oil prices, the resumption of its airline business and the pent-up demand in travel will support an earnings recovery in the near term.
3. CapitaLand Ascendas REIT
CapitaLand Ascendas REIT (SGX: A17U) has just reported solid earnings for its Q3 FY2022.
Despite that, the REIT has seen a sell-off in 2022 amid the rising interest rate environment.
However, the market weakness should provide an opportunity for investors to accumulate shares in CapitaLand Ascendas REIT in order to benefit from its upside potential over the long term.
It is Singapore’s first, and largest, business space and industrial REIT player with assets in three key segments; 1) business space and life sciences, 2) logistics, and 3) industrial and data centres.
During Q3 FY2022, portfolio occupancy continued to improve while portfolio rental reversion remained positive at 5.4%.
Given its exposure in a diversified space, this should provide some stability for the REIT player as demand for logistics and data centres remain strong.
In fact, CapitaLand Ascendas REIT has announced the acquisition of two more properties in Singapore worth a total of S$296.7 million.
The acquisition also represents the REIT’s maiden foray into cold storage facilities in Singapore.
Its forward distribution yield of 5.9% also makes it attractive, even with rising rates on the horizon.
4. Sheng Siong Group
Sheng Siong Group Ltd (SGX: OV8) is a defensive play for investors amid rising inflation and a potential economic slowdown.
While the supermarket chain reported a 4.6% yoy decline in its net profit to S$32.8 million in Q3 FY2022, it has managed to maintain a healthy gross margin level of around 30%.
The decline in earnings and revenue during the quarter reflects the shift towards normalcy as consumers shifted to dining out.
The group, however, has maintained its expansion plans with three new store openings and one closure in FY2022, bringing its total store count to 66.
With rising inflation, disposable income becomes constrained and, as a result, consumers could cut spending on dining out.
That should force them to look for value-for-money goods, such as those offered by Sheng Siong.
Sheng Siong is also likely to benefit from the Singapore’s government’s S$1.5 billion Support Package.
5. NIO
One of the electric vehicle (EV) players that I believe investors should consider is Nio Inc (NYSE: NIO) (SEHK: 9866) (SGX: NIO).
Nio delivered 10,059 vehicles in October, representing an increase of 174.3% yoy.
The deliveries consisted of 5,979 premium smart electric SUVs including 2,814 ES7s, and 4,080 premium smart electric sedans, including 1,030 ET5s and 3,050 ET7s.
This was in spite of the constraints faced in its operations due to the COVID-19 restrictions in certain regions of China.
The strong delivery numbers reflect the capabilities of management to navigate through the uncertainties in the supply chain.
Aside from that, Nio’s expansion plans into Europe are also likely to boost earnings growth in the near future.
The company has announced that that it will offer leases on its ET7, EL7 and ET5 models through a subscription model designed to encourage the shift towards EVs.
Another key question is the path to profitability for Nio and consensus is expecting the company to post its final loss in FY2023 before turning a profit in FY2024.
Given the continued support shown by the Chinese government to the EV industry – as well as the strong demand in China despite the supply chain disruptions – I believe Nio is worth having in one’s portfolio.
Take advantage of market weakness to build a balanced portfolio
In November, I believe it is a good time to buy into resilient companies, such as DBS Group and Sheng Siong, tap on the reopening theme with Singapore Airlines, accumulate S-REITs such as CapitaLand Ascendas REIT, and take advantage of market weakness to buy high growth stocks such as Nio.
Overall, the key is to build a balanced portfolio that allows investors to tap into emerging opportunities without taking excessive risk.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
