With the reversion of the Disease Outbreak Response System Condition (DORSCON) Level from Orange back to Yellow, we are seeing convincing signs of society reverting back to normality for the time being. As an avid observer of the happenings in our lion city, here are some key pieces of news that I came across in the past week.
- Overview of measures being Eased : PM Lee
- Return of F1 in 2022 : Tickets sold out in a pinch.
- Return of GSS 2022 : Haven’t heard GSS in a long time right? It will be happening both online & offline.
- Renewed optimism in Travel & Tourism : Both inbound and outbound.
- Resumption of Nightlife + KTV
- Return of Exhibitions in Expo : Business Expos are starting to return. Check out Food & Hotel Asia + Singapore Business Show
Overall, it is apparent that this move back to normality is unlikely to be met with any resistance even if another variant reaches our shores. As we look to rev up our city in the coming months, here are some reopening picks (by sector) which should be on your watchlist!
5 SGX stocks to watch this week
Travel & Tourism
With borders reopening (and staying opened), it is a matter of time before we see tourist arrivals reach pre-pandemic levels. This is evident as even Changi Airport is looking to reopen Terminal 2 as it completes its renovation works.
1. SATS (SGX:S58)
I find SATS to be the preferred pick in the travel sector due to the diversity of their business verticals. Most people would know SATS to be more of an airline caterer however their revenue streams also flow in from baggage handling as well as domestic food manufacturing.
The President and Chief Executive of SATS firmly believe in the company’s “strategy to focus on both travel and non-travel food will (to) ultimately create a more resilient business.”
2. Genting Singapore (SGX:G13)
The well-known conglomerate Genting Singapore continues to be at the top of my watchlist. While the appeal of Universal Studios has faded over the years, Genting is now set on a RWS 2.0 plan which includes a thorough refurbishment plan stretching over its hotels and theme parks. This could be an indication of value that has yet to be unlocked for Genting in the coming years.
Retail
The Great Singapore Sale is set to return this year! More than just a one-time catalyst, I believe that this move strongly indicates the government’s resolve in reviving local retail. I’d watch these 2 REITs under this category:
3. Starhill Global REIT (SGX:P40U)
Starhill remains a pick as their luxury malls have indeed missed their fair share of tourist in the past 2-3 years. I believe that Orchard is still a competitive retail shopping strip in Asia. No need for us to look too far into the future, head down to either Wisma or Ngee Ann City and you’ll find it packed to the brim with eager shoppers!
4. Lendlease Global Com REIT (SGX:JYEU)
With their recent equity offering, the price action of Lendlease has seen some action of later which may potentially be an accumulation opportunity for interested parties. Lendlease has done relatively well during Covid due to their diversified property portfolio. 313@Somerset is now in the spotlight and is set to be a key benefactor as we see traffic start returning to orchard. It would seem that management is aware of this too as they recently mentioned that a “refreshed tenant mix” is underway in the coming months.
F&B
The overall theme is that tourists will indeed start to return to Singapore in busloads. In this scenario, amongst all the F&B companies in Singapore, only 1 comes to mind and that’s Jumbo Seafood.
5. Jumbo (SGX:42R)
Covid hasn’t been kind to F&B over the past 2 years but of all players, Jumbo probably felt the impact more than others. As such, they are indeed due for a rebound with support forming at the $0.30 mark. Jumbo has always been famed for serving tourists and I do see that happening once again this year. In addition, I have observed an increase in activity from Jumbo as they have indeed opened new outlets/concepts this quarter. There may be more going on here that meets the eye.
Shift in consumer behaviour
With 100% of the workforce being allowed back to work, we will see some shifts in consumer behavior. For one, it is likely that traffic in neighborhood malls will slow as malls in the city start to pick up. Businesses which depend on Tourist as a source of revenue will also likely see their revenues start to pick up as we start to relax entry requirements.
While global macroeconomic tailwinds still surround us (FED Rate hike etc.), its good to see that there is still fight left in us here at home.
