Benefiting from upcoming FED pivot


Market view update
Markets cheered on the FED’s expected downshift to 25bps rate hike and acknowledgement on easing inflation.

This was despite Powell hinting that interest rates could even head above 5% before pausing and playing down rate cuts this year.

DBS economist sees Fed fund rates to peak at 5% in 1Q’23, and hold through 2023.

We have rightfully positioned investors into FED pivot beneficiaries in our strategy reports in the past 2-3 months (Regional Outlook 2023 and Singapore Outlook 2023).

S-REITs: Investors who were positioned roughly 2 months ahead of the Fed’s pause get rewarded with an additional 200bps in alpha, as highlighted by DBS property analysts.

 Technology: DBS analysts noted that recovery of the tech sector could happen as early as 1Q’23, i.e., with the peaking of the Fed Funds Rate.


The ongoing earnings season highlights the need to be selective in sub-sectors and/or names:

• S-REITs: Positive on reopening beneficiaries (MPACT, CLAS, CLCT), suburban retail (FCT, LREIT, CICT), and industrial names (CLAR, FLCT, CLINT)

• Technology: UMS and Venture as our sector top picks



Stock to Watch
Wilmar International -- Non-material impact from Adani Group news

Wilmar Nodeforest1.21

Concerns on Wilmar’s joint venture with Adani has emerged in lieu of recent negative headline news surrounding the Adani Group.

• Wilmar has a joint Venture with Adani Group called Adani-Wilmar (AWL), one of India’s fastest growing food companies, with Wilmar having a 44% stake (AWL) post-IPO.

• Negative investor sentiment around Adani due to its alleged accounting fraud has caused the its flagship company Adani Enterprises to lose 36% of its market cap since 24 Jan.


We do not expect Wilmar to see a material impact from Adani’s headline news.

• In the worst case scenario where AWL’s share price drops to IPO level (IPO price INR230, current INR443) , our analyst does not expect Wilmar to recognise any impairment losses due to its equity method JV method investment in AWL.

• Further, in FY21, AWL’s earnings reflected as JV Income amounted to c. USD50m, which is non-material compared to Wilmar’s earnings of USD1.9bn.


Wilmar’s shares have underperformed the STI in the past 2 months, and any share price weakness due to Adani news will likely be more sentiment driven.

• Wilmar’s revenue comes mainly from China (50%) followed by Southeast Asia (20%) while India contributed just 2.9% back in 2HFY22.

• Our plantation analyst continues to favor Wilmar for its relatively steady earnings outlook compared to peers and attractive valuation trading at -2SD of its 5-year average PE.

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