With the Singapore market having outperformed year-to-date, we look at key alpha picks that can continue to do well in the face of uncertainty.

Share price performance of our top picks have delivered positive returns despite mixed market sentiments amid the high interest rate environment (Food Empire +7%, Delfi, +3%, Civmec 0%). The improving China economic data have lifted market sentiments. However, the high interest rate environment has led to several bank failures and have cast uncertainty.

We will reveal small/mid cap gems that could potentially outperform the STI Index. We will also reveal an infrastructure related company which offers attractive dividend yield.

China’s reopening since Jan 23 has injected momentum into the global aviation sector’s recovery. Now with global air travel already at about 85% of pre-pandemic levels, recovery would continue and but the pace may moderate going forward. Airlines are no long cheap and macroeconomic uncertainties remain ahead with a risk of global recession. Against this backdrop, we will present our updated view for the Regional Aviation Sector including Aviation plays in Singapore and China.

Conventional wisdom suggests that interest rates have peaked and could fall precipitously as early as 2H23. The crisis engulfing US regional banks and their exposure to commercial real estate did put a cap on rises in interest rates. Unfortunately, core inflation remains elevated. Rising fiscal spending on social welfare, healthcare, defence and interest outlays cause persistent government budget deficit, which also exerts upward pressure on inflation and interest rates. We are selective buyers of Singapore Banks.

US equities are trending higher. The S&P 500 is forming higher lows and higher highs. Expectations are for a rebound in corporate earnings in 2H2023. However, investors are avoiding being too far out on the risk spectrum. Most economists are forecasting a US recession within the next twelve months. Companies with wide moats have been outperforming, and appear likely to remain investor favorites.

The Hong Kong stock market underperformed in 1H23. Entering the second half of the year, the views on the path for interest rates between the market and the US Federal Reserve are still divergent and China's economic recovery is more irregular than expected. The market is also still concerned about rising geopolitical risks. How should investors draw up their investment plans?