- Singapore equities eked out a modest gain of 0.6% in April. YTD26, it is up 5.7%. Cyclicals led the recovery as markets price in the worst of the Middle East conflict is over. Transportation was the weakest sector as energy prices remained elevated despite the apparent ceasefire.
- On the horizon, we see two monster or Godzilla cycles. The semiconductor sector is accelerating to record highs. We expect a Godzilla cycle in semiconductors, bolstered by the massive 70% ramp in big tech capex due to AI, huge funding from the IPO of three LLMs in 2H26, US$119bn SpaceX Terafab, and accelerating revenue growth of AI companies. The next potential monster to watch is palm oil prices. Rising temperatures point to a Godzilla El Niño by year-end, which will plunge production and drive up prices.
- The energy shock from the Middle East has largely impacted emerging markets. Consumer spending will be under pressure from rising energy and food costs. It will be a headwind for the consumer and the telecommunications industry. The sectors we are overweight are riding the “build, build, build” investment theme underway globally, including digital infrastructure, renewables, defence, construction, building materials, and commodities.
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