Singapore's earnings growth to rebound to 14% in 2013

Good times are back after a weak 5% growth over the past 6 quarters.

According to DBS, earnings growth for Singapore is expected to rebound to 14% in 2013, after two years of negative and flattish growth. However, weak global economic outlook threatens to derail growth, which is the same issue we struggle with for 2012’s growth. Downgrades over the past 6 quarters saw growth diminishing to only 5% for 2012.

Here's more from DBS:

Weak growth pillars in 2013
While FY12 earnings could stabilize at current levels, FY13’s earnings growth of 14% is largely driven by rebounds in cyclical sectors which hit a low this year – Basic Materials, real estate, industrials and consumer goods – where growth is dependent on external economies.

With expectations of more downgrades than upgrades in the upcoming reporting season, we expect downside for earnings, especially 2013. Upside could come from banks, oil and gas and transport sector(on lower fuel cost). Cuts in earnings could come from :

Real estate - slower sales and lower ASP
Technology - unreeling from destocking trend
Gaming - lower than expected rolling chips,
Supply chain managers- swing by volatile commodity prices,
Healthcare and Aerospace sector - rising cost
Offshore and marine – lower than expected margin
Shipping - peak season shipments could disappoint.

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