SINGAPORE stocks recorded a relatively flat performance in 2023, despite headwinds from rising interest rates as well as geopolitical uncertainties during the year.

The FTSE ST All-Share Index – which tracks the performance of the top 98 per cent of companies listed on the SGX, ended the year down 1 per cent. Meanwhile, the benchmark Straits Times Index (STI) closed the year at 3,240.27, down 0.3 per cent from 2022.

SGX market strategist Geoff Howie noted that the STI had a “relatively immobile 2023”, trading between 3,041.67 and 3,408.19, the narrowest percentage trading range based on available data dating back to 1985.

Among STI constituents, Sembcorp Industries (SCI) was the top performer, gaining 57.1 per cent during the year. Other index outperformers include Keppel Corp, which was up 53.3 per cent and Singapore Airlines, which was up 18.6 per cent.

While the STI traded sideways, Carmen Lee, Singapore strategist at OCBC Investment Research, noted it has been a “roller-coaster ride” in 2023 amid the collapse of Silicon Valley bank as well as growing tensions in the Middle East.

“Higher interest rates and a weak property market have also impacted sentiment,” she said.

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Meanwhile, UOB Kay Hian analyst Adrian Loh noted that counters in the aviation, industrials as well as small/mid-cap sectors fared well, despite what was seen as a difficult year.

This came as overall economic activity rebounded and optimism surrounding the normalisation of air travel took hold.

Loh attributed the outperformance to a combination of a better business outlook given significant oil and gas price increases in the past 12 months, as well as company-specific factors.

These include SCI’s continued business transformation from brown to green energy, Keppel Corp’s disposal of Keppel Offshore and Marine, and the sustained recovery of air travel for Singapore Airlines.

Howie from SGX noted that the three top-performing stocks on the STI are going into 2024 at premiums to their five-year average price-to-book (P/B) ratios. Other index counters that are also trading at a premium to their historic P/B ratios include Seatrium, DBS and OCBC.

Meanwhile Thai Beverage, DFI Retail, Jardine Matheson Holdings, Sats and Venture Corporation are going into 2024 with the highest discounts to their five-year P/B ratios.

Across the broader Singapore market, property developer and hotel group Amara Holdings was the top-performing stock, when considering companies with a market capitalisation of at least S$250 million, according to Bloomberg data.

The counter has risen 87.5 per cent to S$0.60 over the year, following a privatisation bid from a consortium linked to Albert Teo, the hotel group’s chief executive, other members of his family and private equity investor Dymon Asia.

Meanwhile, food manufacturers Food Empire and Delfi were also among the outperformers, rising 78 per cent and 44.5 per cent, respectively, in 2023

RHB analyst Shekhar Jaiswal noted that Food Empire is among those in the small-cap space that the brokerage prefers exposure to, given strong earnings tailwinds.

“We expect growth to be driven by key markets in Russia, Ukraine, Kazakhstan, the Commonwealth of Independent States (CIS), and Asean,” he said.

Delfi is also among the brokerage’s preferred picks, given that the counter is a beneficiary of Indonesia’s growing middle class and rising consumption.

“We are overweight on the consumer sector on stronger regional consumer spending going forward. We see stronger GDP growth and post Covid-19 re-opening and normalisation translating into stronger domestic consumption growth regionally in 2024,” Jaiswal said.

Another outperformer in the Singapore market has been oil and gas contractor Dyna-Mac Holdings. With its closing price of S$0.335 on Dec 29, the counter has risen 78.2 per cent from S$0.188 the December before.

Dyna-Mac shares had traded as high as S$0.44 in August 2023 but saw a correction in recent months. Maybank analyst Jarick Seet believes that the share price correction is overdone, and sees an attractive opportunity, given the stock’s “sound fundamentals and exciting growth prospects”. He has a buy rating on Dyna-Mac, with a target price of S$0.51.

In the semiconductor space, Frencken was one that did well in 2023, with its shares gaining 42.9 per cent over the year to S$1.35. This was a reversal from 2022, when the counter was among the worst performers, with its shares falling 52 per cent.

UOB Kay Hian said that Frencken would benefit from positive market trends in 5G, Internet of Things and artificial intelligence. It also noted that the company has long-term growth supported by diversified segments, as well as new programmes.

Other notable performers this year include financial services player iFast Corporation, which rose 40.6 per cent, also rebounding from losses of 30.5 per cent in 2022.

Howie noted that iFast was among the top 10 counters with the highest net institutional inflow in 2023.

However, not all companies managed to rebound from their 2022 losses in 2023.

Shares of Nanofilm International continued to face pressures in 2023, ending the year as one of the worst-performing Singapore stocks, slipping 34.2 per cent to S$0.915.

This extended its losing streak from 2022, when the counter fell 63.6 per cent.

DBS analyst Ling Lee Keng noted in a November report that the outlook for Nanofilm “remains challenging” as order momentum could still be slower compared to the previous year.

The worst-performing stock with a market capitalisation of above S$250 million was 17Live Group, which recently listed on the Singapore Exchange via a special purpose acquisition company merger with Vertex Technology Acquisition Corp.

Shares of 17Live have plummeted following the completion of the business combination, which saw heavy redemptions from independent shareholders.

The counter ‘s closing price of S$1.55 on Dec 29 is just a fraction of VTAC’s initial public offering price of S$5, and down 65.8 per cent from the S$4.53 levels VTAC traded in December 2022

Counters in the real estate sector also struggled in 2023. Yanlord Land and Oxley Holdings ranked among the worst performers, with their shares falling between 43.1 per cent and 30.3 per cent, respectively.

Among STI counters, Hongkong Land Holdings was the worst-performing stock, with its shares falling 24.3 per cent in 2023.

OCBC’s Lee noted that the property sector, which was hurt by high rates in 2023 could enjoy a reprieve as rates are expected to come off in 2024, with the Fed signalling three rate cuts in the year.

“In terms of valuations, both real estate and Reit sectors are trading at close to 10-year lows in terms of price-to-book,” she observed, noting a recovery is possible in 2024.

Some of OCBC’s picks in the real estate sector for 2024 include CapitaLand Investment, City Developments and UOL Group.