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Investment opportunities

May 2024

Opportunities exist despite market volatility

Expect markets to stay volatile in the short term given a confluence of economic and geopolitical uncertainties. However, opportunities exist for medium term investors with the risk appetite and patience. In our view, the broader medium-term outlook remains positive given decent economic and earnings fundamentals, and an abundance of liquidity on the sidelines.

Positive outlook for Japanese equities

The Bank of Japan (BOJ) ended its negative interest rate policy at its March monetary policy meeting. Given that the BOJ said, the accommodative financial conditions will be maintained for the time being, we believe this dovish outlook will provide some assurance to the Japanese equity market.

In addition, investors who invest in Japanese equities on an unhedged basis can benefit from potential currency gains too if the Yen (JPY) appreciates in time to come, especially if the US Federal Reserve cuts rates.

Structured Investments

Theme: Getting real on returns

In the longer term, Japanese companies exposed to secular growth trends such as industrial automation and generative AI (which can help alleviate the burden of Japan’s ageing population and shrinking labour force) stand to benefit 

  • Fanuc Corporation is well positioned for long-term, secular growth in the factory automation (FA) and industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The robot division is Fanuc's largest business by sales, and the company is considered one of the big four in the industrial robotics space. As FA continues to grow across a variety of industries, Fanuc will be able to provide its robots to not just its current main customer base like the automotive and electronics industries (for example General Motors, Audi and Panasonic), but will be able to further expand its customer base in other industries such as food and healthcare.

  • Murata Manufacturing Co Ltd is a top global supplier of passive components (necessary for all electronic circuits) for electronic devices, with 40% global share of multilayer ceramic capacitors (MLCCs) and 40%-45% global share on surface acoustic wave (SAW) filters. Murata’s expertise in manufacturing smaller components is also expected to help maintain its market position in the industry. Various regulations for safety and environment require automobiles to adopt more electronic devices and controlling units. Thus, the growth of passive components per car is exceeding auto production. Murata’s market share of auto MLCCs is approximately 50% and revenue from auto is 19% of entire sales.


This bond is suitable for those looking for a quality corporate bond; Temasek Holdings as a major shareholder.

Singapore Airlines Ltd (USD)

This callable bond pays a coupon 3.375% p.a., with call date on 19 Nov 2028. It matures on 19 Jan 2029 if it has not been called.

For the third quarter ended 31 Dec 2023 (3QFY2024), revenue was higher by 4.9% year on year (y-o-y) on the back of higher passenger flown revenue (+10.6% y-o-y). The increase in passenger revenue was partly offset by cargo flown revenue which fell by 35.1% y-o-y. While the softer cargo outlook and possibility of softer passenger yield was highlighted by the company in past updates, SIA’s 3QFY2024 was also dragged by an increase in expenditure of 9.3% y-o-y, mainly attributable to an increase in non-fuel expenditure and lower fuel hedging gains. Consequently, operating profit was S$609mn, declining by 19.3% y-o-y, and net profit was higher by 4.9% y-o-y at S$658.7mn.

SIA’s gross debt-to-EBITDA is healthy at 2.5x. SIA still has about S$1.5bn of principal amount outstanding on the additional Mandatory Convertible Bonds (MCBs). These are intended to be redeemed, although the timing is not yet certain. When we conservatively assume the remaining MCBs as debt (given the intention to redeem), we find adjusted gross debt-to-EBITDA at 2.8x.


JPMorgan Global Income Fund

The JPMorgan Global Income Fund is a global, multi-asset income fund that aims to provide regular income by investing primarily in a portfolio of income generating securities, globally, and through the use of derivatives. The fund seeks income opportunities from around the globe and aims to provide investors with a consistent and potentially attractive income. 

Bond Funds

PIMCO GIS Income Fund

The PIMCO GIS Income Fund is designed for investors who seek steady income with a secondary goal of capital appreciation. It takes a broad-based approach to investing in income-generating bonds. The fund aims to achieve this by employing PIMCO’s best income-generating ideas across global fixed income sectors. 

AB American Income Portfolio

The AB American Income Portfolio is a fund that invests in US dollar-denominated Fixed Income securities. The fund dynamically balances credit and duration through investments in high yield and emerging market sectors to enhance income and dampen interest-rate risk, and in high-quality government bonds to alleviate credit risk when markets are stressed. The fund also limits its exposure to below investment-grade rated bonds to 50% and avoids CCC-rated issuers. 

Equity Funds

AB Low Volatility Equity Portfolio Fund

The AB Low Volatility Equity Portfolio fund is a global equity fund seeking capital growth through securities of companies that the fund manager believes have lower volatility. Its investment approach focuses on Quality, Stability and Price, where the fund seeks high quality stocks of companies with stable performance and predictable earnings, trading at attractive prices. The fund also has distribution share classes for investors looking for dividend income.


The divergence in US inflation versus the rest of the world, including Europe, Switzerland, Canada and China has also resulted in a deepening of Federal Reserve policy divergence versus other central banks, including the European Central Bank (ECB), Swiss National Bank (SNB), Bank of Canada (BOC) and the Chinese central bank (PBOC). This is also adding to US Dollar (USD) strength. Given the USD’s yield advantage and the US exceptionalism narrative, the USD may continue to stay supported until US data starts to show more signs of softening or when the Fed’s hawkish rhetoric softens. For the year, we still expect the USD to trend slightly lower towards year-end once the Fed is done tightening and embarks on a rate-cut cycle in time.

Important Information

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  1. Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).
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Global Equities Disclaimer

  1. Dividend growth is not guaranteed, nor are companies in which you invest obliged to pay dividends;
  2. Companies may go bankrupt rendering the original investment valueless;
  3. Equity markets may decline in value;
  4. Corporate earnings and financial markets may be volatile;
  5. If there is no recognised market for equities, then these may be difficult to sell and accurate information about their value may be hard to obtain;
  6. Smaller company investments may be difficult to sell if there is little liquidity in the market for such equities and there may be substantial differences between the buying price and the selling price;
  7. Equities on overseas markets may involve different risks to equities issued in Singapore;
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Foreign Currency

  1. Foreign currency investments or deposits are subject to inherent exchange rate fluctuation that may provide opportunities and risks. Consequently, exchange rate fluctuations may affect the value of your foreign currency investments or deposits.
  2. Earning on foreign currency investments or deposits may change depending on the exchange rates prevalent at the time of their maturity if you choose to convert.
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Dual Currency Returns

  1. By buying Dual Currency Returns, you are giving us the right to repay you at a future date in a different currency from the currency in which you made your original investment, even if you would prefer not to be paid in this currency at that time. Dual Currency Returns are affected by foreign exchange rates, which may affect how much you get back from your investment. You may receive less than you originally invested.
  2. Foreign exchange control restrictions may apply to the foreign currencies linked to your Dual Currency Returns. As a result, we may repay your investment and interest in a different currency. You may receive less than you originally invested when the amount of this different currency is converted back to the base currency (the currency you originally invested). You may be able to get information on foreign exchange control restrictions, if any, for each foreign currency offered in relation to Dual Currency Returns, from the relevant monetary, regulatory or other governmental authorities for that currency.
  3. We will not end Dual Currency Returns before the maturity date (the date they are due to end). You may, however, withdraw the amount you originally invested before the maturity date. If you do this, please remember that you will have to pay any charges that apply which are calculated based on the amount of the time remaining before maturity date, as well as current market conditions relating to strike prices, foreign exchange rates and changes in the underlying foreign exchange pair. These charges may mean that you get back much less than you originally invested. Please feel free to approach your relationship manager for details of the procedures and charges that apply if you withdraw your Dual Currency Returns investment before the maturity date.
  4. Dual Currency Returns are not insured deposits for the purposes of the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011.

Collective Investment Schemes

  1. A copy of the prospectus of each fund is available and may be obtained from the fund manager or any of its approved distributors. Potential investors should read the prospectus for details on the relevant fund before deciding whether to subscribe for, or purchase units in the fund.
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  3. Investment involves risks. Past performance figures do not reflect future performance.
  4. Any reference to a company, financial product or asset class is used for illustrative purposes and does not represent our recommendation in any way.
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  6. Any indicative distribution rate may not be achieved and is not an indication, forecast, or projection of the future performance of the Fund.

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Any opinions or views of third parties expressed in this document are those of the third parties identified, and do not represent views of Oversea-Chinese Banking Corporation Limited (“OCBC Bank”, “us”, “we” or “our”).