Maybank lists top Singapore stock picks for short, long Iran war

[SINGAPORE] As the US-Israel-Iran conflict creates a “fog of war” over global markets, Singapore’s investment landscape is being defined by a “certainty premium”, Maybank analysts said.

Singapore’s domestic resilience and safe-haven status are expected to provide support to Singapore valuations despite the geopolitical uncertainty, the bank’s strategy report on Mar 18 indicated.

“We see any (market) pullback as a fresh entry point,” Maybank analysts said.

The conflict has entered its fourth week following the initial escalation on Feb 28, when joint US and Israel operations against Iran began.

The impact on local equities hinges on whether the conflict is a brief disruption or a protracted engagement, with distinct beneficiaries and laggards emerging in each scenario.

The ‘short war’ scenario

A short-lived conflict, defined as a ceasefire within three to four weeks and the re-opening of the Strait of Hormuz, is expected to result in limited earnings impact for the first half of 2026, Maybank said.

In this environment, oil prices are projected to fall below US$100 a barrel (bbl).

Who may do well:

• Financials: DBS and OCBC are well-positioned to benefit from accelerated safe-haven flows, particularly from Middle Eastern wealth centers, supporting stable net interest margins. Maybank noted that OCBC and DBS were best placed, given gearing to domestic demand for the former and wealth management scale and pre-emptive provisions for the latter. A flight to safety trend may also provide iFast a boost in AUA and UK bank deposits, driving top-line growth as a result.
• Exchanges: Singapore Exchange is likely to experience higher volumes in derivatives as investors seek to manage risk. However, this may be tempered by more cautious trading in the equities market.
• Real Estate Investment Trusts (Reits): Defensive, domestic consumption-focused names like CapitaLand Integrated Commercial Trust , Frasers Centrepoint Trust , and Lendlease Global Commercial Reit are expected to outperform due to yield defensiveness.
• Tech manufacturing: Companies such as AEM , UMS , and Frencken remain supported by structural semiconductor demand and artificial intelligence (AI)-related capital expenditure.
• Industrials: ST Engineering stands to benefit from increased defense demand.
• Healthcare: Demand remains relatively inelastic for healthcare needs, resulting in no direct material impact.
• Telecommunications: Near-term impact is expected to be relatively limited given the defensive nature of the sector and strong revenue visibility.

Who may not do well:

• Consumer: The impact on Singapore consumers is likely to be modest and broadly neutral. Higher crude prices could lead to increased logistics and transportation costs, which may affect retailers like Sheng Siong , but will likely be partially offset by a relatively strong SGD. ThaiBev is highlighted as a potential underperformer due to its high sensitivity to tourism and discretionary spending.
• Aviation: SIA and SATS may face near-term margin compression driven by sudden spikes in fuel costs.
• Gaming: This sector faces a negative indirect impact as higher jet fuel costs reconsider travel plans for the foreign mass market.
• Internet: Sea and Grab may face margin pressure from elevated logistics and fuel costs despite operational resilience.
• Plantations: A faster resolution driving oil below US$100/bbl could introduce downside risks as Indonesia may not accelerate its B50 mandate.

The ‘long war’ scenario

A prolonged conflict exceeding one month, characterised by continued hostilities and the Strait of Hormuz remaining largely closed, would likely push oil prices above US$100/bbl, Maybank said. 

This path carries significant earnings downgrade risks for the full year 2026.

Who may do well:

• Plantations: First Resources and Bumitama Agri could experience an upside as elevated crude prices drive biofuel demand and lift crude palm oil prices.
• Industrials: Sembcorp Industries is expected to benefit from increased capital allocation toward diversifying energy sources and bolstering security. ST Engineering, while still benefitting from defence, may have to face order slowdown/cancellation in commercial aerospace business if air travel slows down. In addition, high inflation may erode margins.
• Property developers: Developers like CDL and UOL may outperform Reits due to their cheaper valuations and value-unlocking potential.
• Transport: Asian airlines such as SIA could benefit from increased traffic rerouting and may partially pass higher fuel costs to passengers through fares and fuel surcharges. Disruptions to maritime routes could shift some cargo from sea to air, supporting air freight volumes for Sats. ComfortDelGro is shielded by fuel indexation clauses in its public transport contracts, allowing for revenue adjustments based on fuel costs.
• Tech manufacturing: Offers relative resilience underpinned by structural demand for semiconductors and AI.

Who may not do well:

• Internet: Sea and Grab could become vulnerable to weaker consumption and rising logistics costs.
• Financials: Financials may face pressure from weaker loan growth, higher credit costs and softer fee income. UOB and SGX are most exposed, although equity market development programme could provide partial downside offset via direct liquidity.
• Gaming: High jet fuel prices, potentially reaching US$200/bbl, could significantly dampen foreign mass-market tourism to Singapore.
• Reits: Higher interest rates from increased inflation and lower gross domestic product growth are likely to create headwinds.
• Consumer: Wilmar could experience raised input costs across its consumer business, potentially pressuring margins. ThaiBev is also likely to face a more pronounced impact.
• Healthcare: Prolonged conflict may lead to higher utility costs and potential supply chain disruptions.
• Telecommunications: Enterprise spending on cloud and connectivity may moderate if a prolonged conflict leads to tighter corporate IT budgets.

Maybank’s top picks

For large-cap exposure, DBS remained a preferred pick with a target price of S$65.31, alongside Sea which has a target of S$127. SGX was also favoured, with a target price of S$20.37.

In the industrial and telecommunications space, ST Engineering and Singtel were favoured with target prices of S$12.50 and S$5.25, respectively.

In the Reit and small and mid-cap sectors, top recommendations included Frasers Centrepoint Trust with a target price of S$2.60, Lendlease Global Commercial Reit at S$0.74 and CDL Hospitality Trust with S$1. 

For specialised growth, ISOTeam and Coliwoo were top picks with target prices of S$0.12 and S$0.74, respectively. Addvalue Tech and CSE Global were also favoured with a target price of S$0.12 and S$1.52, respectively.