by winston » Fri Dec 18, 2020 9:40 am
SINGAPORE STRATEGY – RECOVERY WILL FAVOUR SG STOCKS
Recovery is likely to be uneven
Near term volatility, but LT outlook is constructive
Add SG stocks to broaden equity portfolio
Our quarter-by-quarter market strategy reports in 2020 were able to effectively match and capture market actions, but we believe that the global economic recovery is going to be largely uneven across different markets.
With the resurgence of cases in Europe, US and Japan, there is also the heightened risk that the recovery may be delayed despite optimism over the impending deployment of vaccines.
Companies which were able to play into the digitalisation of economies will continue to benefit and look set to continue to grow.
Favourable vaccine news has lifted optimism in the market and together with a low interest rate environment, equities are likely to remain in focus.
The recovery theme is likely to favour the cyclical-heavy Singapore market, which could result in a re-rating.
Singapore will enter Phase 3 on 28 Dec 2020, and this is positive and points to a gradual return to normalcy. As we are expecting the operating environment to become more challenging with tighter scrutiny and regulations, especially for high-growth sectors, Singapore stocks are good additions to provide for a more diversified and broader equity portfolio.
Our preferred picks in Singapore are Ascendas REIT, Ascott Residence Trust, CapitaLand Integrated Commercial Trust, CapitaLand Ltd, Frasers Centrepoint Trust, Frasers Logistics & Commercial, Keppel DC REIT, Manulife US REIT (USD), Mapletree Industrial Trust, Mapletree North Asia Commercial Trust, NetLink NBN Trust, Sheng Siong Group, Singapore Telecommunications, Thai Beverage, Venture Corp and Wilmar International.
Source: OCBC
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