by winston » Mon Aug 01, 2016 4:46 pm
Monthly Strategy
Take profit on banks.
Bank stocks are likely to be a key drag on the STI given their downbeat outlook and risk of NPL increase, especially from exposure to the O&G sector.
Our analyst has cut earnings estimates for OCBC’s FY16-18F by 6-10% while lowering that for UOB by 7-11%.
STI component stocks under our coverage with a HOLD or FULLY VALUED rating that trade either close to or above our fundamental TPs could also be vulnerable to profit taking. These are SembCorp Marine, SPH, Keppel Corp, Genting Singapore, SGX and SIA Engineering.
Be picky about S-REITs. With the S-REIT index up c.7% YTD and the probability of a FED rate hike this year now higher at 42%, it is time to be more cautious and pick stocks with
(i) sustained growth in distributions, and
(ii) ability for accretive acquisition.
Our picks are Mapletree Logistics Trust, Mapletree Industrial Trust and CDL Hospitality Trust.
We are cautious on S-REITs with a HOLD rating and less than 10% total return. These are Far East HT, Suntec REIT, SPH REIT, OUE Comm REIT and CapitaLand Mall Trust.
Stick to yields.
We maintain our preference for yield picks in the current low interest rate and uncertain growth outlook environment.
Our picks are M1, ARA Asset Management, Sheng Siong and ST Engineering.
Source: DBS
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
