Compiled by Cai Haoxiang
SINGAPORE MARKET| NEUTRAL (DOWNGRADE)
DBS Group Research, June 16
While Singapore's growth outlook is sanguine with 2.8 per cent GDP (gross domestic product) growth this year and 2.5 per cent next year, there are signs that growth has moderated.
Recovery in both services and manufacturing sectors has been uneven. Our regional strategist downgraded Singapore to "neutral".
We maintain our view for the Straits Times Index (STI) at 3,274 points as a near-term cap.
The trend is turning sideways from 3,185 to 3,275 points. In the event the 3,185 level fails, weakness to 3,130 is seen before the correction ends. A year-end objective of 3,350 points remains possible.
Against this backdrop, we ran an exercise to access the STI component stocks, taking into account target return, recommendation and technical situation.
CapitaLand Mall Trust is the preferred pick.
The stock offers 12 per cent return, is moderately oversold, possibly under-owned and offers a 5.7 per cent yield.
Watch for possible interest uptick in Thai Beverage and ST Engineering.
These two stocks have at least 10 per cent potential upside, are technically neutral and look fairly owned. The conditions look ripe for a revival of interest in these stocks.
ComfortDelGro, Wilmar and Singapore Press Holdings are oversold rebound trades. While we have "hold" recommendations on all three, they are technically oversold and offer more than 5 per cent upside to our target prices.
UOB, OCBC, Ascendas Reit and Global Logistic Properties are overbought, offer little or no upside to target prices and look well-owned.
UOL looks susceptible to a near-term pullback as it is technically overbought. But beyond this, the stock offers more than 10 per cent upside to its target price.
We make an exception with HPH Trust in this exercise.
The stock is moderately overbought by definition, trading above our fundamental target price and has a "hold" recommendation.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.