Tuesday, December 10, 2013

Navigating Singapore- Beyond the taper (CIMB)

SINGAPORE Beyond the taper
After five years of a rally built on QE, one has to be edgy on how an end to QE will change the game. Sure, Singapore does not have a gearing issue but corporate earnings have sputtered as domestic businesses grapple with rising costs and overseas growth slows.

In 2H13, the FSSTI failed to reclaim its May high as rate-sensitive sectors stumbled. A market selloff in 2014 is possible, but it is unconstructive to worry about and position for. The only way to outperform is to select companies bottom-up, looking for those with the right business models and products. Our end-2014 FSSTI target is 3,600, based 14.4x CY15 P/E. Our top picks include DBS, FR, GLP, KEP and WIL.

Top five big-cap buys
We prefer stocks with some catalysts, at reasonable valuations. Our top five big-cap picks are DBS, FR, GLP, KEP and WIL. As long as the threat of rising interest rates hangs in the air, property and REITs will have little reason to do well. GLP is preferred because it can accelerate its RNAV growth with its China logistics fund.
DBS is the best proxy for rising interest rates, in our view. Keppel has fewer catalysts in 2014, but margin catalysts should come back in 2015. We like the plantations sector on Indonesia’s intention to use crude palm oil in its biodiesel mix.

Domestic woes overhyped
Population growth in Singapore is slowing as the country weans itself off foreign labour. Housing vacancy will rise and rents, soften − bad for developers. Still, implications from the labour restructuring have been overblown. Some smaller companies may have closed but the larger ones are coping. Banks’ asset quality remains pristine. Singapore companies have been expanding out of their small market for years, so their share-price driver should now be execution in overseas markets.

Top five small-cap picks
Our top five smaller-cap conviction picks are Del Monte, Ezion, Goodpack, Midas and Sarin Tech. DELM should be able to digest its major acquisition. The next half of EZI’s new fleet should contribute in 2014. GPACK has a new auto catalyst. MIDAS should benefit from a revival of train orders in China. SARIN has high earnings-growth potential from its new products.

Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 02/12/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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