Current DBS Equity Picks

As of 21 May 2021

BLUE CHIP: Provides steady growth over a longer time period
DIVIDEND: Provides steady income stream
GROWTH: Provides capital growth over 12 month  

   StockEntry DateEntry Price
Number of Shares
   SingTel21 May 20212.426,500
   APAC Realty14 May 20210.4928,000
   Cromwell European REIT03 May 2021EUR 0.47520,000
   Keppel Corporation23 Apr 20215.332,800
   CDL Hospitality Trust22 Apr 20211.2411,800
   Dairy Farm 19 Mar 2021US$4.372,200
   Prime US REIT (US$)18 Feb 20210.8113,800
   Mapletree NAC Tr12 Mar 20210.986,200
   Mapletree NAC Tr15 Dec 20200.9513,800
   China Aviation Oil21 Jan 20211.1312,800
   ComfortDelGro13 Nov 20201.503,000
   ComfortDelGro12 Jun 20201.573,200
   ComfortDelGro2 Jun 20201.436,800

Add SingTel 6,500 shares @ $2.42 to Blue Chips category – 21 May 2021

While SingTel is expected to report a net exceptional loss in the upcoming 2HFY21F results, we think the move will attract strategic investors or partial divestment of both the US based businesses Amobee and Trustwave. It’s divestment plan for Australia Tower and the potential turnaround to profit for its Australian operations (c.50% of revenue) from higher ARPU 5G-bundled plan could be another key event to watch out for.  Stock currently trades at 4.5% FY21F yield. Stock’s seasonal trend shows limited downside (technical support $2.40 should hold, worst case $2.35) from here and a tendency to base build before recovery from mid-June till end-July, coinciding with its FY dividend payout.

Resurgence of COVID fears

The Straits Times Index (STI) has declined 3.3% since our last update in April, weighed down by the rise in COVID-19 community cases and the new restrictions implemented. For the year, the STI was up 8.3% YTD.

Over the course of the past month, we added CDL Hospitality Trust (-2.4%) as the top revenue markets of the REIT, such as New Zealand and the UK, saw improvements in their COVID-19 situation. Keppel Corporation (-2.1%) was also added in recognition of its status as a mid-cycle recovery laggard. Keppel Corp was also set to enjoy positive business updates including the clinching of a major order from Brazil.

We bought Cromwell European REIT (1.1%) as it was trading at an attractive yield of over 7.5% and could potentially be included in the EPRA NAREIT Index. APAC Realty (+7.1%) was another addition as we believe that the stock has yet to price in its much stronger-than-expected 1Q21 earnings from a hot property market.

We locked in gains for Yangzijiang Shipbuilding (+45.8%) given its strong share price performance. Similarly, gains were locked in for Far East Hospitality Trust (+12.3%) given that the stock was trading just below its February levels of S$0.65 – S$0.69.

SATS Ltd (-6.3%) was initially added on the back of Singapore’s continued opening of air space and solid vaccination progress. We have since reversed course and we think that the reopening of Singapore’s air lanes will proceed cautiously even after the current COVID-19 outbreak is under control.

Since inception, the DBS equity picks’ time-weighted rate of return (TWRR) has gained +92.94%, outperforming the STI’s 4.56%. Over the past year, our equity picks returned 43.05% compared to the STI’s 22.04% gain.

We will continue to look for opportunities for additions and deletions.