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The Straits Times Index (STI) declined 1.9% from our previous update, weighed down by concerns of potential restrictions as COVID-19 cases rise in Singapore. 

The pace of equity picks’ transactions slowed down over the past month as we adopt a much more selective approach  amid the current choppy sideways market environment. 

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In the past month, we added AEM Holdings (+4.7%), as we believe the stock will benefit from a pipeline of catalysts. Namely, we see a ramp-up of its next -generation tools to its key customer from 3Q21 and potential new customers as potential drivers. Valuation of the stock was also undemanding, trading at an 11x FY22F PE.

We raise our exposure on City Developments (+5.8% for latest inclusion) after the Ggroup closed its Sincere Property chapter with its US$1 sale. We believed the stock is a bargain given its cheap valuations of 0.7x P/NAV and 0.5x RNAV and key catalysts such as potential asset recycling and portfolio optimizsation initiatives.

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We removed Yangzijiang Shipbuilding (+20.4%), as we saw profit taking signs. The stock had run up 15% over 3 sessions and we thought upside could be capped at S$1.68-1.71.

Since inception, the DBS equity picks’ time-weighted rate of return (TWRR) now stands at +101.61%, beating the STI’s 4.58%. Our equity picks returned 34.33% over the past year compared to STI’s 24.08%.