Skip to content
Alpha Edge Investing

Alpha Edge Investing

"Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand better than others, they have an edge.” – George Soros

  • Home
  • Earnings Updates/ Corporate Actions
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trust/ ETF
  • News
  • My Opinions/ Views
  • Others
  • About Me
  • Contact
  • Disclaimer
  • Community and Support Forums
  • Toggle search form

UOBKH: STRATEGY – SINGAPORE

Posted on October 5, 2022October 5, 2022 By alanyeo No Comments on UOBKH: STRATEGY – SINGAPORE
Alpha Picks: Add ThaiBev And ComfortDelGro; Remove BRC Asia And Frencken

Our Alpha Picks outperformed the STI index in Sep 22, declining by 0.4% on a market cap-weighted basis vs the STI’s 2.8% decline. For Oct 22, we add ComfortDelGro and Thaibev after their recent share price weakness as we expect the economic reopening to continue to drive their demand recovery. We cut losses on BRC Asia, whose business is affected by the temporary stop-work orders, and remove Frencken as we expect weak sentiment towards tech stocks amid the rising interest environment.

WHAT’S NEW

• Market review. Except for the banking sector which is a clear beneficiary of higher interest rates and some event-driven stocks, the general market was weak in September (-2.8% mom). The stubborn US inflation data (8.3% in August, higher than economists’ median forecast of 8.1%) released in the middle of the month was believed to have reinforced the US Fed’s hawkish stance to manage inflation through further rate hikes. Against this backdrop, one-year US treasury yield ended at 4.05% on 30 September (+55 bp mom) while yield for one-year Singapore government treasury bills reached a decadehigh level of 3.24% (+35 bps mom). These attractive short-term yields and expectations for further interest rate increase have led to fund outflow from stock markets, as investors hold cash or short-term deposits for potentially better stock market entry prices later.

• Outperformed in Sep 22 and 3Q22. Our Alpha Picks portfolio outperformed the STI in Sep 22 with a 0.4% mom drop on a market cap weighted basis vs the STI’s 2.8% mom decline. Importantly, our portfolio materially outperformed in 3Q22 by 4.7ppt. For Sep 22, the outperformance was primarily driven by a few large-cap names, including Yangzijiang Shipbuilding (+6.2% mom), DBS (+2.4%), and Genting Singapore (+1.3%) while the tech sector did poorly with Frencken (-15.2%) and Nanofilm (-11.4%) being the key losers.

• Add Thaibev and ComfortDelGro; remove BRC and Frencken. For October, we add ComfortDelGro and ThaiBev into the portfolio as: a) both are set to benefit from demand recovery from the economic reopening and removal of COVID-19 measures, and b) the recent share price weaknesses have made their valuation more compelling. We cut losses on BRC Asia as temporary stop-work orders caused by its recent workplace incidents are expected to affect its construction activities and delivery volumes, and we also remove Frencken as the rising interest environment has negatively affected sentiment for tech stocks.

SG-StrategyClick here to Download Full Report in PDF

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Telegram (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
Research - Equities Tags:Ascott Residence Trust, BRC Asia Ltd, Capitaland Investment, ComfortDelGro, DBS Group Holdings, Frencken Group, Genting SP, lendlease REIT, Nanofilm Technologies, Sembcorp Industries, SIA Engineering, Singapore Strategy, thaibev, Yangzijiang Shipbuilding

Post navigation

Previous Post: PhillipCapital: Phillip 4Q22 Singapore Strategy Hibernating for winter
Next Post: CIMB: Malaysia Semiconductor (Neutral)

Related Posts

DBS: ComfortDelGro Corporation Ltd – Buy Target Price $1.95 Research - Equities
Maybank: ComfortDelGro – Buy Target Price $1.60 (Previous $1.75) Research - Equities
UOBKH: CapitaLand Investment – Buy Target Price $4.13 Research - Equities
UOBKH: Banking – Singapore (Overweight) Research - Equities
CIMB: Capitaland Investment – Add Target Price $4.50 (Previous $4.59) Research - Equities
DBS: ComfortDelGro Corporation Ltd – Buy Target Price $1.95 Research - Equities
DBS: Singapore Retail Real Estate Research - Equities
DBS: ASEAN Tech Research - Equities
DBS: Capitaland Investment Ltd – Buy Target price $4.30 Research - Equities
UOBKH: Gaming Singapore (Overweight) Research - Equities
CIMB: Singapore Property Devt & Invt (Overweight) Research - Equities
CIMB: Singapore Banks (Overweight) Research - Equities

Leave a Reply

You must be logged in to post a comment.

Login

Log In
Register Lost Password
Get new posts by email
Chat on WhatsApp
  • Earnings Updates/ Corporate Actions
  • My Opinions/ Views
  • News
  • Others
  • Research – Equities
  • Research – Fixed Income/ Bonds
  • Research – Unit Trusts/ ETF

Copyright © 2023 Alpha Edge Investing.

Powered by PressBook Grid Blogs theme