SG Stocks Investing Strategy: UOB Kay Hian

This post is on SG stocks investing strategy recommended by UOB Kay Hian which might provide some investment ideas for those of you reading the post

For 2013's remainder, UOB KayHian tips being selective on blue-chips and seeking alpha in undervalued mid-caps. With the top-15 STI stocks at an only 3.3% average discount to long-term P/B means, stocks with capitalisations below $1.5 billion may offer deeper value, it says, with its top-five segment picks Silverlake (5CP.SG), Kreuz(5RK.SG), Triyards (RC5.SG), Ying Li (5DM.SG) and Sino Grandness (JS5.SG).

Its large-cap buy list includes DBS (D05.SG), M1 (B2F.SG), Keppel (BN4.SG), OUE(LJ3.SG) and SIA Engineering (S59.SG). Singapore's overall market valuation is inexpensive at 15.1x 2013 P/E, a 7.5% discount to long-term means, it says; "The next one to two quarters could see a mixed performance given uninspiring macro data points such as a weak 1Q13 GDP and uncertainties in the eurozone. Nevertheless, we see the recovery picking up momentum in 2H13 and for the market to head towards our 3500 year-end (STI) target."

 It tips several potential themes for outperformance, including rotation within S-REITs to office and hospitality segments, strong cash generators such as SIA Engineering,Super Group (S10.SG) and Silverlake, deep-value stocks with potential catalysts, such as Ying Li and Guocoleisure (B16.SG), and mid-cap consumer and oil-services companies.