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.
