Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
February Market Overview
The Singapore market continued to hold ground last month with the STI advancing 0.7% as President Donald Trump surprisingly delayed a punitive hike in US tariffs on Chinese goods, claiming productive trade talks.
This was a clear sign that both countries wanted to close a deal, thus providing hope for a resolution to the 8-month trade war that has slowed global economic growth and disrupted markets.
Ytd, the STI rose 4.7% with total return (including dividends) of 4.8%. On an equal weighted basis, the average gain of the 30 constituent stocks was 7.7%. Notably, only five stocks suffered losses, while ten chalked up double digit returns.
Against this backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks also achieved a solid average total return of 10.2%, beating the benchmark index by 2.5ppt.
Growth List +13.0% YTD
The Growth portfolio was boosted by APAC Realty as it looks to deepen presence in Southeast Asia by leveraging on the strength of the ERA global franchise network and the flexibility of its master franchise model. This enabled the group to execute its expansion plan in a capital-efficient manner, which now boasts the largest ERA network globally with >17,800 agents across Asia.
During the month, we took profit on iFast as its valuation appears stretched amid market uncertainties and the failure to win a virtual banking licence in Hong Kong has removed a potential re-rating catalyst.
Value List +8.6% YTD
The Value portfolio remains supported by blue chip stocks particularly Yangzijiang and CapitaLand, which notched double digit returns ytd. Amidst recent merger of Korean shipbuilders, we see Yangzijiang as a potential beneficiary of industry consolidation and shipping recovery. Its move into the LNG carrier space through partnership with Japanese yard Mitsui could also pave their way into a new growth market.
Yield List +9.2% YTD
The Feb performance was driven by strong recovery in laggards such as UMS and Manulife US REIT, which have previously been heavily sold down.
During the month, we exited StarHub in view of the disappointing 4Q18 results amid increasingly competitive operating landscape, which led to deep cut to its FY19 dividend guidance, rendering its yield no longer compelling. We prefer Netlink NBN Trust for its monopoly position, lower gearing relative to telcos.
Note: * Including dividends
** Priced in USD
This document is not research material and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. This document does not necessarily represent the views of every function within Maybank Kim Eng Securities.
This document is being distributed for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only, it does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons.
Opinions, projections and estimates are solely those of Maybank Kim Eng Securities at the date of this document and subject to change without notice. Past performance is not indicative of future results and no representation or warranty is made regarding future performance. Any forecast contained herein as to likely future movements in rates or prices or likely future events or occurrences constitutes an opinion only and is not indicative of actual future movements in rates or prices or actual future events or occurrences (as the case may be).
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