Navigating Singapore - 2022 Sector Allocation & Top Stock Picks
- The top 3 sectors we like based on earnings are Tech, Telco and Consumer.
- We classify Capital Goods and Property as value plays given that the average trading band is still below its long-term historical mean.
- REITS and Healthcare are the sectors with defensive and quality earnings.
- We upgrade Transport to OVERWEIGHT after the recent sell-down and we believe the risk-reward is compelling the sector, particularly with visibility to a likely recovery in travel demand in 2022.
- However we keep Gaming as NEUTRAL in the medium term as share prices could bounce fast and furious on the Omicron variant proving to be less dangerous than expected.
- We make some changes to our Singapore stock top picks.
- We remove SingPost (SGX:S08) (previously a recovery laggard) as the market is likely to first plough into direct recovery plays.
- We also replace Ascendas REIT (SGX:A17U) with Keppel DC REIT (SGX:AJBU) as the former could be susceptible to an intermittent start-stop reopening of global markets including Australia, UK/Europe and the US.
- We added SEA Ltd on the back of higher MSCI weightage and after its share price corrected by 28% since 3Q21 earnings.
- CGS-CIMB's Singapore Stock Alpha Picks for 2022 (large cap)
- CGS-CIMB's Singapore Stock Alpha Picks for 2022 (small cap)
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2021-12-03 2021-12-03
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