Morgan Stanley initiates coverage on Singapore with a constructive view: “although we expect Singapore’s market to deliver returns similar to Emerging Market returns expected in 2011, considering its near developed market risk profile, we believe that its risk-reward appears quite favorable.”
It expects the MSCI Singapore index to deliver 12% and 20% local currency and total returns through 2011, respectively. The house’s base scenario for Singapore is predicated on constructive global growth: “in such an environment, sectors that benefit from Global/Singapore GDP growth and are least affected by currency appreciation should do well. Our preferred sectors to play this theme are Banks and Consumer Staples.”
Morgan Stanley lists key stock ideas as: Buy DBS (D05.SG) and it prefers OCBC (O39.SG) over UOB (U11.SG). It says Buy Olam (O32.SG) over Wilmar (F34.SG); buy Singtel (Z74.SG) and prefers M1 (B2F.SG) over Starhub (CC3.SG). Its preferred real estate stocks are Keppel Land (K17.SG) and CDL Hospitality (J85.SG) and preferred industrials are Keppel Corp (BN4.SG), SIA (C6L.SG) and NOL (N03.SG).
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