Singapore shares rose for the third consecutive session and were headed for their biggest daily rise in more than a week, tracking a rebound in global equity markets on easing worries about an imminent end to the Federal Reserve’s bond buying.
The benchmark Straits Times Index rose 1.4% to 3,147.28 points. MSCI’s broadest index of Asia-Pacific shares outside Japan gained nearly 2%, pulling away from an 11-month low hit earlier this week.
A further drop below 3,000 points would make Singapore stocks a good buy, said CIMB in a research note. It upgraded the Singapore market to “neutral” from “underweight” as valuations have come off with worries about the end of cheap money.
“In a slower-growth world with less impetus for multiple expansion, we look for stocks with earnings growth drivers,” CIMB analyst Kenneth Ng said.
He gave preference to banks over REITs (real estate investment trusts), and favoured developers rather than commodity plays.
DBS Group Holdings is CIMB’s top banking pick for its trade finance success and earnings delivery from multiple fee income streams.
CIMB also favours Thai Beverage PCL as it has the best exposure to ASEAN consumers. Other stock picks include UOL Group limited, CapitaLand, Global Logistic Properties and Keppel Corporation.
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