UBS tips Singapore's high-yield, high-beta plays

UBS expects Singapore's equity market to be rangebound in 2013. Singapore's economic restructuring and policy shift could result in higher labor costs and headwinds for companies, while the city-state's exports may not fully benefit from the mild external improvement as its electronics sector underperforms, the house says.

But it adds, "Low domestic interest rates, still-undemanding valuations, and attractive dividend yields could continue to limit the market's downside risks." It advises a balanced portfolio of high-dividend stocks, such as REITs and media companies, and high-beta stocks trading at low valuations, such as offshore & marine and commodity-related stocks. UBS expects Singapore's residential property market faces "a year of tests" and keeps a cautious view; it advises avoiding Singapore property developer stocks.

Its key stock picks are CDL Hospitality Trust (J85.SG), CapitaMall Trust (C38U.SG), Far East Hospitality Trust (Q5T.SG), SPH (T39.SG) and SingTel (Z74.SG).