Some interestng key themes for 2008

From UBS.


1) A cautious market, but with potential for 15% upside from current depressed
levels. 2) We prefer Quality, Big Caps, Structural Growth and Reasonable Yield to
Small Caps and Liquidity-driven names, given heightened growth risk. 3) Faster
trend appreciation in the Singapore dollar presents earnings risks for Tech and
small Offshore stocks. 4) Domestic demand should outperform.


From Merill lynch

Bullish on Singapore and the STI
We are bullish on Singapore and have a bottom-up STI index target of 4,430,
implying 28% upside from current levels. Within it, we like the banking, property
and infrastructure related sectors due to their close structural ties to the economy.

Top picks are banks and property related
Our top picks are UOB, DBS Group, CapitaLand, SC Global and CDL Hospitality
Trusts. As Singapore continues to transform, we believe the valuation gap
between these companies relative to Hong Kong peers should narrow.
Meanwhile, we believe smaller companies such as Lian Beng and CWT Limited
are similarly poised to benefit from the island’s growth.

S-shares increasingly important
While not an integral part of the Singapore story, we think that the Chinese
companies listed on the Singapore Stock Exchange also offer compelling
prospects predicated on China’s growth story. Our favorites are Cosco
Corporation, China Hongxing Sports and Midas Holdings.


From UOB KH.

Singapore Strategy 2008: Still Weathering The Storm

After four years of solid returns, the Singapore bourse is grappling with the prospects of a slowdown in the US economy while concurrently dealing with the highest inflation rate since 1990. These two factors will negatively impact corporate profitability, resulting in an increasingly tough environment for local stocks in 2008. Balancing the negatives is a resilient domestic economy slated to grow by 4.5-6.5% in 2008, ample liquidity arising from negative real interest rates and a strong Singapore dollar.

Overall volatility will remain high and for the most part, we expect the Straits Times Index (STI) to trend sideways until the macroeconomic outlook improves. For FY08 and FY09, we forecast EPS growth of 8.0% and 15.5% respectively among stocks in our coverage universe.

In the worst-case scenario, we think the downside for the STI will be limited to 3,000 in 2008 as this represents a 7-year mean price/ book valuation on modest EPS growth assumptions. Should the STI correct to this level, we recommend investors to aggressively increase weightage. On the top side, we think the STI could head towards 4,100 level by end-08 if macroeconomic outlook improves. We recommend investors to maintain a balanced portfolio of growth, value and defensive stocks. Our top stock picks are as follows:

Growth: AusGroup, COSCO Corp, Hong Leong Asia, Hong Leong Finance, OCBC and Sino Techfibre,

Value: Keppel Corp, Keppel Land, Synear Food, The Hour Glass and Venture Corp.

Defensive: First Ship Lease Trust, Parkway Life Reit, Pacific Shipping Trust, Rickmers Maritime and Singapore Press Holdings.


From UOB KH.

Singapore Strategy 2008: Still Weathering The Storm

After four years of solid returns, the Singapore bourse is grappling with the prospects of a slowdown in the US economy while concurrently dealing with the highest inflation rate since 1990. These two factors will negatively impact corporate profitability, resulting in an increasingly tough environment for local stocks in 2008. Balancing the negatives is a resilient domestic economy slated to grow by 4.5-6.5% in 2008, ample liquidity arising from negative real interest rates and a strong Singapore dollar.

Overall volatility will remain high and for the most part, we expect the Straits Times Index (STI) to trend sideways until the macroeconomic outlook improves. For FY08 and FY09, we forecast EPS growth of 8.0% and 15.5% respectively among stocks in our coverage universe.

In the worst-case scenario, we think the downside for the STI will be limited to 3,000 in 2008 as this represents a 7-year mean price/ book valuation on modest EPS growth assumptions. Should the STI correct to this level, we recommend investors to aggressively increase weightage. On the top side, we think the STI could head towards 4,100 level by end-08 if macroeconomic outlook improves. We recommend investors to maintain a balanced portfolio of growth, value and defensive stocks. Our top stock picks are as follows:

Growth: AusGroup, COSCO Corp, Hong Leong Asia, Hong Leong Finance, OCBC and Sino Techfibre,

Value: Keppel Corp, Keppel Land, Synear Food, The Hour Glass and Venture Corp.

Defensive: First Ship Lease Trust, Parkway Life Reit, Pacific Shipping Trust, Rickmers Maritime and Singapore Press Holdings.