Strategy: Citi reiterates strategy for 2011. Tip yr end FSSTI Target of 3450. Note that although SG may underperform bullish regional view, see 20-30% upside in selected names. Ample global liquidity suggests continued SGD strength, low interest rates and buoyant commodity prices….
Note that Banks have lagged, yet are at record earnings, NIMs look close to bottom and business lending is recovering. In a low rate environment property office values could rise and mass market residential and REITs remain attractive…
Highlight that O&M is seeing a new rig replacement cycle underpinned by a strong demand outlook and firm oil prices. At 1.78x P/B, FSSTI is +0.5SD above mean, and well below bubble 2.3-2.4x levels of past cycle peaks. Top picks are DBS, Keppel Corp, Yangzijang, Genting, ComfortDelGro, M1, AREIT & Allgreen
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