Strategy: UOB looks at 2H15, and would top-slice expensive stocks or those with deteriorating oulook, while warning investors to brace for more volatility and rising interest rates ahead.
The house advocates instead to look at undemanding blue chips. While inexpensive and quality mid caps with catalyst could add to returns, the house is selective.
The house is also expecting better sentiment in 2H from SG50 relative to the muted 1H15. Themes to look at a) regional growth beneficiaries, b) regulatory changes c) sold-downstocks with yields, and d) compelling business models.
Large Cap Buys are CapitaLand, DBS, SCI, SATS, SingTel, CCT and First Res. Mid cap Buys are Ezion, Wing Tai, Riverstone and Sabana REIT. Key sells are StarHub, SIAEC, IHH and Nam Cheong.
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