SG Strategy: DBSV has a 3Q earnings update, where the house guides that with macro uncertainties and the shadow of a technical recession in 3Q, investors are likely to cast a wary eye on the upcoming results season. For 3Q results, the house will be keeping an eye on 1) provision and NPLs for banks; 2) margins for downstream consumer and plantation sectors and the rig builders; 3) forex impact on plantations and SREITs; and 4) contract rescheduling/cancellations for rig builders which could point to further downgrades for 2016.
The only bright spot could come from better earnings from airlines/shipping, as the house expect the positive impact of lower fuel costs to filter through.
Select stocks with earnings visibility or dividend upside - Thai Bev, , Riverstone, Sheng Siong, Sembcorp Industries, ST Engineering, Capitaland, Singapore Airlines, and Venture Corporation. With the potential rate hike likely to be out of the way till 2016, REITS offer a temporary shelter for investors seeking yields. Top picks are stocks with sustainable growth - Mapletree Greater China Trust and Frasers Centrepoint Trust
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