Strategy: Despite 9% decline in MSCI Singapore, corporate share buybacks in Jan was muted at $80m, a decline from $120m in Dec and $630m peak in Aug ’15. CS thinks this is due to reporting blackouts.
Companies active with share buybacks in January were DBS, OCBC, STE, SATS, SPH, SIA Engineering and SMM. The performance of these stocks was mixed, with DBS underperforming STI by 7% and SATS outperforming by 10%.
Total short selling surged from S$3.2 bn in December 2015 to $5.6 bn in January 2016, representing 25% of total turnover, the highest level since data was available. Stocks with the highest short sell as a percentage of volume include Suntec REIT, SPH, Wilmar, SCI, GGR and OCBC.
While MSCI Singapore P/B of 1.05x is below its 2009 low, CS maintains its cautious stance as we see scope for more earnings downgrades into the reporting season. Our picks are Citydev, Singtel, DBS, SIA, Wilmar, Genting, CMT, SCI, SATS and Raffles Medical.
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