Spore Strategy

Nomura has strategy report. Remain positive on sectors that benefit from reflation and higher commodity prices, including banks, commodities, offshore marine and commercial property…

Note that SG Banks has good value but lacks catalyst, with interest rates remaining depressed, sector could continue to languish. Cite that UOB had underperformed significantly and seemed attractively priced….

Warming up to upturn in offshore marine, rig upgrade/build has been reviving, underpinned by regulatory change and an improving oil price outlook. However noted concerns about margins for Petrobras contracts which may not be attractive for Keppel and Semb Marine…

Highlight that Office cycle peaking with concerns about the high-end market, given the dearth of transactions, while contrarian views looked at the potential of rerating once policy
overhang dissipates…

For Upstream commodity plays, warn that investors may be wary about getting caught if the CPO price pulled back sharply. Generally agree with the positive view on Noble, but some scepticism about Olam’s recent M&A announcements. Note that Wilmar’s share price is finding support but with few catalysts in the near term.


CS has strategy report. Note that more positive global outlook augurs well for higher-beta names. Raises 2011 real GDP growth forecast to 4.7% from 4.2%, to reflect a more positive global growth outlook in 2011…

However Underweight on SG (mainly due to valuations), prefers export-oriented markets that will benefit from the recovery in global IP over domestic defensives. Note that Sectors that would benefit from the recovery in global IP includes capital goods, transport and commodity names….

Overweight capital goods, property and transport, and Underweight telecom and consumer discretionary. Market weight banks, consumer staples and financials. Top picks are SMM, NOL, CDL, Keppel and Olam.