KUALA LUMPUR: Singapore remains the least preferred
market in Asean for Morgan Stanley Research as it continues to underweight
banks and maintain a defensive dividend yield strategy.
In its Asean Equity Strategy
report issued on Monday, it said that despite the 473 basis points
underperformance since the Spanish bank bailout on July 20, 2012, its
scenario-weighted target index implied flat performance through December 2012.
“Our observations on key
valuation and earnings indicators versus both Asean and Developed Markets
reinforce our view that Singapore is a relatively unattractive market,” it
said.
Morgan Stanley Research said
Singapore's free-cash flow (FCF) yield trailed Asean and developed markets
peers and its own historical average while Singapore's return on equity (RoE)
was lower than Asean and developed markets peers and had been declining.
Singapore's price-to-earnings
ratio (PER) versus MSCI World (developed markets) was close to one standard
deviation above its long-term average, it said.
The research house also said
Singapore's consensus earnings growth forecast was 300 basis points lower than
developed markets while Singapore has witnessed broad-based downward revisions
to earnings forecasts.
As for Singapore's 2013 estimated
dividend yield, it said it exceeded Asean and developed market peers'.
However, due to the wide
dispersion of dividend yields across sectors, it advised investors to be
selective in picking dividend yield stocks.
“We recommend Ascendas REIT,
Singapore Telecom, Keppel Corp and CDL Hospitality Trusts as defensive dividend
yield plays in our focus list,” it said.
Morgan Stanley Research said it
had an underweight on banks. It explained the sector continued to be its least
preferred, given relatively unattractive valuations and earnings momentum.
Its bank analyst had recently
downgraded his view on Singapore banks from in-line to cautious, citing slowing
loan growth and falling net interest margins.
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. Since we are currently changing the platform of www.yourvietnamexpert.com, you may contact us at: sbc.pte@gmail.com, provisionally. Many thanks.
No comments:
Post a Comment