CLSA is turning positive in 2017, setting at STI target of 3,071 (+11% upside)!
3 Key Ideas
- Singapore to benefit from global trade recovery. GDP growth to bounce back to 2.5% in 2017 after three years of decline, before strengthening further to 3.5% in 2018.
- Core earnings growth to turn positive in 2017, driven by recovery in Consumer, Conglomerate and Material sectors.
- US Fed rate hike negative for S-REITs, but sector seems to have already priced in the rate-hike risks. Prefer industrial REITs due to improving fundamentals.
- Conviction BUYs: Thai Beverage, Jardine C&C, City Developments, Fraser Centrepoint Ltd
- Other notable BUYs: Wilmar, First Resources, Keppel DC REIT, Mapletree Industrial Trust, Yoma Strategic
- Conviction SELLs: StarHub, Suntec REIT, Keppel Corp, Sembcorp Marine