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Wednesday, February 20, 2013

Singapore large-caps may begin to outperform small-caps: Credit Suisse


The Singapore market's 2013 rally has improved headline P/E to 14.2x from 12.7x in January 2012, above its 13.2x five-year average, Credit Suisse says, noting small-to-mid cap stocks have done well recently.
"Implied cash flow return on investment expectations are now above consensus forecasts for mid/small cap stocks, while for the larger cap stocks, these are below consensus estimates. Without large EPS upgrades, the large cap stocks should begin to outperform (on a risk-off, though difficult to time the turn)."

It likes SingTel (Z74.SG), Jardine Matheson (J36.SG)/Jardine Strategic (J37.SG), Keppel (BN4.SG) and CapitaLand (C31.SG), noting it is underweight the banks.

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