Watch out for these investing themes in 2016

Stick with blue chips as earnings fall.

After a particularly disappointing 2015, investors need to focus on sectors that provide reasonable growth in despite increased market volatility, according to a report by UOB Kay Hian.

UOB Kay Hian is hopeful that market earnings per share will recover 8% year-on-year in 2016, with growth drivers expected to be banks, plantation and telecommunications.

To make the most of this recovery, UOB Kay Hian is betting on companies with capacity growth in the face of resilient and steady demand. These include healthcare plays like Raffles Medical (RMG|) and Singapore O&G (SOG), as well as utilities company Sembcorp Industries (SCI).

UOB Kay Hian also favors companies that benefit from changing market trends, such as Singapore Post. SingPost is expected to benefit well from the rising e-commerce trend, as rhe group has invested strategically to improve its e-commerce network.

UOB Kay Hian also remains drawn to blue chips, particularly on back of a mixed outlook for global economies and a slower growth environment for Singapore.

“Solid stocks with strong balance sheets and decent growth trading at undemanding valuations should find favour. For this theme, we would focus on blue chips that are typically more liquid,” UOB Kay Hian said.