Large caps dominated stock index in April: UOB Kay Hian

The alpha picks portfolio improved in the stock index last month.

The alpha picks portfolio performed better in the Straits Times Index by 3.2 percentage point on a market cap-weighted basis in April 2023, said UOB Kay Hian.

The leading stocks in April were large caps, namely Keppel Corp (+12.8% mom), CapitaLand Ascott Trust (+8.5% mom) and newly-added Seatrium (+4.2% mom). 

“We make no changes to our Alpha Picks portfolio for May 23. Our Alpha Picks portfolio has now beaten the STI in 13 out of the past 14 months,” said the broker.

It added that the dust is getting settled on the Keppel Offshore Marine merger with Seatrium, which may have allow investors to be fully able to judge Seatrium and Keppel “on their respective merits.” 

Despite cooling inflation data and a slowing US labour market, overall market sentiment stayed subdued as an increased likelihood of an impending recession, along with another expected rate hike in May 2023 eroded investor confidence.

“A mixed start to the US corporate earnings season also left investors waiting on the side-lines, gauging the health of corporate earnings and the overall US economy. With growing macroeconomic uncertainty, the STI remained relatively flat in Apr 23, inching up slightly by 0.4% mom,” read the analysis.