What every investor needs to know about Singapore companies

Turns out fearful investors are also worried about being left behind in rallies.

According to CIMB, being purely defensive was not hot. Hiding in Telcos already worked in 2011, and the past year’s best performer rarely repeats. The buy side also believed that wild swings month to month could
be the norm.

Here's more from CIMB:

What Happened
We met more than 50 investors in Asia and the US. We advocated Overweight positions on defensive sectors still. Although bearish, we wanted to be invested in specific names that have quality at reasonable prices, such as CDL-HT, DBS, Genting HK, GLP, Olam, SCI, and Wilmar. We had the most pushback from buying telcos and pure defensives. Instead, investors were sieving for non-index consumer stocks and depressed office stocks; and asking if property curbs would channel excess liquidity to the stock market (SGX) or to gaming (GENS) as Singapore’s liquidity plays.

What We Think
We like banks relative to the other cyclicals. We are negative on Property and prefer REITs. Most agreed. We sensed growing interest in REITs in a prolonged low-interest- rate environment. There was agreement on DBS as our top banking pick, GLP among property picks and CDL-HT for REITs.

A negative view on Transport was easy to sell, though some asked if SIA’s yields are sustainable and if that makes it sufficiently defensive. On commodities, there was common unease on the opaque-ness of Olam’s earnings. For Capital Goods, investors were incrementally more positive, pointing to geopolitical tensions that could keep oil prices high.

What You Should Do
Our end-CY12 FSSTI target of 2,680 (1.3x P/BV) and Underweight position are unchanged.

DBS
DBS is our top pick as we believe it has successfully leveraged customer relationships to cross-sell as competitors retreat. Beating peers’ ROEs is an achievement when capital markets are sour and interest rates, low.

Global Logistics Property
Over 75% of its logistic facilities cater to domestic consumption in China. Policy risks are unlikely to be a major concern. We expect capital-recycling  initiatives to catalyse its share price in 2012.

Genting Hong Kong
Although the biggest outperformer among our stock picks, valuations are still attractive. Gaming trends in Resorts World Manila have been strong. The Costa Concordia mishap caps cruise industry capacity and benefits NCL & Star Cruise.