Brokers' take

Singapore market KGI Fraser, Jan 4

2015 had not been a good year for most investors, with the Straits Times Index (STI) shedding 14.3 per cent. While the year started firm with the European quantitative easing, we saw risk sentiments deteriorate in the second half after the devaluation of the Chinese yuan, decline in commodity prices and the anticipation of the US Federal Reserve rate hike. The hardest hit was undoubtedly the oil & gas sector, where we saw declines of 46.7 per cent for Ezion, 46.8 per cent for Sembcorp Marine and 26.5 per cent for Keppel Corp. In 2016, we still do not see much positive catalysts in the oil and gas sector with oil price remaining near multi-year lows. However, we note that the oil & gas stock prices have already come down significantly and are beginning to converge with our target price, in line with our bearish view. We are also expecting more Fed fund rate hikes after the first. This should bode w…