Singapore market fully priced, 3,440-pt STI target for 2015: Maybank Kim Eng

THE Singapore market appears fully priced at 13.5 times forward earnings, close to one standard deviation above its seven-year average, said brokerage Maybank Kim Eng Research in a recent report.

Meanwhile, earnings are estimated to grow 9 per cent in 2015 and 2016.

"In the region, Singapore has weaker ROE (returns on equity) and EPS (earnings per share)-growth prospects. Without major fresh leads, we foresee market weakness," said the report.

The brokerage is "neutral" on the Singapore market with a 3,440-point Straits Times Index (STI) target in 2015, about 4 per cent higher from current levels.

"In such a market, we recommend stock selection. Our end-2014 STI target is still 3,170, on 14 times 2014 estimated EPS."

It also removed oil and gas sector plays Nam Cheong and PACC Offshore Services Holdings from its "buy" lists.

"Sentiment on oil services has worsened, on fears that sharply lower oil prices could precipitate capex cuts by oil majors. This comes on top of a rig glut, which could push the sector's recovery to 2016," it said.

The STI closed at 3,315.60 points on Thursday, down 18.96 points or 0.57 per cent.