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MAYBANK-Kim Eng kept its "neutral" rating on the Singapore market, with a Straits Times Index (STI) target of 3,440 points.
"There were more earnings misses from banks, property and oil & gas in Q4 2014," the brokerage said in a report this week.
"While this was compensated by four positive earnings surprises, the earnings were of poor quality and may not be sustainable."
It noted that earnings for SATS, SMRT and SIA Engineering were propped up by strong cost control. Revenue and order-book prospects appear challenging.
Meanwhile, while Cosco's and Sembcorp Marine's earnings were lifted by better operating margins, there are execution risks ahead this year.
At 3,440 points, the market would be trading at about 14 times the earnings expected for this year, making it "unattractively priced", the report said.
The brokerage was most upbeat on banks, despite the sector missing estimates in the fourth quarter. "We expect banks to book stronger profitability this year, aided by net interest margin expansion as SGD Sibor (Singapore Interbank Offered Rate) treks higher."
As at 10.55am, the STI reversed from losses in early morning trade with a gain of 5.51 points to 3,427.62. All three banks were among the top gainers.