Broker's take: RHB upgrades Singapore market to 'overweight', targets STI 3,200 points

BROKER RHB has upgraded the Singapore stock market to "overweight" from "neutral", saying it expects the market to rebound modestly in the second half of 2016.

"Our bottom-up Straits Times Index target of 3,200 points represents an implied 13.3 times 2016 forecast earnings," said RHB head of Singapore research Ong Kian Lin and his team.

RHB said it recommends that investors stay selective, with banks, transport, technology, plantations and utilities as preferred sectors. Residential property market prices could fall by 6-8 per cent, it said.

"For 2016, our stock picks comprise well-positioned quality stocks with good track records. The list includes ComfortDelGro, Dairy Farm, DBS, First Resources, Frasers Centrepoint Trust, Ho Bee, SilverLake Axis and Wing Tai," said RHB.

"In the more adventurous small and mid-cap space, we like China Everbright Water Ltd, Ezion, Global Invacom, IPS Securex, Oxley Holdings, SIIC and Singapore Shipping.

"Top 'sells' are CDLHT, Keppel REIT, Overseas Education, SembCorp Marine and Super Group."