Brokers' take
Singapore stocks UOB Kay Hian, Jan 12
We seek shelter in selective dividend plays in view of volatility. Our focus is on stocks declaring final dividends soon or with potential special dividends as well as selected Reits (real estate investment trusts). Our key dividend picks include Venture, M1 and Ascott Residence Trust (ART).
Within our coverage, we note selected stocks which are expected to release Q4 2015 results with lumpy final dividends. Under this category of stocks, we look for companies with sustainable dividends and dividend yield of at least 3 per cent. Stocks we like in this basket include Venture, M1, ART and ST Engineering. Within these stocks, our preferred pick is Venture as we observed in the last two years, the ex-date adjustment tends to be lower than the final dividend per share of 50 Singapore cents/share. In addition, we like Venture for its US dollar-based revenue as well as its inexpensive valuation.
Telco sector | Overweight OCBC Investment Research, Jan 12
Netflix has officially launched its video streaming services here in Singapore with a basic plan starting from S$10.98/month, which includes streaming to one device in standard definition quality. However, the local telcos with Pay TV offerings are not viewing Netflix as a direct competitor. Instead, both Singtel and StarHub are said to be working with the US streaming operator to allow viewers access to Netflix content via their set-top boxes. And given the limited localised offerings that are available on Netflix, as well as lack of "live" sporting content, we believe that it may be hard to completely "cut the cord" just yet. Maintain "Overweight" on the sector as we believe that the telcos' defensive business could come into play amid the growing volatility in cyclical stocks.
Plantations | Neutral CIMB Research, Jan 12
Palm oil stocks fell 10 per cent month on month to a four-month low of 2.63 million tonnes at end-December 2015. We are positive on this, as the stock level is below our and consensus forecasts. On top of this, ongoing El Nino could crimp palm oil supplies in 2016 and 2017. However, this is partially offset by concern over weaker demand due to lower crude oil price which could dampen biodiesel demand, as well as slower global growth. We expect palm oil stocks to fall 6 per cent month on month to 2.5 million tonnes by end-January 2016 and commodity pool operator prices to trade at RM2,100-2,500 (S$689-821) per tonne in the near term. We stay "Neutral" on the sector.
Compiled by Claire Huang
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
