SGX retail trades spike as investors pick up bargains

Singapore

TUMULTUOUS markets might just offer the chance for a buying spree, stock watchers believe.

With blue-chip counters having suffered in the latest sharp market pullback, brokers have come out with their top picks if prices were to slide further.

Lim Siew Khee, analyst at CIMB Singapore Research, wrote in a strategy note on Wednesday morning: "No one knows how long the correction will last but we see the opportunity to prepare a shopping list of 'must-own' stocks backed by fundamentals."

A third of the benchmark Straits Times Index's constituents traded at three-month lows on Tuesday, bourse operator Singapore Exchange (SGX) has noted.

Among the hapless 10 stocks were Singtel, Wilmar International, Jardine Cycle & Carriage and Ascendas Reit.

And during the two-day sell-off, the top three losers on the index were Golden Agri-Resources, Yangzijiang Shipbuilding Holdings and Keppel Corporation (KepCorp).

CIMB's Ms Lim noted that, while the capital goods, gaming, and technology and manufacturing sectors were hardest hit in the sell-off, the earnings season could bring good news on the back of stronger growth.

She recommended buying KepCorp at S$7.95, under its recently upgraded target price of S$10, as well as Venture Corporation at S$21.77.

ST Engineering's buy threshold was set at S$3.15, on industry prospects as well as the stock's discount against peer SIA Engineering.

Meanwhile, Ms Lim pegged AEM Holdings as a buy at S$4.70, and Genting Singapore at S$1.20.

The research team at KGI Securities (Singapore) also said in its morning update that "we would pick up many of the blue-chip stocks that have retraced" their steps to last November or December - such as KepCorp, CapitaLand, Ascendas Reit, Singtel, Venture and Genting Singapore.

DBS analyst Yeo Kee Yan told The Business Times on Tuesday evening that sectors such as oil and gas, which are in the middle of a recovery cycle, still have legs. Also, in the event of inflation and growth, commodities and basic materials "should start to outperform once the market stabilises and recovers - albeit at a more gradual pace", he added, remarking that "January's rise was too fast".

Given the buzz, it sure looks as if investors are paying attention. Retail participation in securities here spiked on Tuesday, according to SGX data.

About one-quarter of the market's value for the day came from retail trade, with these investors ploughing in a net S$185 million of fresh funds.

Stocks that caught their attention, besides the usual cast of index heavyweights, included Sembcorp Marine, Midas Holdings and Cosco Shipping.