Singapore's quarterly corporate results season shows that earnings downgrades are coming from most of the externally exposed sectors, CIMB said, and cut its ratings on commodities and transport sectors back to 'underweight', while raising financials to 'overweight' and telecoms and REITs to 'neutral'.
The Straits Times index has risen nearly 9 percent so far this year and hit a streak of five-year highs, but the gains have paled versus markets in Indonesia, Philippines and Thailand.
In Singapore, along with REITS, consumer, telecoms and lately, banks outperforming year-to-date, stocks with a predictable earnings profile have gained, while the commodity sector is the biggest loser, CIMB said.
"We interpret all these as reflective of the fact that we are in a 'safety bubble'. After the 2008 crisis and the subsequent Europe aftershocks, investor are not in the mood to be gung-ho in betting on a cyclical recovery," analyst Kenneth Ng said in a strategy note.
"The Great Rotation argument (from bonds to risky stocks) early this year just ain't happening. Where investors do move into stocks, it is yields and FCF (free cash flow) visibility that they gun for." (Reporting by Anshuman Daga)
1338: STOCKS NEWS SINGAPORE-WE Holdings jumps on Myanmar business plan
Shares in WE Holdings Ltd jumped as much as 11 percent after the electronics manufacturer and distributor unveiled plans to invest in a Myanmar-based cement plant.
WE Holdings plans to buy a 20 percent stake for $20 million in Dragon Cement, a unit of the Ruby Dragon controlled by Myanmar tycoon Nay Win Tun, with the option of purchasing another 20 percent in three months after the completion of the deal.
Shares of the company jumped to a one-month high of $S0.113, and trading volume more than quadrupled to over 200 million from their five-day average. WE Holdings, which has a market value of $55 million, topped trading volume.
Companies tapping business opportunities in the Southeast Asian country have seen their shares surge on expectations of strong growth, but the country's political uncertainty remains a risk.
Last month, Aussino Group Ltd, a Singapore bed linen retailer, planned to buy the energy business of Max Myanmar Group but the Singapore Exchange rejected the deal, citing that the head of Max Myanmar remained on the U.S. sanction list. Shares of Aussino, which had run-up ahead of the announcement, dropped as much as 58 percent within a day to a 10-month low. (Reporting by Rujun Shen; Editing by Anand Basu) 12:33 STOCKS NEWS SINGAPORE-Index up; SingTel, Keppel strong
Singapore shares edged slightly up, with Singapore Telecommunications rising to its highest since January 2008 and Keppel Corporation hitting a one-month high.
The Straits Times Index edged up 0.1 percent to an intra-day high of 3,458.04, its highest since January 2008, while the MSCI's broadest index of Asia-Pacific shares outside Japan gained 1 percent.
Shares of Keppel Corporation, the world's biggest rig builder, rose to a one-month high of S$11.09 in relatively light trading. Only 2.6 million shares changed hands, 14 percent below the five-day trading volume average.
Its crosstown rival Sembcorp Marine Ltd rose 0.9 percent to S$4.47.
Despite facing increasing competition from Chinese peers, Singapore rig builders are expected to benefit from the strong demand from global offshore oil and gas industry, Barclays analysts said in a note.
"The recent flurry of activity in the Gulf of Mexico, as well as positive demand trends from the North Sea, bodes well for the order outlook for Singapore rig builders," they said, giving preference to Keppel Corp for its better margin outlook.
Among other stocks, SingTel rose as much as 1.5 percent to S$4.08, its highest in nearly five-and-a-half years. Nearly 8 million shares changed hands, making SingTel one of the most actively traded stock by value on Monday.
SingTel, Singapore's largest company by market capitalisation, posted a 33 percent drop in fourth-quarter net profit, but said it will pay a final dividend of 10 cents a share, up from 9 cents a year ago.
The company's Australian unit, Optus, has announced plans to roll out Australia's first multi-band 4G network.