DBS Group Research Model Portfolio - Blue Chips (2016-04-15)

DBS Group Research Model Portfolio - Blue Chips (2016-04-15)

DBS Group Research Model Portfolio - Blue Chips 


You look to include blue chips into your portfolio to provide steady growth over a longer time period. Blue chips tend to be more stable and their holding period can extend beyond a year. 

The Blue Chips portfolio gained 16.6% on an average return basis, outperforming STI’s 11.9% gain. City Developments, SembCorp Industries and ST Engineering all returned more than 20% gain. We remove City Developments and ST Engineering from the portfolio given recent strong gains. We add SIA Engineering to the portfolio.


CAPITALAND 

  1. Incremental earnings growth momentum from its core residential, retail mall business and Ascott firming up well 
  2. Upside to valuations from potential asset recycling of mature assets into funds/REITs 
  3. Attractive valuations at close to 2009 levels

Company Guide:




SIA ENGINEERING

  • Worst could be over on the earnings front. Possibility of special dividends around the corner. Better entry point now.

Company Guide:




WILMAR INTERNATIONAL

  • Beneficiary of low soybean prices, Indonesia's export tax structure, biodiesel mandate and rising palm oil prices.

Company Guide:




SEMBCORP INDUSTRIES 

  • Stripping out market capitalisation of SMM and Salalah, utilities business is valued at unjustifiably low valuation of 5x PE and 0.5x PB. 
  • We also expect the reversal of price trend in the event of elimination of SMM privatisation overhang.

Company Guide:









Singapore Research Team DBS Vickers | http://www.dbsvickers.com/ 2016-04-15




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