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
- Incremental earnings growth momentum from its core residential, retail mall business and Ascott firming up well
- Upside to valuations from potential asset recycling of mature assets into funds/REITs
- 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:
Previous Report:
Singapore Research Team
DBS Vickers
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http://www.dbsvickers.com/
2016-04-15
