Alpha Picks
Alpha Picks
Outperforming On Most Measures, Adding Two New Ideas
Highlights
- Our May 26 Alpha Picks outperformed the FSSTI by 0.8ppt/1.8ppt on price/market cap-weighted bases respectively, but underperformed by 0.6ppt on an equal-weighted basis.
- For Jun 26: Add RSTON and VMS; no removals.
- Jun 26 Alpha Picks: BKM, CAO, CIT, FEH, HLA, HUAGL, KEP, NTTDCR, OCBC, OTEK, RSTON, UGAI, VALUE and VMS.
What’s New
- Market review. Singapore equities rose 2.5% mom in May 26. Technology (+11.1% mom), aviation (+7.3% mom) and financials (+6.2% mom) led the gains, aided by a positive US-China trade truce and stronger global risk appetite. Gains were partially offset by weakness in the land transport (-12.8% mom), plantation (-7.4% mom) and industrial (-7.2% mom) sectors.
- Portfolio outperformed on two of three measures. Our Alpha Picks returned 3.3%/4.3% mom on price/market cap-weighted bases, outperforming the FSSTI's 2.5% gain by 0.8ppt and 1.8ppt respectively. On an equal-weighted basis, the portfolio returned 1.9%, lagging the index by 0.6ppt as certain smaller-cap names faced greater selling pressure.
- Gains led by HLA, VALUE and BKM; OTEK and CAO weighed. Hong Leong Asia (+17.9%) surged on the announced YTL acquisition while Valuetronics (+14.7%) re-rated on its industrial mix shift and strong balance sheet. Beng Kuang’s share price strength (+10.3%) was the result of progress on its ASOM consolidation. OCBC (+6.8%), NTTDCR (+5.7%) and CityDev (+5.1%) also contributed positively. Offsetting these were Oiltek (-14.2%) which saw profit-taking after its landmark SAF contract announcement, Huationg Global (-8.0%) and China Aviation Oil (-6.6%).
Action
- Two new additions. We add Riverstone Holdings (RSTON SP) following our upgrade to a BUY rating as supply tightness from US-Iran tensions enables ASP cost pass-through. We also add Venture Corp (VMS SP) on early signs of an AI-driven revenue recovery in 2026, a fortress balance sheet (net cash >S$1b, 21% of market cap) and an attractive 5% dividend yield. No names were removed.
Highlights
- Our May 26 Alpha Picks outperformed the FSSTI by 0.8ppt/1.8ppt on price/market cap-weighted bases respectively, but underperformed by 0.6ppt on an equal-weighted basis.
- For Jun 26: Add RSTON and VMS; no removals.
- Jun 26 Alpha Picks: BKM, CAO, CIT, FEH, HLA, HUAGL, KEP, NTTDCR, OCBC, OTEK, RSTON, UGAI, VALUE and VMS.
What’s New
- Market review. Singapore equities rose 2.5% mom in May 26. Technology (+11.1% mom), aviation (+7.3% mom) and financials (+6.2% mom) led the gains, aided by a positive US-China trade truce and stronger global risk appetite. Gains were partially offset by weakness in the land transport (-12.8% mom), plantation (-7.4% mom) and industrial (-7.2% mom) sectors.
- Portfolio outperformed on two of three measures. Our Alpha Picks returned 3.3%/4.3% mom on price/market cap-weighted bases, outperforming the FSSTI's 2.5% gain by 0.8ppt and 1.8ppt respectively. On an equal-weighted basis, the portfolio returned 1.9%, lagging the index by 0.6ppt as certain smaller-cap names faced greater selling pressure.
- Gains led by HLA, VALUE and BKM; OTEK and CAO weighed. Hong Leong Asia (+17.9%) surged on the announced YTL acquisition while Valuetronics (+14.7%) re-rated on its industrial mix shift and strong balance sheet. Beng Kuang’s share price strength (+10.3%) was the result of progress on its ASOM consolidation. OCBC (+6.8%), NTTDCR (+5.7%) and CityDev (+5.1%) also contributed positively. Offsetting these were Oiltek (-14.2%) which saw profit-taking after its landmark SAF contract announcement, Huationg Global (-8.0%) and China Aviation Oil (-6.6%).
Action
- Two new additions. We add Riverstone Holdings (RSTON SP) following our upgrade to a BUY rating as supply tightness from US-Iran tensions enables ASP cost pass-through. We also add Venture Corp (VMS SP) on early signs of an AI-driven revenue recovery in 2026, a fortress balance sheet (net cash >S$1b, 21% of market cap) and an attractive 5% dividend yield. No names were removed.
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