Alpha Picks
Strategy - Alpha Picks: Weathering A Hawkish October
Highlights
- Our Oct 26 Alpha Picks underperformed the FSSTI by 2.2ppt, 1.4ppt and 0.4ppt on a price-weighted, market cap-weighted and equal-weighted basis respectively.
- For Nov 26: Add YZJSGD; remove OCBC and KEP.
- Nov 26 Alpha Picks: BKM, CICT, FEH, HUAGL, NTTDCR, OTEK, RSTON, SATS, UIBREIT, VALUE, VMS, and YZJSGD.
What’s New
- Market review. Singapore equities fell 5.3% mom in Oct 26. Others (+0.9% mom) and land transport (+0.8% mom) were the only sectors to post gains. In contrast, plantation (-19.5% mom), shipyards (-8.8% mom), technology (-7.1% mom) and finance (-6.4% mom) led the declines. Plantation stocks were hit by the transboundary haze, which raised regulatory risks for Indonesian planters, while finance was weighed by foreign brokers’ downgrade of the banking sector. Technology tracked the regional tech hardware selloff on doubts about monetising AI. Property (-4.8% mom), aviation (-4.7% mom), telecoms (-2.8% mom) and healthcare (-1.2% mom) also weakened. REITs outperformed with a mild decline of 0.7% mom, being relatively resilient. Singapore stocks were broadly weaker in Oct 26, reflecting weaker sentiment amid the Fed’s tightening and higher bond yields.
- Portfolio underperformed in Oct 26. Our Alpha Picks portfolio declined 7.5%, 6.7%, and 5.7% mom on a price-weighted, market cap-weighted, and equal-weighted basis, underperforming the FSSTI’s 5.3% decline by 2.2ppt, 1.4ppt and 0.4ppt respectively. This underperformance came amid a broad selloff as the Fed’s tightening, higher bond yields and doubts about monetising AI triggered profit taking. Continued weakness in SMID caps weighed further on portfolio performance.
- Gains led by CICT and FEH; OTEK, BKM, KEP and HUAGL weighed. FEH (+5.8%) and CICT (+2.2%) were the only gainers, with FEH rebounding from last month’s sharp selloff and CICT holding up as a defensive name amid market volatility. Conversely, OTEK (-18.9%), BKM (-10.8%), KEP (-10.5%) and HUAGL (-9.2%) recorded the largest declines. OTEK, BKM and HUAGL weakened amid broad small-cap risk-off sentiment. KEP saw its valuation premium narrow. OCBC (-8.4%) also fell after downgrades from foreign brokers. VMS (-7.1%) and VALUE (-4.1%) tracked the regional tech hardware selloff, while SATS (-4.4%), RSTON (-3.3%), NTTDCR (-3.2%) and UIBREIT (-1.9%) also declined.
Highlights
- Our Oct 26 Alpha Picks underperformed the FSSTI by 2.2ppt, 1.4ppt and 0.4ppt on a price-weighted, market cap-weighted and equal-weighted basis respectively.
- For Nov 26: Add YZJSGD; remove OCBC and KEP.
- Nov 26 Alpha Picks: BKM, CICT, FEH, HUAGL, NTTDCR, OTEK, RSTON, SATS, UIBREIT, VALUE, VMS, and YZJSGD.
What’s New
- Market review. Singapore equities fell 5.3% mom in Oct 26. Others (+0.9% mom) and land transport (+0.8% mom) were the only sectors to post gains. In contrast, plantation (-19.5% mom), shipyards (-8.8% mom), technology (-7.1% mom) and finance (-6.4% mom) led the declines. Plantation stocks were hit by the transboundary haze, which raised regulatory risks for Indonesian planters, while finance was weighed by foreign brokers’ downgrade of the banking sector. Technology tracked the regional tech hardware selloff on doubts about monetising AI. Property (-4.8% mom), aviation (-4.7% mom), telecoms (-2.8% mom) and healthcare (-1.2% mom) also weakened. REITs outperformed with a mild decline of 0.7% mom, being relatively resilient. Singapore stocks were broadly weaker in Oct 26, reflecting weaker sentiment amid the Fed’s tightening and higher bond yields.
- Portfolio underperformed in Oct 26. Our Alpha Picks portfolio declined 7.5%, 6.7%, and 5.7% mom on a price-weighted, market cap-weighted, and equal-weighted basis, underperforming the FSSTI’s 5.3% decline by 2.2ppt, 1.4ppt and 0.4ppt respectively. This underperformance came amid a broad selloff as the Fed’s tightening, higher bond yields and doubts about monetising AI triggered profit taking. Continued weakness in SMID caps weighed further on portfolio performance.
- Gains led by CICT and FEH; OTEK, BKM, KEP and HUAGL weighed. FEH (+5.8%) and CICT (+2.2%) were the only gainers, with FEH rebounding from last month’s sharp selloff and CICT holding up as a defensive name amid market volatility. Conversely, OTEK (-18.9%), BKM (-10.8%), KEP (-10.5%) and HUAGL (-9.2%) recorded the largest declines. OTEK, BKM and HUAGL weakened amid broad small-cap risk-off sentiment. KEP saw its valuation premium narrow. OCBC (-8.4%) also fell after downgrades from foreign brokers. VMS (-7.1%) and VALUE (-4.1%) tracked the regional tech hardware selloff, while SATS (-4.4%), RSTON (-3.3%), NTTDCR (-3.2%) and UIBREIT (-1.9%) also declined.
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
