ASEAN Strategy
To each its own drivers

We expect ASEAN markets to each trade on its own merits in April with an upside bias. The approach of May and the Fed meeting on May 1 should however keep valuations in check. TIPs markets were the three best performing in Q1, returning in excess of 5%. We maintain Thailand and Indonesia as Neutral as political wild cards could continue to support the markets, while Philippines is an Underweight on expensive valuations. In Singapore and Malaysia, we look for positive earnings momentum as key drivers, as the global recovery backdrop stays benign. It is more stock selective in Singapore, while in Malaysia the two convicted strong growth sectors are construction and oil and gas. China rebound is a key theme among sector picks. These include logistics, ports and property names. We believe value has emerged among the interest rate-sensitive sectors. Best to bargain hunt in Property, REITs and Banks from the China angle. Consumption slowdown is a concern for us. Only companies with strong brand names are able to gain strong top line growth. OSIM remains our top pick. Near-term consolidation in plantation stocks present opportunities, in our view, as the ongoing drought may have already dented this year’s FFB yield potential.

Source: HwangDBS Research - 2 Apr 2014