UOBKH ‘Alpha Picks’ beats STI in August due to large-caps; Sats in for September
The Singapore portfolio rises 5.6% on a market cap-weighted basis while the STI gains 2.3%
[SINGAPORE] The UOB Kay Hian (UOBKH) “Alpha Picks” portfolios for both Singapore and Malaysia outperformed their respective benchmark indices on key measures in August, said the brokerage on Thursday (Sep 3).
The Singapore portfolio returned 5.6 per cent and 4.7 per cent on a market cap-weighted and price-weighted basis, respectively. This outperformed the Straits Times Index (STI), which saw a 2.3 per cent increase in August. Strong performance from larger-cap picks masked sharp declines across several smaller-cap names.
The portfolio declined 4.6 per cent month on month on an equal-weighted basis, underperforming the STI by 6.9 percentage points.
The broader market remained largely stable amid ongoing results announcements and assessments of broader conditions amid rising bond yields. Gains in the Singapore market were led by shipyard stocks, which rose 8.6 per cent. Plantation stocks were up 6.9 per cent and technology stocks increased 5.6 per cent, while Reits led declines at 3.8 per cent.
The Singapore portfolio’s performance was driven by gains in OCBC, which jumped 9.8 per cent, Venture Corporation, which rose 7.4 per cent, and City Developments, which increased 6.8 per cent.
Underperformers included UltraGreen.ai with a 42.9 per cent plunge, Huationg Global, which fell 23.4 per cent, and Beng Kuang Marine, which was down 16.2 per cent.
New Singapore picks
One new stock – Sats – was added to the Singapore Alpha Picks portfolio for September, while Hong Leong Asia and UltraGreen.ai were removed due to portfolio rebalancing.
Sats was added on its strong underlying performance and expected improvements in near-term margin headwinds.
UOBKH’s Singapore Alpha Picks portfolio for September thus comprises Beng Kuang, CityDev, Food Empire, Huationg Global, Keppel, NTT DC Reit, OCBC, Oiltek, Riverstone Holdings, Sats, SIA Engineering, UI Boustead Reit, Valuetronics and Venture.
Malaysia portfolio outperforms
The Malaysia alpha picks outperformed the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI), posting an average return of 2 per cent in August compared with the index’s modest 0.1 per cent gain.
The broader Malaysian market experienced an “M-shaped” consolidation followed by a sharp month-end correction. Sentiment was shaped by domestic political developments, elevated US Treasury yields, persistent geopolitical tensions and rising risk aversion in the small-mid cap space.
Oxford Innotech gained 14.8 per cent, Northeast Group was up 11 per cent and Gamuda rose 5.6 per cent, anchoring gains for the portfolio. On the other hand, Mr DIY fell 12.7 per cent, Tenaga Nasional contracted 3.2 per cent and SD Guthrie dropped 3.2 per cent.
New Malaysia picks
For September, UOBKH said it favours high-quality, large-cap domestic leaders offering resilient earnings, robust cash flows and defensive characteristics, while selectively accumulating fundamentally sound laggards and secular growth beneficiaries.
Bermaz Auto and Sunway Reit were new additions to the portfolio.
Bermaz Auto was added as it is set to deliver robust results backed by resilient Mazda sales and favourable foreign exchange movements, while Sunway Reit was selected as its pipeline of asset acquisitions should support its solid 6.5 per cent yield.
Meanwhile, Oxford Innotech was removed following an impressive 78.8 per cent return since its inclusion, and Mr DIY was dropped after soft results.
UOBKH’s September Malaysia Alpha Picks portfolio is made up of Bermaz Auto, CIMB Group, Dialog, Gamuda, Northeast Group, Petronas Dagangan, SD Guthrie, Solarvest Holdings, Sunway Reit and Tenaga Nasional.
