With a viable Covid-19 vaccine seemingly just around the corner, global investors are increasingly switching out of growth plays towards value stocks. Despite signs of optimism in market laggards, UOB KayHian analyst Adrian Loh urges investors to buy into blue chips with strong financials and dividend-paying ability.
The worst performing stocks on the Straits Times Index (STI) experienced an average 13% w-o-w gain return in the past week, beating the STI’s 4% gain. These are Sembcorp Marine (SMM), ARA Hospitality Trust (ARA HTrust), Singapore Press Holdings (SPH), Frasers Hospitality Trust and Bumitama. Loh notes that their improved share prices mask the fact that a number of these counters will likely remain in the financial doldrums even if a substantive economic recovery takes hold in 2021.
