UOB Kay Hian analysts have added Capitaland Ascott Trust (CLAS) and SATS to their alpha picks for January while removing RH Petrogas T13 , SIA Engineering and Far East Hospitality Trust Q5T (FEHT).
CLAS is a play on Singapore’s ongoing tourism recovery, as its portfolio occupancy is expected to improve in 2HFY2023 and 2024 on the back of normalisation in business and leisure travel.
Meanwhile, SATS’s recovery momentum will be driven by continued recovery of regional flight activities and the stabilisation as well as a potential reacceleration of air cargo growth.
RH Petrogas and SIA Engineering were removed due to a lack of share price catalysts and upcoming expected translation losses respectively. FEHT was removed from the alpha picks after its strong performance since its addition to the portfolio, the analysts explain.
UOBKH’s alpha picks portfolio outpaced the Straits Times Index (STI) in 4QFY2023 and the full year, gaining 2.2% and 8.7% on an equal-weighted basis respectively versus the STI’s 0.7% gain and 0.3% drop.
On a market-cap weighted basis, UOBKH’s portfolio rose 2% for 2023, surpassing the STI by 2.3 percentage points.
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For December 23, the alpha picks portfolio grew by 5.9% m-o-m on an equal-weighted basis, beating the STI by 0.5 percentage points. This is primarily driven by Frencken, Seatrium and Mapletree Industrial Trust ME8U .
“Frencken was driven by an improved outlook due to increased orders from key semiconductor customers, while Seatrium increased on the back of better order win expectations and higher oil prices.
“Mapletree Industrial Trust rose on better S-REIT market sentiment. However, our portfolio’s performance was partially offset by RH Petrogas due to poor results from the company’s drilling programme,” the analysts add.
