SINGAPORE (Jan 16): UOB Asset Management (UOBAM) says it favours US equities compared to Asian equities, owing to the former’s resilient corporate earnings.
This comes as part of UOBAM’s rating upgrade for equities as a whole to “neutral” this quarter, from “underweight” in the second half of 2019.
“While we are currently neutral on Asian equities, we will shift to a positive weightage should conditions such as greater improvement in global economy and trade and easing of the US dollar materialise,” says Anthony Raza, head of multi-asset strategy at UOBAM, in a Jan 16 statement.
Within Singapore equities, there could also be opportunities, according to UOBAM.
Raza notes that local equities offer attractive valuations and growth potential supported by the government’s fiscal flexibility.
In addition, UOBAM favours investment grade bonds.
Raza points out that corporate bonds and Asian bonds present opportunities to buy on price dips as they are “reasonably valued”, he says.
He expects fixed income to generate an annual return of about 3% to 4% this year.
