The team at UOB Kay Hian (UOBKH) says its alpha picks portfolio has met a “robust” end to the 1Q2024 driven by broad-based strength across its portfolio. The team’s alpha picks portfolio for the month of March outperformed the benchmark Straits Times Index (STI) by a material 3.40 percentage points (ppt) and 2.90 ppt on an equal- and market-weighted basis respectively.
With UOBKH’s portfolio increasing by 13.7 ppt quarter-on-quarter (q-o-q), it has the STI beat once again by a margin of 14.2 ppt q-o-q.
With current enthusiastic responses towards artificial intelligence (AI) and a strong end to the US earnings season for March, this resulted in US markets hitting record highs. Global markets are subsequently higher, with STI seeing an increase of 2.6% month-on-month (m-o-m).
UOBKH attributes its broad-based outperformance to its top performers, Riverstone, Yangzijiang Shipbuilding (YZJ) and Singapore Telecommunications Z74 (Singtel). Due to improving sequential earnings for the last quarter of 2023, Riverstone saw a sharp increase of 30.8% m-o-m. Additionally, YZJ increased by 9.1% m-o-m resulting from its promising 2024 outlook. Singtel similarly benefitted from its potential shareholder value arising from market speculation of its decision to sell its Australian business, increasing by 7.7% m-o-m.
Add LREIT and CSE Global 544
For its April 2024 portfolio, UOBKH has added Lendlease Global Commercial REIT JYEU (LREIT) following the recovery of LREIT’s 313@Somerset mall in Orchard. The team has also included CSE Global (CSE) with a forecasted earnings growth boosted by its record-high order book respectively.
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Analyst Jonathan Koh has kept his “buy” call on LREIT with a target price of 93 cents with the outperformance of 313@Somerset. The REIT obtained a “strong positive” rental reversion of 15.7% in 2QFY2024; 313@Somerset’s rental reversion came in over 20% while Jem’s stood at 10%.
With the construction of a multi-functional event space at Grange Road Car Park and the potential lease to Live Nation, this further enhancement of the downtown mall is expected to attract more youths, says Koh.
Analysts John Cheong and Heidi Mo have also kept their “buy” call on CSE Global with a target price of 56 cents with the company’s promising demand from reputable institutional and accredited investors. Since completing a share placement valued at an issue price of 40 cents per share, CSE has issued sixty million new ordinary shares which hit $24 million and $23.2 million in gross and net proceeds respectively.
See also: Suntec REIT biggest beneficiary from MAS’s ‘looser’ leverage, ICR rules: OCBC
“The strong support from investors illustrates confidence in CSE’s growth potential, with opportunities arising on the back of megatrends such as urbanisation, electrification and decarbonisation,” say the analysts.
MINT, Food Empire and Civmec P9D removed
The team’s April 2024 portfolio also marks the removal of Mapletree Industrial Trust ME8U (MINT), Food Empire Holdings F03 (FEH) and Civmec due to the absence of near-term catalysts.
The STI closed 25.06 points lower or 0.77% down at 3,222.66 points on April 3.
