The rebound that started off at STI 2950 continued last week, touching as high as 3051. The swing is within our expectations.
We had earlier said that 2950 is an attractive level for bargain hunting with the immediate bounce capped at 3050.
Technically, further upside to 3150 is possible in the week/month ahead but not before a slight pullback at 3050 to rebase around the 3000 level.
With the likelihood of a trough at 2950 and the current rebound still having c.100pts more to go before 3150, traders should bargain hunt on minor dips.
Technically, we peg STI support around 3000.
Our large cap picks are CapitaMalls Asia, Genting, Keppel Corp, Ezion, Capitaland, Keppel Land and ST Engineering.
Nam Cheong's built Armada Tuah, Malaysia's first diesel-electric multi-purpose platform supply vessel. File photoSmall cap picks are Bumitama Agri, Venture Corp, ARA, Frasers Centrepoint Trust, Mapletree Greater China Commercial Trust and CapitaRetail China Trust. The recent price correction clearly opens up a trading opportunity for Venture Corp ahead of the company announcing its FY results by the end of February.
Venture Corp is expected to declare a DPS of 50Scts, offering a yield of nearly 7%.
Shares of Nam Cheong rallied to a 52-wk high at the turn of 2014 and has held firm in spite of the recent market sell-down, affirming its price strength.
Nam Cheong is one of our top picks in the O&G segment.
