UOBKH portfolio of alpha picks beats STI in July; new top choices for Singapore, Malaysia named
The alpha picks portfolio had gains of 17.7 per cent month on month on an equal-weighted basis, or 6 per cent on a market capitalisation-weighted basis. This was in comparison to a 5.3 per cent month-on-month increase for the STI in both respects.
Positive news about the S$5 billion capital injection by the Monetary Authority of Singapore (MAS) backed the strong performance of the portfolio, said UOBKH.
'With 10 out of 14 stocks in our portfolio being non-index stocks, we remain well-positioned for MAS' S$5 billion capital injection,' the report indicated.
The STI experienced gains in the latter half of July, driven less by the original Aug 1 tariff deadline and more by the better-than-expected US economic data that boosted investor optimism, added UOBKH.
The alpha picks portfolio performance was driven by jumps in iFast, Frencken Group and China Sunsine Chemical Holdings. There were no underperformers in July.
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New Singapore picks for August
Three new small to mid-cap stocks – Hong Leong Asia, Marco Polo Marine and CSE Global – were added to the Singapore alpha picks portfolio for August.
Hong Leong Asia was added due to tailwinds in the construction sector, while Marco Polo Marine was included because it is set to benefit from high charter rates and vessel utilisation in the second half of the year, said UOBKH. CSE Global was added due to a robust and growing orderbook.
The pair of iFast and Sheng Siong were removed, marking profits of 40.7 per cent and 19.3 per cent, respectively.
August's portfolio has been adjusted in preparation of the MAS cash injection, which is set to lift undervalued, small-cap stocks.
UOBKH's Singapore alpha picks portfolio for August thus comprises PropNex, DFI Retail, ComfortDelGro, Hong Leong Asia, Marco Polo Marine, CSE Global, China Sunsine Chemical Holdings, Food Empire Holdings, Frencken Group, Valuetronics Holdings, UMS Integration, CapitaLand Ascendas Real Estate Investment Trust, OCBC and CapitaLand Integrated Commercial Trust.
New Malaysia picks for August
The Malaysia alpha picks outperformed the Kuala Lumpur Composite Index (KLCI), gaining 5.6 per cent as the KLCI fell 1.3 per cent in July. The construction, building materials and property sectors were the biggest winners.
Only Zetrix AI and Duopharma Biotech saw negative returns at minus 7.4 per cent and minus 1.5 per cent, respectively. The utilities, banking and healthcare sectors experienced the largest drops.
RHB Bank is a new addition to the portfolio, with UOBKH stating that the defensive and high-yielding bank should pare back some of its year-to-date losses.
It replaces Duopharma Biotech, which UOBKH said lacks near-term catalysts.
The August picks are calibrated to outperform anticipated events such as a 'summer lull', triggered by the poor US non-farm payroll data on Aug 1. Meanwhile, the portfolio is set to take advantage of Malaysia's recently struck trade deal with the US, where imports from the South-east Asian country will be charged a 19 per cent tariff .
UOBKH's August Malaysia alpha picks portfolio thus comprises Coraza Integrated Technology, Eco World Development, Gamuda, Hume Cement Industries, IJM Corp, Inari Amertron, RHB Bank and Zetrix AI.
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