Today’s Focus

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selective beta plays like Oil & Gas stocks - SembCorp

Marine, Ezion, ASL Marine, STX OSV

There is less negative pressure in markets following the ECB’s

and Fed’s unlimited liquidity injection. However, for this rally to

be sustainable, we need to see less disappointment in headline

news, followed by growth indicators turning decisively

positive. Our regional strategist sees three key risks in ASEAN

as an out-performing region: (1) profit-taking in other markets

(2) lack of sectors to rotate into now that domestic demand

sectors have generally out-performed the market and (3)

policy tightening as inflation has bottomed and is increasingly

threatened by strong domestic demand and global liquidity.

For the Singapore market, it is only cheap on dividend yield

and P/B ratio compared to the rest of the region. Its earnings

and ROE outlook are less attractive. Consensus' general

Overweight position and the market's relative outperformance

could limit further upside. Yield compression and

a slower 2H12 are likely reasons to take profit. However, the

market will continue to be supported by strong yield plays. Our

analyst picks Suntec REIT and FCT. Key picks are the Oil & Gas

plays like SembCorp Marine are Ezion. We also like ASL Marine

and STX OSV.Singapore Market – Limited upside prefer yields and