CitiBank

SINGAPORE | EQUITY STRATEGY
FSSTI Target 3450 — Although Singapore may underperform our bullish regional view (MXASJ target 695, +29%) we see 20-30% upside in selected names. Ample global liquidity suggests continued SGD strength, low interest rates and buoyant commodity prices. Banks have lagged, yet are at record earnings, NIMs look close to bottom and business lending is recovering. In a low rate environment property office values could rise and mass market residential and REITs remain attractive. O&M is seeing a new rig replacement cycle underpinned by a strong demand outlook and firm oil prices. At 1.78x P/B,
FSSTI is +0.5SD above mean, and well below "bubble" 2.3-2.4x levels of past cycle peaks. Top picks: DBS, Keppel Corp, Yangzijang, Genting, ComfortDelGro, M1, AREIT, Allgreen.