The Singapore Exchange has been one of the best performing stock markets in the Asia region recently.
The exchange’s main index, The Straits Times Index, has risen more than 10% so far this year, while the Singapore economy recently posted its first quarter of GDP growth since the first quarter of 2019.
With optimism surrounding Singapore stocks, DBS has revealed two stocks its analysts like in April.
Keppel Corporation (SGX: BN4)
Keppel Corporation is a major Singapore-based conglomerate with a diversified mix of operations spanning four key businesses units – Energy and Environment, Urban Development, Connectivity and Asset Management.
While Keppel’s Offshore and Marine business is the world’s largest oil rig construction company, DBS sees potential for growth in the conglomerate’s Urban Development and Renewable Energy units.
“Keppel Corp is a mid-cycle recovery laggard that should see improving investor interest going forward with its latest positive business update from Keppel Land’s home sales, SSTEC and Keppel O&M’s positive EBITDA turn,” says DBS.
“It is in advanced talks with Brazil for a huge FPSO newbuild contract worth ~S$3bn, potentially doubling O&M’s orderbook. The company is also accelerating its clean energy transition into renewables and EVs.”
Keppel Corporation posted revenue of S$6.57 billion in 2020. Over the past 12 months Keppel Corporation’s stock price in down around -6%
CDL Hospitality Trusts (SGX: J85)
CDL Hospitality Trusts is a Real Estate Investment Trust (REIT) with a portfolio of 18 hotel properties across eight countries.
DBS likes the fact CDL is exposed to markets which are recovering well from COVID-19.
“CDL HT’s top 3 revenue exposure markets are Singapore, New Zealand and the UK. The COVID-19 situation in these 3 countries are under control while the UK is currently leading the developed economies in COVID-19 vaccinations.
“CDL HT trades at a price/book (P/NAV) of 0.8x (close to -1.5 SD (standard deviation) levels) and at an implied average price/room of S$0.6m for its Singapore hotels, which is below replacement cost of S$0.75/room in Singapore.
CDL Hospitality Trusts’ share price is up around 38% over the past 12 months.