CIMB says temporary pullback in Singapore equity market
looks likely; “equity markets are all hyped up and that makes us worried.” Says
global economic picture remains cloudy given potential inflation risk, concern
that higher oil prices could sap consumers’ buying power. “While everyone in
equity markets is growing bullish by the day, it is worthy to note that the
U.S. still faces tremendous headwinds.” Advises temporary caution as says less
positive economic data could see equity markets lose steam. Still, expects
coming pullback to be short-lived and maintains Overweight position on
Singapore market, says is likely to advocate return to cyclicals such as NOL
(N03.SG), Indofood Agri (5JS.SG), SGX (S68.SG) and SembMarine (S51.SG) post
pullback. Maintains end-2009 STI target of 2300 and heading towards 2010
expects STI to approach 2720, which would be equivalent to 16X FY10 PE.
Benchmark index last +0.7% at 2393.61.