Economics Markets Strategy - the DBS Vickers Securities Equities ...

Asian Equity Strategy
Economics – Markets – Strategy
Index targets, returns, key trades and risks
We continue to look for a second half recovery
in our index targets. US growth fears have subsided
and short term volatility from runaway inflation
are overshadowing our targeted returns towards
the year end. India’s underweight needs to be
taken into the context of its relatively high volatility;
and Hong Kong our preference for Chinese stocks
listed in Hong Kong . Key risks to our targets remain
with the uncertainty in the US financial crisis and
higher oil prices.
We also present key trade ideas within each of
the countries.
Fig. 26: Index targets and key trades
10-Jun %
Current Target Target
Level 2008 Return Key trade ideas
Taiwan 8370 11000 31.4 Domestic demand recovery and cheap Tech valuations on US recovery
H-share 12790 16000 25.1 Potential liberalisation of energy price to benefit petroleum and power sector
Hong Kong 23376 28000 19.8 HK office sector
India 14889 17500 17.5 Infrastructure
Singapore 3033 3450 13.7 Offshore marine, property, hotels
Korea 1774 1950 9.9 Fiscal stimulus for domestic recovery and exports sector
Indonesia 2374 2600 9.5 Coal and plantations
Thailand 792 840 6.1 Exports and defensive
Malaysia 1231 1200 -2.5 Plantations, oil & gas
Asia ex-Japan* 585 694 18.6
Source: DBS
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