The current rally in STI is due to MAS latest policy on SGD, setting the rate of appreciation of the Singapore dollar's nominal effective exchange rate (NEER) policy band at zero percent, marking a shift from its previous policy stance of a "modest and gradual" appreciation of the local dollar.
I understand from my friends who contacted me who asked if it meant that SGD is going to depreciate. This is not the case. SGD is just not appreciating as fast as before so as to help the weak economy.
As a result, STI rallied and currently standing at 2911.
short term trades to note: United Engineers, Cityneon, OKH global.
KEY HIGHLIGHTS
Strategy
Positioning After The Latest Monetary Policy
We position selectively after the recent policy change to a neutral appreciation slope for the Singapore dollar.
We prefer companies with foreign-denominated earnings or very resilient profits.
Results
Keppel REIT (KREIT SP/BUY/S$1.01/Target: S$1.22)
1Q16: Enthusiastic leasing despite sector headwinds.
At A Glance
Corporate
Keppel T&T: 1Q16 profit down 15.6% yoy.
Olam International: Secures US$650m revolving credit facility.
Soilbuild Reit: 1Q16 DPU down 4.7% yoy.
YuuZoo: Alibaba, YuuZoo expand joint e-sport events.
Economics
Government: MAS stuns market by flattening Singapore dollar policy band.
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https://research.uobkayhian.com/content_download.jsp?id=33524&h=685677a17902e2dbc239ca05391544e1
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