Blue Chips Likely Performance by Najeeb Jarhom

Keppel Corp

Good support at $8.18-30 should hold and any pullback to below $8.18
would attract medium term investors keen to ride on the 23c dividends
to be paid May 11 as well as the share distribution.
For those who have seen SIA patient investors making good gains from
last year’s SATS share distribution, they have another chance with
KepCorp’s K Green Trust. The stock should break its immediate $8.70-
80 resistance to move closer to next target at $9.25-29 by May.

SPH

Thus falls near $3.60 offer good entry and after range trading around
$3.65 to $3.85, SPH should move up to higher $3.80-$4.10 band a sits
defensive status would attract investors during market weakness.
SPH has a defensive angle although next dividends would be declared
only in April.


Banks
4Q09 earnings for Singapore Banks are expected to be topline
driven, and aided by lower provisions and improved asset
quality. FY09 results should generally exceed expectations,
boosted by non-interest income. Loan growth resumed in
4Q09, with system loans growing 2%. 2009 loan growth was
better than expected at +3.4%, mainly driven by housing
loans (+14.8% y-o-y in Dec 09). The recent correction in
Singapore banks’ valuations could be an opportunity to
accumulate. DBS Research forecasts Singapore banks’
earnings to grow 29% in 2010 driven by lower provisions.
Loan growth should also normalize up to 5% by end 2010.
Coupled with an expected uptick in the SIBOR, these increase
the appeal for Singapore banks, which are net interbank
lenders. Prefer UOB (Buy, TP S$21.20) to OCBC (Buy, TP
S$9.50).



DBS ($14.36) Although its swift fall from $15.80 high on Jan 7 to $14
last week appears scary as it gave up all of Dec’s rise from $14.14 and
its consolidation around $14.06 to $14.44 in past few days indicate
uncertainty as to how market will react to its results, the fact is that it is
at low end of $14 to $15.80 range with support unlikely to break this
month.
Even if market is disappointed and DBS falls below $14, good support
around $13.50-90 should hold, offering trading chances with achievable
TP of $14.60-80.


Upcoming Results:

DBS on Feb 5
SingTel on Feb 9
Comfort Delgro and F&N on Feb 10
Capitaland and Olam on Feb 11
NOL on Feb 12
ST Eng on Feb 18
Cosco and SemMarine on Budget Day Feb 22
CityDev and SCI on Feb 25 and
UOB on Feb 26.