Investors should remain cautious in April-July as STI usually strong one month before SGD tightening by central bank MAS, weak in subsequent three months, says UBS, according to Dow Jones.

UBS notes last tightening in April. Says based on past four episodes of MAS tightening since year 2000, maximum fall in stock market averaged 11% within first 3-month period, which in this case would translate to 2,700 for STI.
 

But with index now around this level, opportunities to accumulate have emerged, the research house says: “Given the on-going risk of contagion, we think a barbell strategy which focuses on oversold stocks on one hand, and defensive/structural growth stories on the other would make sense.”

Cites DBS (D05.SG), CapitaLand (C31.SG), Wilmar (F34.SG) as some oversold stocks, Genting Singapore (G13.SG), Parkway Holdings (P27.SG), Keppel Corp. (BN4.SG) as stocks with defensive revenue or structural growth.

STI +1.1% at 2,724.60.