Bottom-up stock picking in Singapore will be increasingly pronounced as city-state’s economic growth moderates in 2H, says Deutsche Bank, which has year-end target of 3,160 for STI, says Dow Jones.

Deutsche tips Singapore’s two casino-resorts, stocks with potential for corporate action such as capital deployment or spin-offs, as well as “deep cyclical” plays as main investment themes.

Its favourites include Sembcorp Industries (U96.SG), Keppel Corp. (BN4.SG), CapitaLand (C31.SG); “valuations look attractive and these companies have significant balance sheet capacity to make accretive acquisitions.”

The research house cites Keppel Land (K17.SG), CapitaCommercial Trust (C61U.SG) as deep cyclical plays as both expected to benefit from recovery in Singapore office sector. Despite upgrading 2010 GDP growth estimate to 13–15% from 7–9%, Singapore government expects slower 2H10 on view 1H10 performance unlikely repeated.

STI flat at 2,952.33.