UOB Kay Hian reports a divergence in institutional and retail investors' behaviour in May, while the Straits Times Index (STI) saw an overall “stable” month after picking up from a mid-month dip to 3,032 to close at 3,164 on May 31.

According to analyst Adrian Loh and the Singapore research team, institutional investors were net buyers for May, purchasing 70% more stocks than what they sold. 

Banks, telecoms and industrial sectors saw the strongest interest from institutional investors. In addition, UOB KH notes that Suntec RIET saw significant selling by institutions as it was taken out of the MSCI Singapore Index on May 28 and replaced with Nasdaq-listed Sea.

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In comparison, retail investors were net sellers during the month, selling 40% more stock than what they bought. Besides being net sellers of the financial sector in direct contrast with institutions, retail investors preferred industrial REITs and hardware technology stocks including Ascendas REIT, Venture Corporation and AEM Holdings.May also saw a reversal of the positive sentiment towards SIA with net retail selling of $46 million, compared to the prior month’s net buying worth $180 million.

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Among the top 20 highest traded stocks for May, the UOB KH team saw the biggest divergences between institutional and retail investors for DBS Bank, Oversea-Chinese Banking Corp (OCBC) Yangzijiang Shipbuilding (Holdings), where institutions bought more, as well as Ascendas REI and Venture Corporation, with retail investors purchasing more.

“Besides financial and aviation stocks, some of the most actively traded companies for institutional and retail investors were iFast and Sembcorp Industries, which have seen strong share price performances y-t-d, up 183% and 29% respectively,” the team adds.

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Institutional investors were net buyers for the two stocks in May, while retail investors took profit. Medical-related stocks such as Medtecs, Riverstone, Top Glove and UG Healthcare were also well traded.

UOB KH’s year-end STI target remains unchanged at 3,450.

The team’s top picks for Singapore large-cap stocks are Ascendas REIT, ComfortDelGro, Genting Singapore, OCBC, SGX, and Yangzijiang. In the small/mid-caps, UOB KH’s picks are Food Empire, GHY Media, Hong Leong Asia and Innotek.