SINGAPORE - Singapore stocks defied the odds to surge almost 20 per cent last year and as incredible as that was, analysts are bullish that they will continue rising this year.
They forecast that the benchmark Straits Times Index could climb a further 5 per cent to 8 per cent over the next 12 months.
And these stock market experts are now advocating a more aggressive strategy as major concerns that dogged markets last year, such as the euro zone debt crisis and a slowdown in the Chinese economy, have become less worrying.
While defensive stocks still have their place in the discerning investor's portfolio, analysts say it is now time to make some space for cyclical counters as well.
Oil and gas
Companies in this sector are among the most popular with analysts, with Keppel Corp, Semb- corp Marine and Ezion Holdings making it to many brokerages' lists of favourite stocks for the year.
"We expect 2013 to be another year of strong order wins for the offshore players and that would provide positive share price catalysts," noted Maybank-Kim Eng.
OCBC Investment Research wrote: "We continue to favour the oil and gas sector, despite the strong outperformance in 2012 because of the sector's strong order books, good long-term earnings visibility and a host of well-run companies within the sector."
Reiterating its buy call on Keppel, OCBC noted that the firm started to improve the productivity of its regional satellite yards to meet heavier workload requirements.