The Great Singapore Sale.

Lately, I've been asked by many people whether it is a good time to buy stocks now, and if so, which stocks would be worth buying.

But before I go into that, I feel that I should state this disclaimer:

The sub-prime crisis currently faced by the American economy is very, very real, and so is the threat that it could potentially send the U.S. into a recession, and the rest of the global economy along with it.

If that were to happen, then we would experience a situation whereby stock prices would be falling lower over the next few years.

If you believe that the above scenario is more likely than not, then obviously it would be better to completely stay away from stocks for the next few years until the recession has done its damage.

In which case, you should probably stop reading from here and ignore the rest of this post.

But if you believe that the global economy is in good stead, that these difficult times are only temporary, and that 2008 will still be a good year for Singapore equities, then here are some of the stocks that I believe are worth considering.

Index and large cap exposure:

With the STI Index having corrected some -20% from its 3900 high, it might be more convenient for one to buy a Singapore equity fund or even the STI ETF to gain from the broad Index rise.

Personally, my preference remains for UIS (see here).

UIS remains on the stock alert with a buy at $1.67 at 20% below NAV.

These two other stocks also remain on the stock alert because I believe them to be undervalued.

Sing Inv is revised to a buy at $1.55 at 10% below NAV.

IFS is revised to a buy at $0.685 at 30% below NAV.

Property exposure:

The property sector was one of the worst hit recently, with stocks prices falling to levels unseen since 2005. At present:

Capitaland is trading at only 7x PE at $5.89 (below its 16x historical PE).

City Development is trading at only 17x PE at $11.70 (below its 40x historical PE).

Ho Bee is trading at only 3x PE at $1.30 (below its 15x historical PE).

Eastern is trading at only 2x PE at $0.175 (below its historical 12x PE).

For the past few months, I had advised against investing in property stocks because I believed
that it would be difficult for property companies to maintain or grow on their record earnings for 2006/7.

But at such low valuations, I am going to change my mind and say that it might be worth a calculated risk to invest in property stocks now.

My favourite would be Eastern, not because I am vested in it, but because it offers a very good 9.7% yield at current price.

As such, I am putting Eastern on the stock alert with a buy at $0.18 at 80% below Fair Value.

China exposure:

Many china stocks are undervalued at the moment, but I prefer to invest in market leaders at this point because of their better fundamentals, being bigger and more stable, and offering better governance. Also, they will be the first to recover if and when the market resumes its uptrend.

My picks are as follows:

Sinotech Fibre is revised to a buy at $0.64 at 55% below Fair Value.

Fibrechem is a buy at $0.845 at 50% below Fair Value.

Celestial is a buy at $0.675 at 60% below Fair Value.

Sihuan is a buy at $0.67 at 50% below Fair Value.

Additionally, I think it would be worthwhile to look at Inter Roller - a company with a strong monopolistic position in its industry.

Inter Roller is a manufacturer of baggage roller systems used in airports. It has facilities in Singapore and Malaysia, and subsidiaries and offices in UK, HK, UAE, and PRC providing full project management, operations, and maintenance service support.

Inter Roller usually trades at a historical 12x PE, but at present, it is only trading at 6x PE and offering a very good 7.4% yield.

As such, I am putting Inter Roller on the stock alert with a buy at $0.525 at 50% below Fair Value.