Conclusion    ‘Which will be the top performing ASEAN market in 2018?’ Indonesia (28%)and Thailand (24%) won the most responses at our ASEAN conference. Weare more cautious on these markets, focusing on the selected opportunitiesbelow. We see better value in SG (18% of vote) led by banks. And while Philshas dropped in investors’ pecking order (15% of poll), we stay positive andsee good stories in property, consumer and infra. In Malaysia, which got thelast 15%, we still like the catalyst-rich construction and GLC reform themes.    Impact    Singapore: Banks steaming ahead. Our FSSTI target offers the highestTSR in ASEAN. Banks remains our favourite sector and we see MAS monthlyloan growth data in the mid- to high single digits as the near-term catalyst(OCBC is best positioned on asset quality and our top pick). Our CAPL NDRin Europe bolsters our confidence in this compounder pick. We see positivecatalysts for KREIT and THBEV, but flag timing considerations in the report.    Philippines: We like property and consumer sectors the most. Phils is ourregional strategy team’s lone OW-rated ASEAN country, and our bottom-upnext-twelve-month index target of 8,600offers a TSR of 8%. We think macroconcerns are exaggerated and see execution on tax reform and infrastructureroll-out as positive top-down catalysts. We are most overweight the propertyand consumer sectors, though our overall top pick is infrastructure play MPI.    Malaysia: Construction and GLC reform themes are catalyst-rich. Stillsluggishmarket earnings momentum has yet to reflect the strong +5.7% 1H17GDP growth trajectory and our bottom-up 1,882KLCI target elicits a modest5% TSR. GLC Reform remains our structural market theme. Newsflow shouldpick up providing catalysts for key picks Sime Darby, Tenaga and POS(M).Other favoured sectors are i) banks, with EPS recovery from rising NIM anddeclining costs – we like CIMB and RHB; and ii) construction, where orderflow from large rail projects should benefit names like Econpile and Gamuda.    Indonesia: get your hands dirty. With limited upside to our 5,700JCI targetwe are neutral on the market. Our model portfolio is concentrated on bottomupideas at reasonable valuations including banks, mining and public sectorspend pick-up plays. We highlight the coal sector: product prices are holdingup better than expected, results are set to surprise, and yields as high as 11%(ITMG) provide a margin of safety. Newsflow on ‘cost-plus’ domestic sales iscreating an opportunity in the names, though we’d avoid Bukit Asam.    Thailand: Oil & Gas and NBFCs in the right spot. We think recent marketstrength has been mainly flow-driven and are more cautious on the index. Butthe market underappreciates the opportunity in non-ethylene petrochemicals,where inexpensive IVL is in a sweet spot. NBFCs will continue to growstrongly in the low interest rate environment and MTLS stands out in terms ofreceivable growth. We recently turned more positive on Thai banks’ long-termprospects driven by a government-led digital transformation (top pick: SCB).    Outlook    Our AxJ team is UW all ASEAN markets save for the Philippines. But we’dflag attractive bottom-up opportunities across all five markets, as per above.

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