Six of the seven least performing STI stocks of 2018 were amongst the STI’s 10 strongest stocks in the 2019 year through to 23 Jan. Of these six STI stocks, the two that have been the strongest over the three weeks were Genting and Thai Bev. The two stocks were also amongst the five STI stocks subject to the most net capital inflow by institutional investors from 31 Dec to 18 Jan.
Frasers Centrepoint Trust, Keppel REIT, Mapletree Logistics Trust and Soilbuild Business Space REIT will announce their results today. The rest of the S-REITs and Business Trusts are expected to release their results over the next few weeks. The iEdge S-REIT Index’s 35 constituents, which have a combined market capitalisation of more than S$83 billion, have averaged a total return of 4.5% in the 2019 YTD. This brings their 1Y and 3Y total returns to 0.7% and 46.9% respectively.
Last week, SPH kick-started the latest quarterly reporting season with the release of its first quarter fiscal results for 2019, ended 30 November 2018. The remaining constituents of the benchmark STI are expected to report their latest quarterly or full-year results in the coming weeks. The STI has generated total returns of -6.5% and 5.2% in 2018 and in the 2019 YTD respectively. With a combined market capitalisation of over S$550 billion, the 30 constituents of the index have averaged Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios of 16.6x and 1.9x respectively.
Amidst a challenging market environment, S-REITs were among the best-performing sectors on SGX in November and December 2018, registering total returns of 2.3% and 0.3% respectively. Most of those gains appear to have been extended in the first two weeks of 2019. Analysts had noted revived investor interest in S-REITs late last year, driven by a flight to safety amidst rising risk-aversion.
Singapore’s healthcare sector is typically viewed as defensive and poised to enjoy multi-year growth prospects. Between July and Dec 2018, the sector saw 6 consecutive months of net inflows by institutional investors, following increased risk aversion on the back of higher market volatility and persistent US-China trade tensions. In 2018, the five best-performing constituents of the iEdge SG All Healthcare Index were: Top Glove (+40.6%), Camsing Healthcare (+19.5%), Aoxin Q & M (+10.5%), Pharmesis (+8.7%), and Riverstone (+7.9%).
In 2018, SGX’s Industrials Sector was the 2nd best-performing segment with a market cap-weighted average total return of 1.0%. SGX lists more than 200 Industrials stocks. The 10 best performers with a market cap of over S$200 million have averaged a 2018 total return of +12.7%. Among the 10, the 3 best performers were Cityneon (+39.0%), Keppel T&T (+21.2%) and Jardine Matheson (+19.8%). The trio averaged a 2018 total return of 26.7%. Looking broadly at the Industrials Sector, the three best performers over the past year were small-capped stocks below the S$100 million market cap. They were: Far East Group (+140.9%), KTL Global (+132.0%) and MMP Resources (+75.0%). The trio averaged a 2018 total return of 116%.
For the 10 years ending 2018, the STI generated annualised total returns of 9.2%, which were one-fifth higher than the regional Asia Pacific benchmark, and in-line with the FTSE ASEAN 40 Index. The current STI constituents that generated the strongest returns over the period were Venture, SATS, Jardine Cycle & Carriage. The three stocks represent different industries, and averaged similar annualised total returns of 18.5%
In addition to joining the STI in 2018, both Venture and Dairy Farm have seen surges in trading turnover in 2018. For the 12M ending 30 Nov, Venture's average daily trading turnover tripled to S$10.4M, compared to S$3.5M for the previous 12M. 3 of the 5 STI Reserve Stocks also saw turnover surge, with Mapletree Log Trust trading turnover up by 85% compared to the preceding 12M, Mapletree Ind Trust's trading turnover up 51% and Suntec REIT's trading turnover up more than a third.
Singapore's Electronics Sector PMI posted a drop of 0.6 point in November from the previous month to record contraction at 49.9. This was the first contraction record by the Singapore Institute of Purchasing and Materials Management (SIPMM) after the sector recorded its 27th month of consecutive expansion in October. The Technology Sector is deemed to be highly cyclical. The 25 largest Tech stocks in Singapore have generated median 16% declines in 2018 YTD, following median 2017 total returns of 72%.
The 5 largest and best-performing consumer stocks in the 2018 YTD were: Best World (+94.8%), Japfa (+44.6%), Sri Trang (+36.7%), Sheng Siong (+21.7%), and Dairy Farm (+20.4%). These 5 stocks have averaged a YTD total return of 43.6%, bringing their 3Y and 5Y total returns to 414.5% and 808.0% respectively. In the month of November, SGX saw a net institutional inflows of S$212.5 million – the first net inflow in seven months. Consumer Staples and Consumer Discretionary were among the top net buy sectors, while top institutional net buy stocks were Best World, Genting Singapore, and Jardine Cycle & Carriage.
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