SGX Market Updates

SGX Market Updates - Recent Sector Moves & Turnarounds


PUBLISHED ON |

06 June 2017

  • Over the first five months of 2017 Information Technology (IT), Materials and Real Estate Management & Development Sectors ranked as the best three performing Sectors. IT and Materials had also ranked amongst the three best performing Sectors in 2016.

  • The Real Estate Management & Development Sector saw a turnaround performance in the first five months of 2017, after ending 2016 as one of the three least performing Sectors. The YTD strength of the Real Estate Management & Development Sector coincided with expectations and announced reductions of some property market cooling measures.

  • Further underlying the reversal of fortune for the Real Estate Sector, Yanlord Land Group joins the STI Reserve List effective 19 June. The STI Reserve List will be made up of Suntec REIT, Mapletree Commercial Trust, Sembcorp Marine, Keppel REIT and Yanlord Land Group.




Over the first five months of 2017, the three strongest sectors in Singapore have been Information Technology (IT), Materials and Real Estate Management & Development. All three of these Sectors are construed to be cyclical by MSCI, and of the three, Real Estate Management & Development Sector has generated the most swings over the past 12 months.

The indicative Sector returns are illustrated below.


First 5 months of 2017 - Sector Total Returns (%)

2016 - Sector Total Returns (%)


Source: SGX StockFacts & Bloomberg.
Indicative GICS ® Sector performance for first five months of 2017 is weighed to market cap at end of May 2017, with 2016 returns weighed as of 30 December 2016. Returns in SGD and dividend inclusive.



While the Real Estate Management & Development Sector was the third least performing Sector in 2016, the reverse was true in 2017. For the first quarter of 2017, the Sector was the third best performing Sector, generating an indicative total return of 21%. This coincided with expectations and the subsequent announcement on 10 March that the Singapore Government would ease some of its property market cooling measures. More details on the calibrated adjustments to the Seller’s Stamp Duty and Total Debt Servicing Ratio framework can be found here.

The five largest capitalised stocks of the IT, Materials and Real Estate Management & Development Sectors and respective market capitalisations are tabled below. To see more details on each stock click on the link.


Information Technology
Venture Corp (S$3.6B)
Silverlake Axis (S$1.4B)
TPV Technology (S$0.8B)
Hi-P Intl (S$0.8B)
UMS Holdings (S$0.5B)

Materials
Straits Trading Co (S$1.0B)
NSL/Singapore (S$0.5B)
Midas Holdings (S$0.4B)
China Sunsine Chemical Holdings (S$0.4B)
Kingboard Copper Foil Holdings(S$0.3B)

Real Estate Management & Development
Hongkong Land Holdings (S$24.7B)
CapitaLand (S$15.4B)
Global Logistic Properties (S$13.7B)
City Developments (S$9.8B)
UOL Group (S$5.7B)

Source: SGX StockFacts



Sector Swings of the Past 12 Months

Over the past 12 months there were a total of 24 instances where a Sector returned over 4.5% month-on-month (MOM). Conversely, there were just three occasions where a Sector a declined more than 4.5% MOM. This is based on the market capitalisation weighted total returns of the GICS® Sector categorisations used in SGX StockFacts (as illustrated in the table below).

Combined market capitalisation weighted gains of the best performing Sector for each of the past 12 months was 85%.

During those 12 months, Information Technology was the best performing Sector as many as five times, with Energy, Industrials and Banks the best performers twice, and Telecommunications Services once – back in June 2016. At the same time the combined market capitalisation weighted gains of the least performing Sector for each of the past 12 months was a decline of 39% with Telecommunications Services the least performer four times.

The monthly Sector performances are tabled below. As illustrated, the last 12 months began with Telecommunication Services being the best performing Sector in June 2016 and ended with Banks being the best Sector Performer in May 2017. As noted in the recent SGX My Gateway report, the three banks also reported 1QFY17 results in May.



Indicative Monthly Sector Returns



Source: SGX, SGX StockFacts & Bloomberg. For monthly data the Indicative GICS ® Sector performance is weighed to market cap at each month end, in SGD and dividend inclusive.



These diverse Sector performances illustrated above exemplify how Sector rotation provided the opportunity for more risk and return within the Singapore market over the past 12 months. Note that while the overall Sector may gain, there is potential for mixed returns among the Sector leaders. Hence investors may choose more than one stock of the Sector when rotating money from one Sector to another.

For a list of all the relevant stocks that make up these Sectors, investors can generate detailed lists on SGX StockFacts (click here).







This article is provided by SGX My Gateway.



SGX My Gateway

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