SGX Market Updates

STI Clocks 9% Annualised Return Amidst 10 Years of Global Challenges


PUBLISHED ON |

03 January 2019

  • 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%.

  • Over the 10 years, global day-to-day market cues have gradually shifted from Central Banks and coordinated expansionary monetary policy to G20 Leaders and their initiatives to reshape economies and address political trends.




Following the financial crisis of 2008, global economic growth took a dip in 2009, recovered in 2010, and has kept above 2.5% for every year since, based on World Bank statistics. Over the 10 years big market drivers have gradually moved from Central Bank’s expansionary and extraordinary measures to stimulate economic growth, to Political Leaders reassessing international paradigms in order to restructure their trade-related growth.



STI Returns Since 2008

Over the 10 years, the Straits Times Index (“STI”) has generated an annualised total return of 9.2%, with all the current constituents of the Index that have been listed for the duration generating positive total returns.

On a non-annualised basis the STI’s total return was 140.5% over the period which spanned the end of 2008 to the end of 2018.  Without reinvesting dividends the STI ‘s annualised return over the 10 years would have been 5.7%. Dividends have played a key role in these annualised returns, and following the 6.5% decline in total return for the STI in 2018, the 30 constituents currently average an indicative dividend yield of 3.8%.

The STI’s comparative total returns for the 10 year period are illustrated in the chart below.


10Y Annualised Total Return

Source: SGX StockFacts, Bloomberg, Thomson Reuters (Data spans 31 Dec 2008 to 31 Dec 2018).



STI’s Strongest Stocks Since 2008

As noted above the STI has generated an annualised total return of 9.2% over the 10 year period ending 2018. Over the period, the strongest of the current STI stocks were Venture Corp, SATS, Jardine Cycle & Carriage, CapitaLand Commercial Trust and Thai Beverage PCL.

These five stocks generated similar annualised total returns spanning 19.1% for Venture Corp to 16.6% for Thai Beverage PCL. Of the five stocks, just the one stock, Jardine Cycle and Carriage, was a STI constituent for the full 10 year period. The remaining four stocks joined the STI over the past 10 years. The five least performing STI stocks that have been listed for the full 10 years averaged annualised total returns of 3.3%.

The full list of STI constituents are tabled below. 

STI Constituent SGX
Code
Market Cap
S$Bn
2018
Total Return
%
10 Year
Annualised
Total Return
%
Indicative
Dividend Yield
JARDINE MATHESON J36 69.9 19.8 16.5 2.3%
DBS GROUP HLDGS D05 60.4 1.2 15.2 5.1%
JARDINE STRATEGIC J37 55.5 -4.6 13.9 0.9%
OCBC BANK O39 47.9 -6.2 12.7 3.5%
SINGAPORE TELECOMMUNICATIONS Z74 47.8 -13.2 6.6 6.1%
UNITED OVERSEAS BANK U11 40.9 -3.3 10.6 3.9%
HONGKONG LAND H78 20.2 -6.1 12.4 3.1%
WILMAR INTERNATIONAL F34 19.7 4.3 3.1 3.4%
DAIRY FARM INTERNATIONAL D01 16.7 20.4 10.0 2.3%
THAI BEVERAGE Y92 15.3 -31.7 16.6 2.7%
JARDINE CYCLE & CARRIAGE C07 14.0 -10.0 18.0 3.4%
CAPITALAND LTD C31 12.9 -9.0 4.5 3.9%
GENTING SINGAPORE G13 11.7 -23.2 9.8 3.6%
SINGAPORE AIRLINES C6L 11.2 -8.2 3.0 4.1%
SINGAP TECH ENG S63 10.9 11.8 8.8 4.3%
KEPPEL CORP BN4 10.7 -16.4 9.3 4.1%
CAPITALAND MALL C38U 8.3 12.7 11.5 5.0%
ASCENDAS REIT A17U 8.0 0.3 13.8 6.2%
SINGAPORE EXCHANGE S68 7.7 0.4 7.5 4.5%
CITY DEVELOPMENTS C09 7.4 -33.8 4.0 1.0%
CAPITALAND COMMERCIAL TRUST C61U 6.6 -5.0 17.5 4.8%
UOL GROUP LTD U14 5.2 -28.8 13.7 2.9%
SATS LTD S58 5.2 -7.2 18.4 3.9%
YANGZIJIANG SHIPBUILDING BS6 4.9 -11.4 15.1 3.5%
COMFORTDELGRO CO C52 4.7 13.7 7.8 4.9%
SEMBCORP INDUSTRIES U96 4.5 -15.0 4.2 1.6%
VENTURE CORP LTD V03 4.0 -29.1 19.1 5.8%
SINGAPORE PRESS HLG T39 3.8 -6.9 3.3 3.9%
GOLDEN AGRI-RESOURCES E5H 3.1 -33.6 3.2 0.5%
HUTCHISON PORT HOLDINGS NS8U 2.9 -34.7 N/A 10.2%
Average -8.4 10.7 3.8%



While the STI generated a 6.5% decline in total return in 2018, the non-weighted average return of the 30 STI constituents for the year was a decline of 8.4%. The STI’s five strongest stocks in 2018 were Dairy Farm International, Jardine Matheson, ComfortDelGro Corp, CapitaLand Mall and Singapore Tech Engineering with average total returns of 15.7%.







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