SGX’s IT Sector was the 2nd-best performing segment in January, generating a total return of +13.5% and reversing a negative return of 4.0% in December. It was also among the top net buy sectors last month, garnering institutional inflows of S$33.1 million.
The 10 largest IT stocks on SGX have a combined market cap of over S$12 billion, and span sub-segments ranging from Computer Hardware, Electronic Components and Industrial Machinery to Software Services and Specialty Finance.
Among the 10, 5 of the best performers in the 2019 YTD were: Creative Tech (+46.2%), Chuan Hup (+25.5%), Silverlake Axis (+22.9%), UMS (+20.2%), and Venture (+18.2%). They averaged a YTD total return of 26.6%.
Second Best-Performing Sector in January
Singapore’s Information Technology (IT) Sector was the second-best performing segment in January 2019, generating a total return of +13.5% after the Utilities sector’s +14.5% total return, and reversing December’s negative total return of 4.0%.
The IT Sector was also among the top net buy sectors in January, after REITs, Consumer Staples, and Consumer Discretionary, garnering institutional inflows of S$33.1 million. The sector’s net inflow also marks a reversal of four straight months of net selling by institutional investors between September and December last year.
Slower Growth but Bright Spots Remain
The Purchasing Managers' Index (PMI) for Singapore's key electronics sector contracted for a third straight month in January, with its PMI sub-index slipping 0.2 point to 49.6. The broader manufacturing economy, however, continued to expand, as indicated by a reading of 50 and above, but the level eased 0.4 point to 50.7 from the previous month. This was its lowest reading since December 2016 and its fifth consecutive month of decline.
The electronics sector’s weak reading was attributed to a first-time contraction in new orders, new exports and employment, as well as a second-time contraction in factory output, said the Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the data.
Despite the weak data, SIPMM said anecdotal evidence suggests electronics manufacturers remain "cautiously optimistic of improved prospects".
Although the global electronics cycle is easing from its peak, Singapore’s electronics sector still retains some bright spots, government officials have pointed out in recent months.
The Economic Development Board’s (EDB) director for semiconductors Pee Beng Kong told local media in December that utilisation of semiconductor manufacturing capacity in Singapore remains high, and the electronics and semiconductor sectors have continued to expand as the city-state’s manufacturing pillars.
Output in both sectors have risen by a compound annual growth rate (CAGR) of about 5% and 8% respectively between 2008 and 2017, raising their share of manufacturing output to 38% from 27% and to 27% from 15% respectively over the period, he added.
Other growth boosters in the cluster include greater adoption of digital and smart technologies, such as the rapidly expanding digital or e-payments space, as well as cyber security and financial technology services, the Monetary Authority of Singapore's (MAS) said in its half-yearly macroeconomic review last October.
SGX’s Largest, Best-Performing IT Stocks
The 10 largest IT stocks on SGX have a combined market capitalisation of over S$12 billion, and span sub-segments ranging from Computer Hardware, Electronic Components and Industrial Machinery to Software Services and Specialty Finance.
Among these 10 stocks, five of the best performers in the 2019 year-to-date were: Creative Technology (+46.2%), Chuan Hup (+25.5%), Silverlake Axis (+22.9%), UMS Holdings (+20.2%), and Venture Corp (+18.2%). They have averaged a YTD total return of +26.6%, bringing their one-year, three-year and five-year total returns to +63.4%, +146.1% and +125.1% respectively. These 10 stocks also averaged a dividend yield of 4.2%.
The tables below detail the 10 largest IT stocks on SGX, sorted by market cap.
| Name | SGX Code |
Market Cap (in S$M) |
Total Return YTD % |
1Y Total Return (%) |
3Y Total Return (%) |
5Y Total Return (%) |
|---|---|---|---|---|---|---|
| VENTURE CORP | V03 | 4,745.4 | 18.2 | -23.1 | 141.3 | 195.5 |
| NETLINK NBN TRUST | CJLU | 3,137.1 | 5.2 | 4.1 | NA | NA |
| SILVERLAKE AXIS | 5CP | 1,347.6 | 22.9 | -2.5 | 9.3 | -10.9 |
| HI-P INTL | H17 | 824.1 | 16.4 | -45.6 | 205.1 | 138.2 |
| CREATIVE TECH | C76 | 416.9 | 46.2 | 357.9 | 422.6 | 186.8 |
| UMS HOLDINGS | 558 | 367.5 | 20.2 | -28.5 | 109.9 | 173.5 |
| ELEC & ELTEK | E16 | 360.2 | 8.7 | -4.1 | 137.8 | 15.2 |
| VALUETRONICS | BN2 | 320.7 | 12.1 | -14.9 | 148.5 | 288.7 |
| CHUAN HUP | C33 | 320.3 | 25.5 | 13.1 | 47.6 | 80.5 |
| SUNNINGDALE TECH | BHQ | 299.3 | 9.0 | -8.7 | 123.6 | 155.5 |
| Average | 12,138.8 | 18.4 | 24.8 | 134.6 | 122.3 |
| Name | SGX Code |
Market Cap (in S$M) |
Div Yld (%) |
P/E (x) |
P/B (x) |
ROE (%) |
|---|---|---|---|---|---|---|
| VENTURE CORP | V03 | 4,745.4 | 4.9 | 13.2 | 2.1 | 19.0 |
| NETLINK NBN TRUST | CJLU | 3,137.1 | 5.4 | 47.1 | 1.0 | 2.1 |
| SILVERLAKE AXIS | 5CP | 1,347.6 | 2.3 | 24.9 | 7.4 | 19.4 |
| HI-P INTL | H17 | 824.1 | 4.9 | 7.2 | 1.6 | 22.9 |
| CREATIVE TECH | C76 | 416.9 | NA | 25.3 | 2.7 | 11.3 |
| UMS HOLDINGS | 558 | 367.5 | 6.6 | 7.5 | 1.6 | 22.6 |
| ELEC & ELTEK | E16 | 360.2 | 5.7 | 8.1 | 0.7 | 8.4 |
| VALUETRONICS | BN2 | 320.7 | 4.7 | 9.2 | 1.7 | 18.9 |
| CHUAN HUP | C33 | 320.3 | 2.9 | 18.9 | 0.8 | 5.2 |
| SUNNINGDALE TECH | BHQ | 299.3 | 4.8 | 11.0 | 0.8 | 7.4 |
| Average | 4.2 | 17.2 | 2.0 | 13.7 |
Source: StockFacts & Bloomberg (data as of 13 Feb 2019)
