SGX Market Updates

3 SGX Largest, Best-Performing Oil & Gas Stocks Average 21% YTD Return


PUBLISHED ON |

12 March 2019

  • In the 2019 YTD, the 3 largest capitalised, best-performing constituents of the iEdge SG Oil & Gas Index were: Rex International (+32.7%), China Aviation Oil (+20.8%) and GSS Energy (+9.9%). They have averaged a total return of +21.1% in the YTD, bringing their 1Y and 3Y total returns to -4.5% and 34.9% respectively.

  • Share prices of most Index constituents have also recovered from their 12M troughs, in line with recent crude gains. The 3 largest capitalised Index constituents that have seen the strongest price rebound from their 52W lows were: Rex Rex International (+82.5%), Vallianz (+26.7%), and China Aviation Oil (+23.1%).

  • Oil prices have been well-supported this year following continued production cutbacks by OPEC and its partners, who have pledged to cut 1.2 million barrels per day since the start of 2019. WTI crude has climbed more than 25% for the year through mid-February.




The iEdge SG Oil & Gas Index is a free-float, market capitalisation-weighted index that measures the performance of listed oil and gas (O&G) companies in Singapore. The 14 constituents in the Index have a combined market capitalisation of about S$2 billion.

Singapore is a focal point for the oil and gas industry as the city-state is Asia’s largest physical oil trading hub and price discovery centre. The 14 constituents of the iEdge SG Oil & Gas Index represent a microcosm of upstream and downstream oil and gas businesses, including companies involved in the exploration, production, storage and transport of oil and gas.



YTD Gains in WTI

WTI crude has climbed more than 25% for the year through mid-February as the Organization of Petroleum Exporting Countries (OPEC) and its partners curbed output, and US sanctions on Iran and Venezuela tightened supplies. Oil prices gained another 1% on Monday, buoyed by comments from Saudi Energy Minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June. Prices have been supported this year following continued output cuts by OPEC and its partners, who have pledged to cut 1.2 million barrels per day (bpd) since the start of 2019. The group will meet on 17-18 April, with another meeting scheduled for 25-26 June, to discuss supply policy.

WTI crude Price



Largest, Best-Performing Index Constituents in YTD

In the 2019 year-to-date, the 3 largest capitalised, best-performing constituents of the iEdge Oil & Gas Index were Rex International (+32.7%), China Aviation Oil (+20.8%) and GSS Energy (+9.9%). They have averaged a total return of +21.1% in the year thus far, bringing their one-year and three-year total returns to -4.5% and 34.9% respectively.

The table below details the 10 largest constituents of the iEdge Oil & Gas Index, sorted by YTD total return.

Name SGX
Code
Market
Cap
S$m
Total
Return
YTD
(%)
Total
Return
1Y
(%)
Total
Return
3Y
(%)
P/B
(x)
REX INTL 5WH 90 32.7 40.4 -23.2 0.6
CHINA AVIATION OIL G92 1,110 20.8 -11.7 94.4 1.1
GSS ENERGY LTD 41F 49 9.9 -42.2 33.3 1.1
SHS HOLDINGS 566 131 1.6 -10.4 -19.5 0.7
MERMAID MARITIME DU4 117 -8.0 -45.6 -29.2 0.3
AUSGROUP LTD 5GJ 88 -12.5 -41.1 -77.9 0.9
NEW SILKROUTES GROUP BMT 49 -14.8 -37.0 -47.1 0.7
NORDIC GROUP MR7 130 -20.0 -41.5 95.6 1.6
KRISENERGY LTD SK3 81 -30.1 -44.0 -76.8 0.5
VALLIANZ HOLDING WPC 112 -36.7 -51.3 -86.9 0.3

Source: StockFacts & Bloomberg (data as of 8 March 2019)



The stock prices of most Index constituents have also recovered from their 12-month troughs, in line with recent gains in crude. The three largest capitalised Index constituents that have seen the strongest price rebound from their 52-week lows were: Rex International (+82.5%), Vallianz Holdings (+26.7%), and China Aviation Oil (+23.1%). These 3 players averaged a 44.1% gain from their respective 12-month lows. 

The table below details the 10 largest constituents of the iEdge Oil & Gas Index, sorted by percentage price change from 52-week lows.

Name SGX
Code
Market
Cap
S$m
Last
Price
(S$)
52W Low
Price
(S$)
52W Low
Date
% Chg
vs
52W Low
REX INTL 5WH 90 0.073 0.04 07/18/2018 82.5
VALLIANZ HOLDINGS WPC 112 0.190 0.15 10/29/2018 26.7
CHINA AVIATION OIL G92 1,110 1.280 1.04 12/26/2018 23.1
GSS ENERGY LTD 41F 49 0.100 0.09 10/30/2018 11.1
NEW SILKROUTES GROUP BMT 49 0.230 0.21 10/26/2018 9.5
SHS HOLDINGS 566 131 0.191 0.18 02/20/2019 6.1
NORDIC GROUP MR7 130 0.320 0.31 03/01/2019 3.2
KRISENERGY LTD SK3 81 0.051 0.05 03/08/2019 2.0
MERMAID MARITIME DU4 117 0.080 0.08 03/08/2019 0.0
AUSGROUP LTD 5GJ 88 0.028 0.03 03/08/2019 -6.7

Source: StockFacts & Bloomberg (data as of 8 March 2019)



Market and Exploration Risks

Oil exploration is a risky and capital-intensive investment because there are no guarantees companies will find anything of value. Other risks include financial, technical risks associated with development and production, the impact on the local environment, as well as political and government regulations. For a detailed breakdown of the issues, considerations and risks involved in investing in the Upstream Oil & Gas Industry, click here.







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