In 1Q19, IT was the best-performing sector on SGX with a total return of 28.6%, after registering a total return of -16.3% in calendar year 2018. It was also among the top net buy sectors for the quarter, garnering total institutional inflow of S$100.5 million, the second-highest inflow after REITs (+S$242.6 million).
The 20 largest IT stocks on SGX have a combined market cap of nearly S$16 billion, and averaged a total return of +21.7% in the 2019 YTD. They also averaged a PE ratio of 13.6x, ROE of 13.8% and dividend indicated yield of 3.5%.
Among the 20, the 5 best performers in the YTD were: Hi-P (+65.0%), TPV Tech (+46.2%), Innotek (+41.0%), Venture (+37.9%), and CSE Global (+36.8%). The 5 have averaged a YTD total return of +45.4%, bringing their 1Y and 3Y total returns to +11.9% and +194.3% respectively.
Sector Draws Institutional Interest
In the first quarter of 2019, Information Technology (IT) was the best-performing sector on SGX with a total return of 28.6%, reversing the -16.3% total return in calendar year 2018.
IT was also among the top net buy sectors for the January-March quarter, garnering total institutional inflow of S$100.5 million, according to SGX data. This comprised S$33.1 million, S$45.7 million, and S$21.7 million for the months of January, February and March 2019 respectively. IT received the second-highest inflows in the quarter after REITs, which garnered S$242.6 million.
March Electronics Manufacturing Activity
The Purchasing Managers' Index (PMI) for Singapore's key electronics sector edged higher in March to 49.8 from 49.5 in February, but remains in contraction – below the expansionary level of 50 – for the fifth consecutive month.
However, the overall manufacturing PMI – a key barometer of economic activity in the broader manufacturing industry – stood at 50.8 in March, up 0.4 percentage point from February. March’s reading marks the index’s 31st straight month of expansion.
The Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the index by surveying around 150 industrial companies, attributed the stronger performance in March to faster growth in new orders, factory output and inventory levels.
Best-Performing IT Stocks in YTD
The 20 largest capitalised IT stocks on SGX have a combined market cap of nearly S$16 billion. In the 2019 year-to-date, they have averaged a total return of +21.7%, bringing their one-year and three-year total returns to -4.1% and +171.5% respectively.
These 20 largest IT stocks also averaged a price-earnings ratio of 13.6x, a Return on Equity (ROE) of 13.8% and a dividend indicated yield of 3.5%.
Among the 20, the 5 best performers in the YTD were: Hi-P International (+65.0%), TPV Technology (+46.2%), Innotek Ltd (+41.0%), Venture Corp (+37.9%), and CSE Global (+36.8%).
These 5 stocks – which are focused on the businesses of consumer electronics, electronics components, office automation, industrial machinery and electronics manufacturing services – have averaged a YTD total return of +45.4%, bringing their one-year and three-year total returns to +11.9% and +194.3% respectively.
The table below details the 20 largest IT stocks on SGX, sorted by YTD total return.
| Name | SGX Code |
Market Cap S$m |
Total Return YTD % |
Total Return 1 Yr % |
Total Return 3 Yr % |
P/E (x) |
Dividend Ind Yield % |
ROE % |
|---|---|---|---|---|---|---|---|---|
| HI-P INTL | H17 | 1,170 | 65.0 | -27.3 | 343.2 | 11.7 | 3.4 | 18.5 |
| TPV TECHNOLOGY | T18 | 669 | 46.2 | 45.5 | 70.2 | 23.0 | 0.6 | 1.4 |
| INNOTEK LTD | M14 | 134 | 41.0 | 41.2 | 354.0 | 6.6 | 1.7 | 14.3 |
| VENTURE CORP | V03 | 5,542 | 37.9 | -30.4 | 164.7 | 13.8 | 3.6 | 16.4 |
| CSE GLOBAL | 544 | 264 | 36.8 | 30.5 | 39.4 | 13.3 | 5.3 | 11.7 |
| CHUAN HUP | C33 | 343 | 34.5 | 27.4 | 55.5 | 28.5 | 2.7 | 3.1 |
| AEM HOLDINGS | AWX | 293 | 30.9 | -36.4 | 1414.9 | 8.8 | 3.2 | 45.5 |
| UMS HOLDINGS | 558 | 386 | 26.3 | -33.9 | 75.8 | 9.0 | 6.3 | 19.4 |
| PCI LTD | P19 | 263 | 24.5 | 69.1 | 271.3 | 12.1 | 2.3 | 16.9 |
| SILVERLAKE AXIS | 5CP | 1,349 | 23.8 | 0.1 | 3.1 | 21.2 | 2.6 | 29.1 |
| MEMTECH INTL | BOL | 134 | 22.3 | -34.6 | 50.4 | 10.4 | 3.1 | 7.6 |
| NERA TELECOM | N01 | 114 | 16.7 | -10.8 | -15.9 | 14.7 | 7.9 | 11.4 |
| CREATIVE TECH | C76 | 320 | 12.1 | -25.7 | 302.8 | 19.8 | NA | 11.1 |
| ELEC & ELTEK | E16 | 363 | 9.5 | -3.8 | 75.3 | 11.0 | NA | 6.2 |
| NETLINK NBN TRUST | CJLU | 3,254 | 9.2 | 10.6 | NA | 1.0* | 4.9 | 2.4 |
| MICRO-MECHANICS | 5DD | 238 | 4.3 | -9.4 | 158.1 | 15.1 | 5.3 | 27.1 |
| VALUETRONICS LTD | BN2 | 295 | 3.0 | -25.0 | 82.2 | 8.5 | 5.2 | 18.9 |
| MDR LTD | A27 | 130 | 0.0 | -28.7 | -44.1 | 20.0 | 1.6 | 2.7 |
| SUNNINGDALE TECH | BHQ | 254 | -4.2 | -18.5 | 21.4 | 8.6 | 5.6 | 8.0 |
| GP INDUSTRIES | G20 | 283 | -4.9 | -21.7 | 7.8 | 14.3 | 5.1 | 5.4 |
| Average | 21.7 | -4.1 | 171.5 | 13.6 | 3.5 | 13.8 |
Source: Bloomberg & StockFacts (data as of 18 April 2019)
* Note P/B ratio used instead of P/E for NetLink as more relevant for business trusts
