In 1Q2019, Consumer Staples was the second-best performing sector with +13.9% total return, reversing the -2.9% total return in calendar year 2018. It was also amongst the top net buy sectors for the quarter, garnering total institutional inflows of S$61.5 million.
The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion, and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore.
Among the 20, the 5 best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They averaged a YTD total return of +33.8%.
Second-Best Performing Sector in 1Q19
In the first quarter of 2019, Consumer Staples was the second-best performing sector on SGX with a total return of +13.9%, after Information Technology’s +28.6% total return. Consumer Staples’ strong performance in 1Q19 also reverses the -2.9% total return it generated in calendar year 2018.
Consumer Staples was also among the top net buy sectors for the January-March quarter, garnering total institutional inflows of S$61.5 million, according to SGX data. This comprised inflows of S$50.3 million, S$9.0 million, and S$2.2 million for January, February and March 2019 respectively.
Geographical Diversity
The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore.
In the 2019 year-to-date, these 20 largest Consumer Staples stocks have averaged a total return of +12.9%, bringing their one-year and three-year total returns to -1.4% and +22.6% respectively. They have also averaged a price-earnings ratio of 24.5x and a dividend indicated yield of 2.5%.
Among the 20, the 5 best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They have averaged a YTD total return of +33.8%.
Note that earlier this month, Jakarta Stock Exchange-listed PT Indofood Sukses Makmur Tbk, controlled by Indonesian tycoon Anthoni Salim, offered S$0.28 per share to take Indofood Agri Resources private.
The table below details the 20 largest Consumer Staples stocks on SGX, sorted by YTD total return.
| Name | SGX Code |
Market Cap S$m |
Total Return YTD % |
Total Return 1 Yr % |
Total Return 3 Yr % |
P/E (x) |
Dividend Ind Yield % |
|---|---|---|---|---|---|---|---|
| INDOFOOD AGRI RESOURCES* | 5JS | 391 | 46.6 | -10.5 | -49.0 | NA | 2.5 |
| QAF LTD | Q01 | 492 | 44.4 | -14.4 | -9.3 | 59.5 | 5.9 |
| THAI BEVERAGE PCL | Y92 | 20,719 | 38.0 | 6.1 | 27.9 | 21.2 | 2.0 |
| GOLDEN AGRI-RESOURCES | E5H | 3,757 | 20.4 | -15.4 | -26.9 | NA | 2.0 |
| FIRST RESOURCES | EB5 | 2,931 | 19.5 | 15.5 | 0.8 | 17.9 | 1.9 |
| WILMAR INTL | F34 | 23,034 | 17.3 | 17.8 | 11.1 | 14.8 | 2.9 |
| BUMITAMA AGRI | P8Z | 1,251 | 16.9 | 4.8 | -6.8 | 12.0 | 3.8 |
| OLAM INTL | O32 | 6,094 | 15.8 | -13.7 | 22.7 | 21.0 | 3.9 |
| YEO HIAP SENG | Y03 | 568 | 12.0 | -11.7 | -22.1 | 47.3 | 2.0 |
| MEWAH INTL | MV4 | 420 | 10.0 | -4.7 | 2.3 | 20.6 | 2.4 |
| DEL MONTE PACIFIC | D03 | 276 | 8.8 | -39.6 | -54.0 | 11.9 | NA |
| FOOD EMPIRE HOLDINGS | F03 | 291 | 6.7 | -15.1 | 126.4 | 12.2 | 1.2 |
| JB FOODS | BEW | 188 | 4.8 | 13.7 | 224.7 | 5.1 | 3.3 |
| OLD CHANG KEE | 5ML | 96 | 4.6 | 8.8 | 41.0 | 18.6 | 3.8 |
| DELFI LTD | P34 | 856 | 4.5 | -6.3 | -41.6 | 29.8 | 1.6 |
| BREADTALK GROUP | CTN | 476 | 3.7 | -10.1 | 79.3 | 39.2 | 1.8 |
| FRASER & NEAVE | F99 | 4,131 | 3.6 | -2.1 | 64.3 | 19.9 | 2.5 |
| SHENG SIONG GROUP | OV8 | 1,579 | -1.9 | 5.3 | 32.9 | 22.1 | 3.3 |
| JAPFA LTD | UD2 | 1,287 | -5.5 | 43.8 | 2.6 | 8.9 | 0.7 |
| DAIRY FARM INTL | D01 | 14,320 | -11.4 | -0.5 | 26.1 | 116.3 | 2.7 |
| Average | 12.9 | -1.4 | 22.6 | 24.9 | 2.5 |
Source: Bloomberg & StockFacts (data as of 22 April 2019)
* Privatisation offer announced by parent.
SGX lists more than 140 consumer stocks with a combined market capitalisation of over S$135 billion. More than 40 of these belong to the Consumer Staples sector, while the remainder are classified under the Consumer Discretionary segment. The retail and distribution of packaged foods and meats, production of agricultural goods, as well as beverage producers like soft drink makers and breweries, fall under the Consumer Staples sector.
Defensive Nature
Given the backdrop of slower global growth and increased macro risks, analysts have recommended investors to focus on sectors with robust balance sheets, stable earnings and decent valuations. In a report published earlier this month, RHB Research maintained its overweight rating on the Consumer space, pointing to “pockets of opportunities” in companies with strong attributes. “We continue to favour players with market exposure to the region that are likely to benefit from stronger GDP growth and higher domestic consumption,” the brokerage added.
Earlier this month, the International Monetary Fund (IMF) cut its global growth outlook to the lowest rate since the Global Financial Crisis, forecasting 3.3% growth in 2019, down from a 3.5% projection made in January. In its latest World Economic Outlook report, the agency cited downside risks from ongoing global trade tensions, as well as a slowdown in several major economies, including the Eurozone, Latin America, the US and the UK.
