While global trade tensions and growth concerns abated in the month of July, the past six weeks has seen a more challenging outlook with potential growth downgrades impacting global equity and bond markets.
The STI generated a decline of 4.0% in total return in the September quarter-to-date, which has trimmed its 2019 year to date total return to 6.1%. While industrial stocks weighed on the STI through August, multiple STI stocks & STI Reserve stocks generated gains.
The 10 largest stocks by market cap that added to their 1H19 gains in the quarter-to-date are all STI or STI Reserve List stocks – they were Wilmar, Thai Beverage, CapitaLand, CapitaLand Mall Trust, Ascendas REIT, SGX, City Developments, CapitaLand Commercial Trust, Mapletree Commercial Trust & Suntec REIT.
While global trade tensions and growth concerns abated in the month of July, the past six weeks has seen a more challenging outlook with potential growth downgrades impacting global equity and bond markets. At Jackson Hole, Federal Reserve President Jerome Powell noted that “trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States”.
Impact of Lower Yielding Treasuries
While the Federal Reserve cut interest rates by 25 bps on July 31, following nine successive hikes, yields on US treasuries have fallen significantly this year, with US two year yields falling from 2.49% at the end of 2018, to 1.54% on Friday, and US 10 year yields falling from 2.68% at the end of 2018, to 1.56% on Friday.
The lower interest rates have had a clear impact on banks and real estate stocks, with the latter outpacing the former.
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The largest capitalised 100 banks across the world generated a median total return of 6.8% in the 2019 year through to September 6. By comparison, the largest capitalised 100 real estate stocks across the world, more than tripled that performance, generating a median total return of 23.6% over the same period.
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Similarly in Singapore, DBS Group Holdings,Oversea-Chinese Banking Corp and United Overseas Bank (UOB) averaged a 6.2% total return in the 2019 year through to September 6, while the iEdge SG Real Estate 20 Index generated a 21.0% total return, and the iEdge S-REIT Index generated a 25.5% total return.
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The measured investor interest can also be exemplified with comparative institutional inflows. In the 2019 year through to September 6, the aforementioned UOB has seen net institutional outflow of S$475 million, whilst UOL Group has seen a net institutional inflow of S$27 million. Last year, coinciding with rising interest rates, UOB saw net institutional inflow of S$260 million, whereas UOL Group saw net institutional outflow of S$99 million.
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UOL Group has generated a total return of 23.9% in the 2019 year through to September 6, whilst UOB generated a total return of 8.9%. UOB acquired a controlling interest in UOL Group, with a subsequent rename from Faber Union, in 1975.
10 Biggest SGX Stocks that have Beat the Benchmark in Sep QTD
The ongoing moderation to the global growth outlook, and impact on interest rates has seen the Straits Times Index (“STI”) generate a decline of 4.0% in total return in the September quarter-to-date, which has trimmed its 2019 year to date total return to 6.1%.
While trade-orientated industrial stocks weighed the STI through August, multiple STI stocks and STI Reserve stocks generated gains. As many as 11 stocks amidst the 30 stocks that make up the STI and five stocks that make up the STI Reserve List have generated positive total returns in the September quarter through to September 6. The 10 largest capitalised of these stocks are tabled below:
| STI & STI Reserve List Stocks | SGX Code |
Market Cap S$Bn |
Total Return QTD % |
Total Return YTD % |
Total Return 2018 % |
Total Return 2017 % |
Total Return 2016 % |
|---|---|---|---|---|---|---|---|
| WILMAR INTERNATIONAL | F34 | 24.4 | 5.1 | 27.2 | 4.3 | -12.1 | 25.0 |
| THAI BEVERAGE PCL | Y92 | 22.4 | 7.2 | 49.2 | -31.7 | 11.3 | 27.2 |
| CAPITALAND | C31 | 17.9 | 0.8 | 18.3 | -9.0 | 20.1 | -7.2 |
| CAPITALAND MALL TRUST | C38U | 9.8 | 2.6 | 21.7 | 12.7 | 19.5 | 3.0 |
| ASCENDAS REAL ESTATE INV TRT | A17U | 9.8 | 0.6 | 25.5 | 0.3 | 27.4 | 4.6 |
| SINGAPORE EXCHANGE | S68 | 9.0 | 6.7 | 20.6 | 0.4 | 7.9 | -3.4 |
| CITY DEVELOPMENTS | C09 | 8.8 | 2.7 | 21.6 | -33.8 | 53.1 | 10.3 |
| CAPITALAND COMMERCIAL TRUST | C61U | 8.4 | 2.4 | 29.9 | -5.0 | 42.1 | 16.6 |
| MAPLETREE COMMERCIAL TRUST * ** | N2IU | 6.5 | 8.4 | 40.8 | 7.6 | 23.0 | 14.9 |
| SUNTEC REIT * | T82U | 5.4 | 0.8 | 13.4 | -12.8 | 37.6 | 13.2 |
Source: SGX StockFacts (Data as of 6 September 2019)
For comparative purposes all the STI stocks and STI Reserve List stocks are tabled below.
Mapletree Commercial Trust (MCT) will join the STI effective 23 Sep, with Hutchison Port Holdings Trust scheduled to leave the benchmark. Based on mid-year STI weightages and comparative performances to date, MCT would maintain a weightage in the STI that is close to 1.5%. This would bring the combined weightage of the four REITs in the STI to around 8.0%.
| STI & STI Reserve List Stocks | SGX Code |
Market Cap S$Bn |
Total Return QTD % |
Total Return YTD % |
Total Return 2018 % |
Total Return 2017 % |
Total Return 2016 % |
|---|---|---|---|---|---|---|---|
| DBS GROUP HOLDINGS | D05 | 63.3 | -3.5 | 9.3 | 1.2 | 47.7 | 8.1 |
| JARDINE MATHESON HLDGS | J36 | 54.3 | -13.1 | -20.3 | 19.8 | 4.0 | 18.8 |
| SINGAPORE TELECOMMUNICATIONS | Z74 | 52.3 | -5.6 | 12.8 | -13.2 | 3.2 | 4.0 |
| JARDINE STRATEGIC HLDGS | J37 | 48.2 | -15.4 | -12.2 | -4.6 | 11.0 | 25.2 |
| OVERSEA-CHINESE BANKING CORP | O39 | 46.8 | -2.6 | 0.5 | -6.2 | 43.6 | 5.6 |
| UNITED OVERSEAS BANK | U11 | 42.5 | -0.3 | 8.9 | -3.3 | 33.7 | 8.1 |
| WILMAR INTERNATIONAL | F34 | 24.4 | 5.1 | 27.2 | 4.3 | -12.1 | 25.0 |
| THAI BEVERAGE PCL | Y92 | 22.4 | 7.2 | 49.2 | -31.7 | 11.3 | 27.2 |
| HONGKONG LAND HOLDINGS | H78 | 18.5 | -8.8 | -5.4 | -6.1 | 5.5 | -4.8 |
| CAPITALAND | C31 | 17.9 | 0.8 | 18.3 | -9.0 | 20.1 | -7.2 |
| DAIRY FARM INTL HLDGS | D01 | 12.8 | -1.1 | -20.9 | 20.4 | 3.5 | 24.6 |
| SINGAPORE TECH ENGINEERING | S63 | 12.4 | -2.7 | 18.5 | 11.8 | 5.0 | 12.3 |
| JARDINE CYCLE & CARRIAGE | C07 | 12.1 | -15.1 | -10.5 | -10.0 | 1.0 | 21.5 |
| GENTING SINGAPORE | G13 | 10.9 | -2.2 | -5.8 | -23.2 | 48.6 | 21.6 |
| KEPPEL CORP | BN4 | 10.8 | -9.4 | 4.3 | -16.4 | 30.9 | -6.3 |
| SINGAPORE AIRLINES | C6L | 10.7 | -0.4 | -2.0 | -8.2 | 12.5 | -10.0 |
| CAPITALAND MALL TRUST | C38U | 9.8 | 2.6 | 21.7 | 12.7 | 19.5 | 3.0 |
| ASCENDAS REAL ESTATE INV TRT | A17U | 9.8 | 0.6 | 25.5 | 0.3 | 27.4 | 4.6 |
| SINGAPORE EXCHANGE | S68 | 9.0 | 6.7 | 20.6 | 0.4 | 7.9 | -3.4 |
| CITY DEVELOPMENTS | C09 | 8.8 | 2.7 | 21.6 | -33.8 | 53.1 | 10.3 |
| CAPITALAND COMMERCIAL TRUST | C61U | 8.4 | 2.4 | 29.9 | -5.0 | 42.1 | 16.6 |
| MAPLETREE COMMERCIAL TRUST * ** | N2IU | 6.5 | 8.4 | 40.8 | 7.6 | 23.0 | 14.9 |
| UOL GROUP | U14 | 6.3 | -0.9 | 23.6 | -28.8 | 51.2 | -1.5 |
| MAPLETREE LOGISTICS TRUST * | M44U | 5.7 | -0.6 | 29.0 | 1.5 | 38.7 | 10.8 |
| COMFORTDELGRO CORP | C52 | 5.5 | -3.6 | 22.2 | 13.7 | -16.4 | -16.3 |
| SATS | S58 | 5.5 | -4.0 | 7.5 | -7.2 | 10.9 | 30.9 |
| SUNTEC REIT * | T82U | 5.4 | 0.8 | 13.4 | -12.8 | 37.6 | 13.2 |
| VENTURE CORP | V03 | 4.5 | -3.7 | 15.9 | -29.1 | 115.4 | 28.0 |
| MAPLETREE NORTH ASIA COMMERCIAL TRUST * | RW0U | 4.3 | -6.9 | 22.9 | -1.1 | 38.3 | 11.7 |
| KEPPEL REIT * | K71U | 4.2 | 0.3 | 13.5 | -5.2 | 30.1 | 17.0 |
| YANGZIJIANG SHIPBUILDING | BS6 | 3.8 | -35.9 | -18.9 | -11.4 | 86.3 | -22.3 |
| SEMBCORP INDUSTRIES | U96 | 3.8 | -10.8 | -14.8 | -15.0 | 8.8 | -3.3 |
| GOLDEN AGRI-RESOURCES | E5H | 3.4 | -8.6 | 10.3 | -33.6 | -10.8 | 28.0 |
| SINGAPORE PRESS HOLDINGS | T39 | 3.2 | -18.9 | -13.9 | -6.9 | -21.0 | -6.1 |
| HUTCHISON PORT HOLDINGS TRUST ** | NS8U | 1.9 | -12.0 | -14.2 | -34.7 | -4.5 | -7.9 |
| MAPLETREE INDUSTRIAL TRUST** | ME8U | 4.7 | 5.9 | 28.0 | -0.7 | 32.2 | 15.8 |
* STI Reserve List
** Hutchison Port Holdings Trust will leave the STI effective September 23, Mapletree Commercial Trust will join the STI, while Mapletree Industrial Trust will join the STI Reserve List.
Source: SGX StockFacts (Data as of 6 September 2019)
