SGX Market Updates

FTSE ST Small Cap Index’s Best-Yielding Non-REIT Constituents Avg 7% Yield


PUBLISHED ON |

08 October 2019

  • The FTSE ST Small Cap Index’s 49 constituents – comprising 20 REITs and 29 companies – have a combined market cap of about S$37 billion. REIT constituents in the Index carry a weighting of approximately 71.9%, with companies accounting for the remaining 28.1%.

  • Against a backdrop of increasing geopolitical uncertainty, market volatility and slowing global growth, analysts are recommending that investors include high-yielding, defensive stocks in their portfolios.

  • The 5 non-REIT constituents of the FTSE ST Small Cap Index with the highest dividend indicated yields are: UMS (7.4%), Valuetronics (7.1%), QAF (6.8%), Duty Free Intl (6.7%) and Chip Eng Seng (6.4%). They average a 12M indicated yield of 6.9%, vs the STI’s yield of about 4%, and SGS 5Y and 10Y yields of around 1.6%.




The FTSE ST Small Cap Index is a free float-adjusted, market capitalisation-weighted index, representing the performance of small-cap companies that pass size, free float and liquidity screens and trade on SGX Mainboard. The Index’s 49 constituents – comprising 20 Real Estate Investment Trusts (REITs) and 29 companies – have a combined market cap of about S$37 billion, ranging from S$45 million to nearly S$3 billion.

REIT constituents in the Index carry a weighting of approximately 71.9%, with companies accounting for the remaining 28.1%. More broadly, beyond the Index are approximately another 300 stocks listed on SGX that fall within this market cap range.

Against a backdrop of increasing geopolitical uncertainty, market volatility and slowing global growth, analysts are recommending that investors include high-yielding, defensive stocks in their portfolios.

The 5 non-REIT constituents of the FTSE ST Small Cap Index with the highest dividend indicated yields are: UMS Holdings (7.4%), Valuetronics Holdings (7.1%), QAF Ltd (6.8%), Duty Free International (6.7%) and Chip Eng Seng (6.4%). They average a 12-month indicated yield of 6.9%, which compares with the benchmark Straits Times Index’s (STI) indicated yield of about 4%, and the Singapore Government Securities (SGS) 5- and 10-year yields of around 1.6%.


SGX Small Cap Stocks Dividend Indicated Yields

Source: Bloomberg, StockFacts & SGS data


These 5 best-yielding stocks, with a combined market cap of over S$1.6 billion, are categorised to the semiconductor equipment, electronics manufacturing, consumer staples, consumer discretionary, as well as construction and property sectors.


The table details the FTSE ST Small Cap Index’s 10 highest-yielding, non-REIT constituents, sorted by 12M dividend indicated yield.

Name SGX
Code
Market
Cap
S$m
12M Div
Ind Yld
%
Total
Return
YTD
%
P/E
(x)
UMS HLDGS 558 333 7.4 10.9 8.6
VALUETRONICS HLDGS BN2 268 7.1 -1.9 7.6
QAF LTD Q01 434 6.8 33.8 71.2
DUTY FREE INTL 5SO 179 6.7 -20.2 12.5
CHIP ENG SENG C29 394 6.4 0.6 6.6
HONG LEONG FINANCE S41 1,158 5.8 7.8 9.7
CHINA SUNSINE CHEMICAL CH8 542 5.0 -7.6 4.6
LIAN BENG GROUP L03 242 4.6 10.2 4.3
KOUFU GROUP VL6 399 4.5 19.7 15.2
HI-P INTL H17 925 4.4 33.8 9.1
Average 5.9 8.7 14.9

Source: Bloomberg & StockFacts (data as of 4 Oct 2019)



Note that among the 10, QAF and Hi-P International are also the second- and third-best performing constituents of the FTSE ST Small Cap Index in the YTD.


Read also the Market Update published yesterday on the FTSE ST Small Cap Index’s best-performing non-REIT constituents in the YTD.







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