SGX Market Updates

Trio of SGX Largest, Best-Performing Utilities Stocks Returned 20% in 2019 YTD


PUBLISHED ON |

21 October 2019

  • The Utilities Sector is typically made up of stocks that provide gas, electricity or water, with population growth the underlying driver of demand for these services. As a result, the sector has traditionally been seen as more defensive than cyclical in nature.

  • SGX’s Utilities Sector was the top performing sector in September 2019, generating a total return of 3.7%. It outperformed total returns of 2.2% for Banks, 1.4% for Real Estate (excluding REITs), 1.3% for Technology and 1.0% for REITs for the month.

  • In the YTD, the 3 largest, best-performing Utilities stocks were: China Jinjiang Environment (+28.3%), Keppel Infrastructure Trust (+21.5%) and China Everbright Water (+8.7%). The trio averaged a YTD total return of +19.5%, bringing their 1Y total return to +12.5%.




The Utilities Sector is typically made up of stocks that provide gas, electricity or water, with population growth the underlying driver of demand for these services. As a result, the sector has traditionally been seen as more defensive than cyclical in nature. 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.

SGX’s Utilities Sector was the top performing sector in September 2019, generating a total return of 3.7%. It outperformed total returns of 2.2% for Banks, 1.4% for Real Estate (excluding REITs), 1.3% for Technology and 1.0% for REITs.



SGX Utility Sector September 2019 Total Return

Source: SGX data



Between January and September 2019, Utilities was the fourth-best performing sector on SGX with a total return of 14.8%, after total returns of 42.1% for Technology, 24.2% for REITs, and 17.8% for Consumer Non-Cyclicals.



SGX Utility Sector 9M2019 Total Return

Source: SGX data



SGX’s largest capitalised Utilities plays are Sembcorp Industries (whose Energy and Power operations account for more than 60% of group revenue), Keppel Infrastructure Trust, China Everbright Water, China Jinjiang Environment, CITIC Environment and SIIC Environment. These 6 stocks have a combined market capitalisation of almost S$10 billion.

In the 2019 year-to-date, the 3 largest, best-performing Utilities stocks were: China Jinjiang Environment (+28.3%), Keppel Infrastructure Trust (+21.5%) and China Everbright Water (+8.7%). The trio have averaged a YTD total return of +19.5%, bringing their one-year total return to +12.5%.

The table below details the 6 largest Utilities stocks on SGX, sorted by YTD total return.

Name SGX
Code
Market
Cap
S$m
Total
Return
YTD
%
Total
Return
1 Yr
%
CHINA JINJIANG ENVIRONMENT BWM 859 28.3 25.5
KEPPEL INFRASTRUCTURE TRUST A7RU 2,747 21.5 21.3
CHINA EVERBRIGHT WATER U9E 886 8.7 -9.4
SIIC ENVIRONMENT BHK 638 -11.6 3.4
SEMBCORP INDUSTRIES U96 3,753 -16.8 -28.4
CITIC ENVIROTECH CEE 742 -19.5 -36.2

Source: Bloomberg & StockFacts (data as of 18 Oct 2019)



In July 2017, SGX’s Utilities Sector saw a new addition with the Catalist listing of Union Gas Holdings. Union Gas, with a market cap of S$56 million, is an established provider of fuel products in Singapore, with over 40 years of operating track record in the business of Retail LPG, CNG and Diesel. In the YTD, the stock has generated a total return of 8.4%.







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