SGX Market Updates

Trio of SGX Best-Performing Consumer Cyclical Plays Returned 42% in 10M19


PUBLISHED ON |

07 November 2019

  • Consumer Cyclicals was among the top net buy sectors on SGX in Oct – garnering institutional inflows of S$18.5 million – after Telecommunications, the top net buy sector that attracted net inflows of S$55.9 million. This was the second straight month of net inflows for Consumer Cyclicals, after S$11.5 million net inflow in Sept.

  • Among the Consumer Stocks with more cyclical businesses, at least 24 have a market cap of S$200 million and above. The 10 best performers among them operate in the consumer retail, luxury retail, café/restaurant, leisure/tourism, as well as hotel/hospitality segments, both in Singapore and the region.

  • Among these 10 plays, the 3 best performers in 10M2019 were: Department store operator Isetan (Singapore) (+48.4%), as well as luxury watch retailers Cortina Holdings (+44.5%) and The Hour Glass (+33.7%). The trio averaged a total return of 42.2%.




Consumer Cyclicals was among the top net buy sectors on SGX in October 2019 – garnering institutional inflows of S$18.5 million – after Telecommunications, the top net buy sector that attracted net inflows of S$55.9 million. This was the second straight month of net inflows for Consumer Cyclicals, after S$11.5 million net inflow in September.



Net Institution Inflows for SGX Consumer Cyclicals

Source: SGX data



Among these Consumer Stocks with more cyclical businesses, at least 24 have a market cap of S$200 million and above. The 10 best performers among them have a combined market cap of nearly S$7 billion, and operate in the consumer retail, luxury retail, café/restaurant, leisure/tourism, as well as hotel/hospitality segments, both in Singapore and the region.

Over the January-October 2019 period, these 10 best-performing consumer cyclical plays have averaged a total return of 21.6%, bringing their three-year and five-year total returns to 28.0% and 23.3% respectively.

Among these 10 plays, the 3 best performers in the 10M2019 period were: department store operator Isetan (Singapore) (+48.4%), as well as luxury watch retailers Cortina Holdings (+44.5%) and The Hour Glass (+33.7%). The trio have averaged a total return of 42.2%.



The table below details the 10 best-performing consumer cyclical plays with market cap of S$200 million and above, sorted by 10M19 total returns.

Name SGX
Code
Market
Cap
S$m
Total
Return
10M19
%
Total
Return
3 Yr
%
Total
Return
5 Yr
%
ISETAN (SINGAPORE) I15 201 48.4 42.2 13.6
CORTINA HLDGS C41 219 44.5 113.6 110.7
THE HOUR GLASS AGS 564 33.7 35.3 51.0
KOUFU GROUP VL6 413 23.9 0.0 0.0
ACCORDIA GOLF TRUST ADQU 643 18.4 14.7 6.2
AMARA HLDGS A34 259 11.9 29.1 4.1
STRACO CORP S85 648 10.5 6.1 19.1
HOTEL GRAND CENTRAL H18 959 8.8 10.1 27.0
HOTEL PROPERTIES H15 1,959 8.3 19.2 4.5
GL LTD B16 1,094 7.5 9.4 -3.0
Average 21.6 28.0 23.3

Source: Bloomberg & StockFacts (data as of 31 Oct 2019)



Outlook for Hospitality and Tourism Sectors

Between January and June 2019, overall spending by tourist arrivals in Singapore declined 3% YoY to S$13.1 billion, according to data from the Singapore Tourism Board (STB). They spent 13% less on accommodation, 5% less on food and beverage, as well as 2% less on sightseeing, entertainment and gaming. However, retail spend increased by 2% to reach S$2.8 billion during the first half of the year.

However, the STB noted that Singapore continues to be an attractive tourism destination despite these headwinds, with robust growth seen in key markets such as China (+5%), the US (+12%), Japan (+7%) and Germany (+10%).

From January to September 2019, international tourist arrivals in the city-state reached 14.3 million, up 2.1% year on year, recently released STB data showed. For full-year 2019, the STB has projected tourism receipts to grow 1%-3% to between S$27.3 billion and S$27.9 billion. International arrivals are expected to increase by 1%-4% to between 18.7 million and 19.2 million.

Looking ahead, analysts expect Singapore’s hospitality sector to enjoy a cyclical upturn in 2020. “We believe we are at the cusp of a sustained turn in the performance of the Singapore hospitality sector,” DBS Group Research said in a sector report dated 31 October 2019. See report: Singapore Hospitality - This Time Is Real!

“With a robust line-up of returning and inaugural conferences in 2020, we anticipate a higher number of visitors to translate into stronger demand for rooms. With supply growth falling back to only c.1.5% in 2020 and average hotel occupancies at close to c.90%, the next leg of growth will be driven by room rates,” the report noted.

Key events scheduled to be held in the city-state next year include the Singapore Airshow, Food and Hotel Asia, The International Trademark Association Conference, The Lions Club International Convention, Industrial Transformation Asia Pacific and Gamescom Asia.







This article is provided by SGX My Gateway.



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