SGX Market Updates

23% Median Gains for SGX Most Active Energy-Linked Stocks in 2019


PUBLISHED ON |

13 January 2020

  • 10 Energy-related stocks ranked amongst Singapore’s most traded 200 stocks of 2019, generating a median total return of 23% for the year. The 10 stocks maintain a combined market capitalisation of S$24 billion, and contributed close to S$50 million in daily turnover in 2019.

  • The 10 Energy-related stocks also saw 40% median volatility in 2019, with the second-best performer of the group in 2019, Interra, seeing the highest volatility. Interra’s price gains coincided with drilling updates on the Kuala Pambuang exploration well in 4Q19.

  • Rex International and Sunpower Group were also amongst the strongest gainers in 2019. Rex International is a developer of proprietary technology, with oil exploration interests in Oman and Norway. Sunpower Group is an environmental protection solutions specialist with established manufacturing & services arm.




Last year, the price of WTI Crude Oil ended near US$61/bbl, up from US$45/bbl at the end of 2018. Presently the WTI Crude Oil price is at US$59/bbl with short term to longer term annualised volatility gauges, all above broader market averages, near 35%. Similarly, Singapore’s 10 most Energy-related stocks that ranked amongst its 200 most traded stocks of 2019, generated median volatility near 40% last year.  These 10 stocks generated a median total return of 23% in 2019 with the skewed average total return at 64%. There were 8 gainers amongst the 10 stocks and 2 decliners for the year.

Combined, the 10 stocks maintain a market capitalisation of S$24 billion, whilst their combined day-to-day trading turnover in 2019 was close to S$50 million. This means that as of the end of 2019, the 10 stocks made up 2.6% of the total market capitalisation of all stocks listed in Singapore, while contributing 4.6% of the 2019 average daily turnover. The 10 most energy-related stocks that ranked amongst the 200 most traded stocks of 2019 are tabled below, and sort by average daily turnover in 2019.


Energy-related Stocks
amongst 200 Most traded
stocks in 2019
SGX
Code
Mkt Cap
(S$M)
2019
Volatility
2019
Price
Change
2019
Total
Return
2020 YTD
Price
Return
2019
Average Daily
Turnover
(S$M)
KEPPEL CORP BN4 12,460 21% 15% 19% 1% 21.7
SEMBCORP INDUSTRIES U96 4,141 23% -10% -8% 1% 8.0
SEMBCORP MARINE S51 2,782 33% -14% -14% 1% 7.8
REX INTERNATIONAL 5WH 245 66% 273% 273% -8% 4.8
KEPPEL INFRASTRUCTURE TRUST A7RU 2,697 16% 13% 21% 0% 3.8
SUNPOWER GROUP 5GD 503 48% 91% 92% 0% 1.1
CHINA AVIATION OIL SINGAPORE G92 1,092 25% 20% 24% 0% 0.9
GSS ENERGY 41F 52 50% 14% 14% 0% 0.5
DYNA-MAC HOLDINGS NO4 157 60% 47% 47% -9% 0.3
INTERRA RESOURCES 5GI 48 100% 174% 174% -4% 0.1
Median     41% 17% 23% 0%

Source: SGX StockFacts, Thomson Reuters, Bloomberg (Data as of 10 January 2020)



The 3 strongest performers of the 10 energy-related stocks in 2019 were Rex International, Interra Resources and Sunpower Group.

  • Rex International is listed on Catalist and went into 2019 outside Singapore’s top 400 stocks by market capitalisation.  The stock was amongst Singapore’s 50 most traded stocks in 2019 and ended the year amongst Singapore’s 200 largest stocks by market capitalisation. Rex International is a developer of proprietary technology with oil exploration interests in Oman and Norway.  The company registered profit after tax of US$25.9 million in 9MFY19 (ended 30 Sep), as compared to loss after tax of US$6.6 million in 9MFY19. For more information click here.

  • Interra Resources exploration and production activities span South-East Asia and the stock generated its 2019 price gains in its 4QFY19. For its 9MFY19 (ended 30 Sep), Interra Resources reported its revenue was up 5% YoY at US$11.7 million with a net loss of US$1.1 million, compared to a net profit of US$1.2 million in 9MFY18. Interra Resources’ most recent  Kuala Pambuang Exploration Project Update was on 11 December (click here) and the most recent Myanmar Chauk Development Well Drilling commencement update was on 31 December (click here). For more information on Interra Resources click here.

  • Sunpower Group is an environmental protection solutions specialist with established Manufacturing & Services business, expanding into anti-pollution investment projects (Green Investments). On 18 December the company announced it had made its first-ever entry into the China Energy Group Top 500 List. Sunpower's Green Investments business operates plants that generate steam, heat and electricity.  The Green Investments segment contributed 26% (8% in FY17) of FY18 group revenue and 46% (22% in FY17) of FY18 operating profit.  The company reported 47% YoY growth in underlying net profit for its 9MFY19 (ended 30 Sep) and is expected to report FY19 results in the last week of February. For more information click here



Note a key risk of the traditional exploration & production businesses is that there are no guarantees that a company exploring for oil and gas will find anything of value. The consequence of a failed exploration program is a financial loss. This means companies may undergo long periods of time without economic realisation, and may return to the market for several rounds of fund raising for further project development. Exploration success by discovering a new oil or gas field, or extending an existing field, generates an asset that adds value to a company.

Last year, global stocks involved in exploration & production, integrated oil operations, midstream oil and gas, oil and gas services and equipment in addition to renewable energy, generated a median decline in total return of 4%, with Singapore stocks of the same genre in-line with a 5% decline.

Singapore is a focal point for the oil and gas industry, as Asia’s largest physical oil trading hub and price discovery centre. Last year the world’s two largest capitalised Energy stocks, ExxonMobil and Royal Dutch Shell, announced expansions in Singapore operations, with ExxonMobil expanding its refinery at Jurong to upgrade oil-based production & Shell increasing its storage capacity at Bukom.







This article is provided by SGX My Gateway.



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