Singapore stocks that recently ranked highly for Growth Factor Exposure have kept pace, and been marginally stronger than Value stock counterparts in January (through to 21 Jan). The group of 20 Growth stocks averaged a 6% gain, compared to the 20 Value stocks averaging a 5% return.
In 2020, from April to Oct, the 20 Growth stocks doubled the returns of the 20 Value stocks, and outpaced the STI’s partial recovery. The 20 Growth stocks ranked highest in terms of 3 year sales per share and earnings per share growth with in a group of more than 100 actively traded Singapore stocks.
The strongest of the Growth stocks in the first 13 sessions in 2021 were AEM and UMS, averaging a 20% gain on S$40mil of net institutional inflow, while the strongest Value stock was Golden Agri-Resources with a 23% gain on S$7mil of net institutional inflow.
AEM & UMS Led Growth Stock Gainers in Early 2021
Over the first 13 sessions of 2021, Singapore’s Growth stocks have edged higher than Value stocks, with respective average gains of 6% and 5%. The 20 stocks that ranked highly for Growth factor exposure in mid-2020 maintain a combined market value of S$145bil and were recipient to S$333mil of net institutional inflow over the past 13 sessions, following S$1.15bil of net institutional outflow in 2020.
Leading the Growth stocks over the past 13 sessions have been AEM (SGX:AWX) and UMS (SGX:558) which have averaged 20% gains on net institutional flows close to S$40mil. Like the Philadelphia Semiconductor Index the two stocks have posted double digit gains in the month this far, coinciding with reports of demand for semiconductors by global car manufacturers outweighing supply.
While integrated circuits and semiconductors maintain an increasingly wide field of application, the Chairman and CEO of UMS Holdings did signal potential supply constraints last year, noting the resurgence of COVID-19, trade tensions and currency volatility meant the group would stay prudent and sharpen its production efficiencies and supply chain networks to cope with the challenges ahead.
Meanwhile, the strongest of the Value stocks over the past 13 sessions were Golden Agri-Resources (SGX:E5H) with a 23% gain on S$7mil of net institutional inflow. Golden Agri-Resources grew its revenue 6% y-o-y in its 9MFY20 (ending 30 Sep), reaching almost US$5bil, primarily attributable to higher average selling prices. However, third-quarter revenue saw a quarter-on-quarter decrease by seven percent due to lower sales volume.
While the weekly moves of the Golden Agri-Resources share price were 60% correlated to the price of Crude Palm Oil between 2016 and 2018, there was little correlation from the end of 2018 through to the end of 2020. The company noted in November that it had continued its sustainability programmes and initiatives despite the challenging situation due to the global pandemic. As of third quarter 2020, Golden Agri-Resources had achieved over 88% Traceability to the Plantation for its entire palm supply chain.
The 20 stocks that ranked highly for Value factor exposure in mid-2020 maintain a combined market value of S$104bil and were recipient to S$71mil of net institutional inflow over the past 13 sessions, following S$570mil of net institutional outflow in 2020. Proportionate to market value, the 20 Value stocks saw less net institutional outflows than the 20 Growth Stocks in 2020, while also seeing less net institutional inflow in the 2021 year-to-date.
Factor Exposures, Common Attributes and Differences in 2020 Returns
Of the 20 stocks that ranked highest for Growth factor exposure, 6 of the stocks also ranked among the 20 stocks with the highest Value factor exposure. These were Hong Fok Corp (SGX:H30), Olam International (SGX:O32), China Everbright Water (SGX:U9E), China Sunsine (SGX:QES), Sasseur REIT (SGX:CRPU) and Yangzijiang Shipbuilding (SGX:BS6). Of the 6 stocks, the latter 4 stocks are also constituents of the FTSE ST China Index. Hong Fok Corp, Sasseur REIT and China Sunsine also ranked among the 10 stocks with the highest Multi-Factor exposure.
The Factor Investing in Singapore Report by Nicolas Rabener and supported by Singapore Exchange was published last year and based on all available information collected on more than 100 stocks through to 30 June 2020 (click here for full report).
Factor investing is a relatively new method of grouping that looks to link past and potential performances of stocks according to common factor attributes:
Value stocks typically have the most inexpensive valuations or lowest valuations in terms of a screening, which in this case applied an equal-weight combination of price-to-book (P/B) and price-to-earnings (P/E) multiples.
Growth stocks typically display earnings growth and the two growth metrics used by FactorResearch for selecting stocks with Growth Factor exposure include 3-year sales-per-share and earnings-per-share growth.
As shown in the table below, the Growth stocks outpaced the Value stocks for much of the year, during the tentative recovery in April, which then extended to a partial recovery through to the end of October. During that seven months, the 20 stocks with the most Growth attributes doubled the returns of the 20 Singapore stocks with the most Value attributes.
| Total Returns | 31-Dec19 To 23-Mar-20 |
23 Mar-20 To 30-Oct-20 |
30-Oct-20 To 6-Nov-20 |
6-Nov-20 To 31-Dec-20 |
2021 YTD |
|---|---|---|---|---|---|
| STI | -30% | 12% | 6% | 11% | 5% |
| iEdge S-REIT Index | -33% | 33% | 6% | 4% | 5% |
| Growth Stocks (Median) | -33% | 21% | 3% | 8% | 5% |
| Value Stocks (Median) | -34% | 16% | 1% | 8% | 4% |
| Growth Stocks (Average) | -33% | 32% | 3% | 11% | 6% |
| Value Stocks (Average) | -33% | 17% | 1% | 11% | 5% |
Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 20 January 2021)
The big moves down in March, then up in November, saw little difference in the performance of the two different styles of stocks - Growth and Value. This meant that in Singapore and globally, Growth stocks outperformed Value stocks in 2020. However, for the first 2 weeks of 2021, like the last two months of 2020, there has been little difference in the performance of Growth and Value stocks in Singapore.
The performances of each of the 20 Growth stocks and Value stocks are tabled below, with the first table sort by the highest Growth factor exposure and the second table sort by the highest Value factor exposure.
20 SGX Listed Stocks that Ranked Highest for Growth Exposure
| Top 20 SG Growth Stocks | SGX Code |
Mkt Cap S$mil |
2020 Total Return |
2021 YTD Total Return |
2020 Net Institution Flow S$mil |
2021 YTD Net Institution Flow S$mil |
|---|---|---|---|---|---|---|
| AEM | AWX | 1129 | 75% | 19% | 16.4 | 24.6 |
| Cosco Shipping International | F83 | 661 | -15% | 5% | -2.2 | -0.4 |
| BRC Asia | BEC | 367 | 3% | 6% | 1.3 | -1.3 |
| Dasin Retail Trust | CEDU | 591 | -1% | -3% | -1.2 | -0.2 |
| China Everbright Water | U9E | 672 | -25% | 4% | -13.3 | -2.3 |
| GSH Corp | BDX | 389 | -46% | 6% | 0.3 | 0.0 |
| PropNex | OYY | 298 | 62% | 3% | 2.5 | -1.1 |
| Sasseur REIT | CRPU | 983 | 0% | -1% | -35.2 | -2.7 |
| Yangzijiang Shipbuilding | BS6 | 4195 | -11% | 14% | -172.8 | 43.1 |
| Frencken | E28 | 611 | 47% | 8% | 9.9 | 5.2 |
| Hong Fok Corp | H30 | 600 | -5% | -4% | 6.1 | -1.4 |
| UOL | U14 | 6507 | -5% | 0% | 43.5 | -5.5 |
| Lippo Malls Indonesia Retail Trust | D5IU | 204 | -67% | 10% | -14.9 | 0.5 |
| Keppel Pacific Oak US REIT | CMOU | 881 | -8% | 3% | -11 | -1.8 |
| China Sunsine | QES | 466 | -1% | -3% | -0.7 | -1.4 |
| DBS | D05 | 67297 | 2% | 5% | -605.8 | 170.1 |
| Olam International | O32 | 5241 | -11% | 7% | -29.8 | 3.9 |
| Venture Corp | V03 | 5933 | 25% | 5% | 168.6 | 3.0 |
| UMS | 558 | 693 | 10% | 20% | 18.6 | 15.0 |
| OCBC | O39 | 47422 | -4% | 5% | -531.8 | 86.2 |
| Median | -3% | 5% | ||||
| Average | 1% | 6% |
Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 20 January 2021).
20 SGX Listed Stocks that Ranked Highest for Value Exposure
| Top 20 SG Value Stocks | SGX Code |
Mkt Cap S$mil |
2020 Total Return |
2021 YTD Total Return |
2020 Net Institution Flow S$mil |
2021 YTD Net Institution Flow S$mil |
|---|---|---|---|---|---|---|
| Yanlord Land | Z25 | 2202 | -2% | 2% | -19.4 | -9.3 |
| Hutchison Port Holdings Trust | NS8U | 2597 | 24% | 14% | -3.7 | -1.7 |
| China Everbright Water | U9E | 672 | -25% | 4% | -13.3 | -2.3 |
| Hong Fok Corp | H30 | 600 | -5% | -4% | 6.1 | -1.4 |
| OUE | LJ3 | 1032 | -16% | -3% | 1.3 | -0.3 |
| GuocoLand | F17 | 1952 | -19% | 8% | -11.3 | 0.1 |
| Frasers Property | TQ5 | 3726 | -25% | 2% | -8.1 | -1.2 |
| Yangzijiang Shipbuilding | BS6 | 4195 | -11% | 14% | -172.8 | 43.1 |
| China Sunsine | QES | 466 | -1% | -3% | -0.7 | -1.4 |
| Golden Agri-Resources | E5H | 2488 | -30% | 23% | -9.1 | 6.5 |
| Tianjin Zhongxin Pharmaceutical | T14 | 2295 | 7% | 3% | -10.5 | -0.6 |
| CapitaLand | C31 | 17812 | -9% | 5% | -58.7 | 32.2 |
| Asian Pay TV Trust | S7OU | 210 | -23% | -3% | -5.2 | -1.6 |
| SPH | T39 | 1942 | -47% | 8% | -204.8 | 7.8 |
| BHG Retail REIT | BMGU | 299 | -16% | 6% | 15.2 | 0.0 |
| Jardine Matheson | J36 | 54782 | 3% | 1% | -2.2 | -0.5 |
| Olam International | O32 | 5241 | -11% | 7% | -29.8 | 3.9 |
| Oxley | 5UX | 974 | -35% | 7% | -0.2 | 0.2 |
| Sasseur REIT | CRPU | 983 | 0% | -1% | -35.2 | -2.7 |
| Chip Eng Seng | C29 | 345 | -24% | 0% | -7.8 | -0.1 |
| Median | -14% | 4% | ||||
| Average | -13% | 5% |
Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 19 January 2021).
As noted above, the above Growth and Value stocks include 3 stocks that also rank among the 10 highest stocks for multi-factor exposure which includes Size, Momentum, Low Volatility, Quality and Dividend Yield.
- Hong Fok (SGX:H30),
- Sasseur REIT (SGX:CRPU) and
- China Sunsine (SGX:QES).
Quality exposure can also be used in conjunction with value exposure in order to attempt avoiding so-called Value traps. Of the 20 stocks with the highest Value exposure tabled above, the following 7 stocks also ranked among the 50 stocks with the highest Quality factor exposure.
- Hong Fok (SGX:H30),
- Yangzijiang Shipbuilding (SGX:BS6),
- China Sunsine (SGX:QES),
- Tianjin Zhongxin Pharmaceutical (SGX:T14),
- BHG Retail REIT (SGX:BMGU),
- Jardine Matheson (SGX:J36) and
- Sasseur REIT (SGX:CRPU).
