• The STI added 2.1% in January, taking its 3-month price return to 19.8%, with dividend distributions boosting the 3-month total return to 20.2%. Similarly, the highly correlated FTSE ASEAN All Share Index was comparatively level for January, bringing its 3-month total return to 16.8%.

• The strongest of the 30 STI stocks in January included Wilmar International, HongKong Land and Thai Beverage. Thai Beverage and Wilmar International were also the STI’s best performers over the past 3 months, with respective returns of 42% and 30%.

• DBS, OCBC and UOB continued to outpace the top quartile of global banks by market value. The trio averaged 2.2% gains in January, following 3.9% declines in 2020. Combined the 3 banks also led the net institutional inflows of Singapore-listed stocks in January, with S$214 million of inflows.

The Straits Times Index (STI) ended January 2021 at 2902.52, 478.68 points (or 19.8%) higher than the 2423.84 close at the end of October 2020. The 3 months of gains, which saw the onset of retracement on 25 November and then again on 21 January, saw the STI close twice above the key 3000 level. The STI gains coincided with a 16.4% price gain in the regional FTSE ASEAN All-Share Index and a 15.5% price gain for the FTSE Asia Pacific Index. The less correlated, sector-driven S&P 500 Index gained 10.5%.

STI’s Biggest Driver in Early 2021

The global campaign to overcome the Coronavirus continues to be the biggest driver for the STI. While the STI has declined 3.8% from the 21 January close, Singapore’s most traded medical supply stocks – Medtecs International, Top Glove, Riverstone and UG Healthcare averaged 0.2% gains, bringing their average 3-month decline to 18.1%. The recent 3-month consolidation of the medical supply stocks (note the quartet averaged 600%+ gains for the 6-month ended 31 October) reflects concern on the pace of the vaccine rollouts relative to the prevalence of the contagious strains of the coronavirus.

Two of the global economic powerhouses, the United States and Eurozone currently account for 78% of the global infections recorded by the WHO. Together the United States and the Eurozone account for more than a third of global trade and two-fifths of the global GDP. While the Federal Reserve Balance Sheet has grown 80% since January 2020, with the European Central Bank Balance Sheet up more than 40%, the latter part of January saw global risk markets take on the aforementioned concerns, and price in less optimism in an imminent return to a new normal.

While January saw the price of Gold decline 3.3% in SGD terms, the safe-haven gauge did rebound 5.5% during the final two sessions of the month. With Brent Crude Oil gaining 3.9% during the month, Sembcorp Marine was the Singapore’s most traded non-STI stock in January with 1.4% gains on the month on S$28 million of net institutional inflow.

STI’s Biggest Sector Outpaced Global Peers

The current top quartile of global banks by market value saw a median 0.6% gain in the month of January following median decline of 9.5% in total return over 2020. In Singapore, DBS, OCBC and UOB generated an average gain of 2.2% in January, following average decline of 3.9% in total returns in 2020. Combined the three banks have also led the net institutional inflows of Singapore-listed stocks in January, with S$214 million of inflows recorded (inflows were as high at S$283 million on 21 January).

• DBS will report its FY20 full year results before market open on 10 Feb (Wednesday).

• OCBC will report its FY20 full year results before market open on 24 Feb (Wednesday).

• UOB will report its FY20 full year results before market open on 25 Feb (Thursday).

Key industry drivers going into this year include the ability to expand non-interest income, potential for lower provisions, degree of net interest margin stabilisation, with the broader focus on the potential for an earnings and economic recovery in Singapore.

STI Highlights in January 2021

The STI ended January with a market capitalisation of S$525 billion, representing close to 60% of the combined market capitalisation of all stocks listed on Singapore Exchange.

The strongest of the 30 STI stocks in January included regional plays Wilmar International, HongKong Land and Thai Beverage. 2 of these three stocks, Thai Beverage and Wilmar International were also the STI’s best performers over the past 3 months, with respective returns of 42% and 30%.

The least performing STI stocks in January included City Developments, Keppel Corporation and ComfortDelGro. This brought the average total returns of these 3 stocks over the past 3 months to 15%.

Over the month, STI stocks saw combined net institutional inflows of S$18 million (compared to approximate inflows of S$300 million in January 2020) and combined net retail outflows of S$245 million (compared to approximate outflows of S$130 million in January 2020). Meanwhile, the combined AUM of the SPDR® Straits Times Index ETF and the Nikko AM Singapore STI ETF ended January at S$2.16 billion compared to S$2.07 billion at the end of 2020, with the unit creations and no redemptions generating S$47 million of net inflows into the 2 ETFs.

The recent momentum of the 30 STI stocks is tabled below, with the STI stocks sort by the highest total returns for the past 3 months.

Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 29 January 2021)