Effective 13 April 2021, Frasers Logistics & Commercial Trust has joined the STI with an indicative weight of 1.3%, taking the number of REITs within the STI to 7, with a combined Index weight of ~15%. This makes REITs the 3rd largest Sector by Index weight of the STI after Financials and Industrials.
Frasers Logistics & Commercial Trust’s portfolio comprises 100 properties that span industrial and commercial real estates. The portfolio value of approximately S$6.3 billion has grown threefold from IPO, and from the end of 2019, the trust ranked among the 30 best performers of the top quartile of global REITs by market value.
Frasers Logistics & Commercial Trust replaces Jardine Strategic in the STI. Jardine Matheson is acquiring the 15% of Jardine Strategic's share capital that it did not already own, and Jardine Strategic's revenue exposures have been replicable through the other public listings of the Group.
Frasers Logistics & Commercial Trust has joined the Straits Times Index (“STI”) w.e.f 13 April 2021, with Jardine Strategic omitted from the Index. A previous member of the STI Reserve List, Frasers Logistics & Commercial Trust maintained the highest market capitalisation of the 5 stocks on the 8 April close.
The key reason Frasers Logistics & Commercial Trust is joining the STI is because of its market capitalisation of S$5.0 billion, partially attributed a merger of Frasers Logistics & Industrial Trust and Frasers Commercial Trust in April 2020. Frasers Logistics & Industrial Trust absorbed Frasers Commercial Trust during the merger, with Frasers Logistics & Industrial Trust subsequently renamed to Frasers Logistics & Commercial Trust in April 2020.
The inclusion of Frasers Logistics & Commercial Trust to the STI brings the total number of REITs within the STI to 7, with a combined Index weight of ~15%. As tabled below, this makes REITs the 3rd largest Sector of the STI, by Index weight, after Financials and Industrials.
| Sector | STI Indicative Weightage (Based on 31 Data) |
|---|---|
| Financial Services | 43% |
| Industrials | 16% |
| REITs | 15% |
| Real Estate (excl. REITs) | 8% |
| Consumer Non-Cyclicals | 7% |
| Telecommunications | 6% |
| Consumer Cyclicals | 3% |
| Technology(Hardware/ Software) | 2% |
| Utilities | 1% |
Source: SGX, Refinitiv. (Weights based on 31 December 2020 data available here)
Frasers Logistics & Commercial Trust's Portfolio Value Up Threefold Since IPO
Frasers Logistics & Commercial Trust (SGX:BUOU)’s portfolio comprises 100 properties that span logistics, industrial and commercial real estates, with a portfolio value of approximately $6.3 billion. The properties are diversified across 5 developed countries - Australia, Germany, Singapore, the United Kingdom and the Netherlands.
The REIT has seen significant growth since and Frasers Commercial Trust listed in March 2006 and Frasers Logistics & Industrial Trust’s listing in June 2016. Frasers Logistics & Industrial Trust’s IPO portfolio of 51 industrial properties located in Australia had an appraised Value of S$1.6 billion. For more information click here.
Frasers Logistics & Commercial Trust has also outpaced the S-REIT Indices over the past 15 months generating total returns which include distributions of 27%, while currently maintaining a 4.7% distribution yield.
Since the end of 2019, Frasers Logistics & Commercial Trust has ranked among the 30 best performers of the top quartile of global REITs by market value. The REIT maintains an indicative 1.3% weight in the STI, based on publicly available STI weights as of 31 December 2020. The indicative weights of the STI stocks are tabled below.
| STI Stocks | SGX Code |
Prior Weights Before JSH Deletion (based on 31Dec2020 weights) |
New Weights After JSH Deletion (based on 31Dec2020 weights) |
Sector/ Industry |
|---|---|---|---|---|
| Ascendas REIT | A17U | 3.55% | 3.58% | REITs |
| CapitaLand | C31 | 3.08% | 3.11% | Real Estate (excl. REITs) |
| CapitaLand Integrated Commercial Trust | C38U | 3.44% | 3.47% | REITs |
| City Developments | C09 | 1.36% | 1.37% | Real Estate (excl. REITs) |
| ComfortDelGro | C52 | 1.25% | 1.26% | Industrials |
| Dairy Farm International | D01 | 0.60% | 0.61% | Consumer Non-Cyclicals |
| DBS Group | D05 | 16.31% | 16.45% | Financial Services |
| Frasers Logistics & Commercial Trust | BUOU | N/A | 1.31% | REITs |
| Genting Singapore | G13 | 1.80% | 1.82% | Consumer Cyclicals |
| Hongkong Land | H78 | 2.31% | 2.33% | Real Estate (excl. REITs) |
| Jardine Cycle & Carriage | C07 | 0.71% | 0.72% | Consumer Cyclicals |
| Jardine Matheson | J36 | 5.66% | 5.71% | Industrials |
| Jardine Strategic | J37 | 2.18% | N/A | Industrials |
| Keppel Corporation | BN4 | 2.81% | 2.83% | Industrials |
| Keppel DC REIT | AJBU | 1.24% | 1.25% | REITs |
| Mapletree Commercial Trust | N2IU | 1.70% | 1.71% | REITs |
| Mapletree Industrial Trust | ME8U | 1.72% | 1.74% | REITs |
| Mapletree Logistics Trust | M44U | 2.03% | 2.05% | REITs |
| OCBC Bank | O39 | 12.83% | 12.94% | Financial Services |
| SATS | S58 | 0.92% | 0.93% | Industrials |
| Sembcorp Industries | U96 | 0.57% | 0.57% | Utilities |
| Singapore Exchange | S68 | 2.78% | 2.80% | Financial Services |
| Singapore Airlines | C6L | 1.99% | 2.01% | Industrials |
| SingTel | Z74 | 6.27% | 6.32% | Telecommunications |
| ST Engineering | S63 | 2.13% | 2.15% | Industrials |
| Thai Beverage | Y92 | 2.63% | 2.65% | Consumer Non-Cyclicals |
| UOB | U11 | 10.59% | 10.68% | Financial Services |
| UOL Group | U14 | 1.38% | 1.39% | Real Estate (excl. REITs) |
| Venture Corporation | V03 | 1.84% | 1.86% | Technology(Hardware/ Software) |
| Wilmar International | F34 | 3.60% | 3.63% | Consumer Non-Cyclicals |
| Yangzijiang Shipbuilding | BS6 | 0.73% | 0.74% | Industrials |
Source: SGX, Refinitiv. (Weights based on 31 December 2020 data available here)
Prior to the March 8 open, Jardine Strategic announced that it had agreed to Jardine Matheson proposal to acquire the 15% of Jardine Strategic share capital that it does not already own. The proposal was approved at a special general meeting last night on 12 April. This has seen Jardine Strategic omitted from the STI effective today, which has made room for Frasers Logistics & Commercial Trust.
Jardine Strategic (SGX:J37) has averaged S$56 million a day in trading turnover a day in the 2021 year to 12 April. The remaining SGX listings of the Jardines Group (“Group”), Jardine Matheson (SGX:J38), Hongkong Land (SGX:H78), Jardine Cycle & Carriage (SGX:C07), Dairy Farm International (SGX:D01) and Mandarin Oriental (SGX:M04) have averaged combined trading turnover of S$70 million a day in the 2021 year to 12 April. Despite 4 of these 5 stocks maintaining a secondary listing on SGX, the majority of their day-to-day trading volume is transacted on SGX.
Jardine Matheson Generated Annualised 6.8% Total Returns Over The Past 10 Years
As the listed holding company of the Group, Jardine Matheson (SGX:J38) maintains interests in Jardine Pacific, Jardine International Motors, and Jardine Strategic. Jardine Strategic (SGX:J37) has maintained interests in Hongkong Land, Dairy Farm International, Mandarin Oriental, Jardine Cycle & Carriage and Indonesia-listed Astra International. This means Jardine Strategic's revenue exposures have been replicable through the other public listings of the Group.
Jardine Matheson has been the strongest performer of the SGX listings of the Group over the past 10 years, generating average annualised total returns of 6.8%. By comparison, the annualised total returns of Asia Pacific’s top quartile of Consumer cyclical stocks by market value generated a 5.7% average annualised total return, while the same measure for Industrial stocks saw a 5.3% average annualised total return.
Jardine Cycle & Carriage Strategically Serving ASEAN’s Urbanisation & Growing Consumer Class
Jardine Cycle & Carriage (Jardine C&C) maintains a strong ASEAN focus and highlights that Jardine C&C is a long-term partner of Southeast Asia. Within the SGX-listed companies of the Group, Jardine C&C is a primary listing on SGX. Jardine C&C invests in businesses that participate in key sectors that provide products and services in the infrastructure, housing, energy, transportation, financing and consumables industries. Jardine C&C has a 50.1% interest in Astra, a diversified business group in Indonesia with seven core businesses. While Astra’s contribution to Jardine C&C’s FY20 profit attributable to shareholders declined 57% year-on-year to US$309 million, its Other Strategic Interests segment was comparatively defensive and declined 5% year-on-year to US$120 million.
Jardine C&C has generated a total return of 42% since the broad market lows of 23 March 2020. The stock has outpaced benchmarks in the 2021 year to 12 April, with a 19% return, while recipient to net institutional and net proprietary inflows of S$39 million. Since the broad market lows, Jardine C&C has generated returns in-line with ASEAN Consumer Cyclicals. There are approximately 700 ASEAN-listed Consumer Cyclical stocks that have generated a 7% median price return in the 2021 year to 12 April, with a median 42% price recovery since 23 March 2020.
Jardine C&C currently maintains a P/E ratio of 13x. By comparison, the median P/E of ASEAN-listed Consumer Cyclical stocks is presently 16x, with the median P/E of all Consumer Cyclical stocks listed in Hong Kong and Singapore at 14x. On a P/B basis, Jardine C&C is trading at 0.98x, compared to the ASEAN-listed Consumer Cyclicals median at 1.03x, and 0.92x median for the Consumer Cyclical stocks listed in the Hong Kong and Singapore financial centres.
