For the 2Q22 to date, the STI has generated an 8% decline in total return, with the FTSE Developed Index declining 16%. For the quarter, the broader Singapore stock market has seen S$1.05 billion of net institutional outflow, reducing the 2022 year-to-date net institutional inflow to S$74 million, with the STI 2022 year-to-date total return at 1%.
As global inflation gauges have continued to press longer term record levels since 31 March, expectations for the end of 2022 US Fed Funds Rate have increased from 225-250 bps to 350-375 bps. The impact of higher rates has also weighed global growth outlooks, with the World Bank tapering its 2022 global growth estimate to 2.9% (from 4.1%).
The technology sector has continued to weigh global stocks since 31 March, with hospitality & real estate also lagging, while the defensive outperformance of global banks seen in 1Q22 narrowed considerably. In Singapore, banks, technology and REITs have now booked the most net institutional outflows across the sectors in the 2022 year-to-date.
The 20 stocks among the most actively traded Singapore stocks that booked the highest net institutional inflows in the 2022 year-to-date proportionate to their current market capitalisation, included five REITs and five industrial stocks, with the remaining 10 stocks representing eight sectors. These 20 stocks averaged a 22% total return in the 2022 year-to-date.
For the 2Q22 through to 17 June, the STI has declined 9.1%, with the dividend distributions of May reducing the decline to 7.6% in total return terms. This is half the declines of the FTSE Developed Index, which has generated a 15.8% decline in total return over the same 11 weeks.
The technology sector has continued to be the weakest of the global stock sectors in the 2Q22, as global inflation gauges have continued to revisit longer term record levels which has seen the majority of expectations for the end of 2022 US Fed Funds Rate (based on CME FedWatch) increase from 225-250 bps to 350-375 bps. The impact of the inflation and higher rates has also weighed global growth outlooks, with the World Bank this month reducing its 2022 global growth estimate to 2.9%, superseding a more optimistic outlook or 4.1% made in January.
Shifting of Fund Flows in 2022 Year-To-Date
Like 1Q22, the STI composition benefited from the comparative performances of banks over technology, with global technology stocks declining some 8% more than global bank stocks since 31 March. For 1Q22, the broader Singapore stock market attracted S$1.12 billion of net institutional inflows, and since 1Q22, has seen S$1.05 billion of net institutional outflows, resulting in 2022 year-to-date net institutional inflows of S$74 million, with the STI posting a marginal year-to-date total return of 1.2%.
Approximately half of the stocks traded on Singapore Exchange have booked net institutional inflows in the year-to-date, while half have booked net outflows. For passive investors however, there has been some rotation to the STI for the first 13 sessions of June with the two ETFs that track the STI on track to record their first monthly inflows for 2022, after five consecutive months of net outflows that exceeded S$100 million from January through to the end of May 2022.
Focusing on the 100 most traded SGX stocks by turnover this year, the 20 stocks that have booked the highest net institutional inflows, not on absolute basis, but proportionate to their current market capitalisation, have averaged 22% total returns in the year-to-date. As many as 19 of the stocks generated positive total returns, while one stock, Singapore Post (SGX:S08), remained unchanged.
The 20 stocks have also booked a total of S$1.94 billion of net institutional inflows in the year-to-date, led by SingTel (SGX:Z74). The 20 stocks are tabled below.
|Actively Traded Singapore Stocks
with Highest YTD Net Institution
Inflows Proportionate to
as % of
|Jiutian Chemical||C8R||195||23||12.0%||40||22||Materials & Resources|
|City Developments||C09||7,382||243||3.3%||24||7||Real Estate (excl. REITs)|
|Hong Fok||H30||775||11||1.4%||24||9||Real Estate (excl. REITs)|
|Ascott Residence Trust||HMN||3,780||44||1.2%||14||2||REITs|
|Sheng Siong||OV8||2,300||25||1.1%||7||3||Consumer Non-Cyclicals|
|Bumitama Agri||P8Z||1,179||13||1.1%||31||-7||Consumer Non-Cyclicals|
|CapitaLand Integrated Commercial Trust||C38U||14,320||154||1.1%||6||-4||REITs|
|Jardine C&C||C07||11,928||123||1.0%||51||24||Consumer Cyclicals|
|Frasers Hospitality Trust||ACV||1,339||13||1.0%||51||31||REITs|
As shown in the table above, Jiutian Chemical (SGX:C8R) has booked S$23 million of net institutional inflow in the year-to-date which represents 12.0% of the stock’s current market capitalisation of S$195 million. Representing the Materials & Resources sector, Catalist-listed and Henan-based company manufactures and produces dimethylformamide (“DMF”), methylamine, sodium hydrosulfate and dimethylacetamide.
For its 1Q22, Jiutian Chemical reported net profit of RMB 201 million, a 123% increase over the same period last year, notwithstanding 15 days of lower production volume in January 2022 due to COVID related restriction affecting logistics. This followed on from its 2021 net profit growing 87% from 2020, on increased demand for its products by downstream users as well as surge in average selling prices of DMF and Methylamine. Since the end of 2019, Jiutian Chemical Group’s market capitalisation has grown 6-fold from just over S$30 million to over S$190 million.
See also: SGX market fund flow summary.