The FTSE ST Small Cap Index consists of more than 50 stocks, with the majority of the constituents maintaining a market cap of between S$2 billion and S$200 million. The Index, which is more than 50% weighed to the Real Estate Sector has generated an 8% decline in total return in the 2022 year-to-date, in-line with regional declines.
The FTSE ST Small Cap Index constituents saw S$250 million in aggregate net institutional outflows in the 2022 year-to-date. The 16 constituents that attracted net institutional inflows, were led by Riverstone, The Hour Glass and Chip Eng Seng with the trio averaging 35% total returns in the 2022 year-to-date.
In 2020-21 Riverstone launched its phase 6 expansion plan to add another 1.5 billion pieces to 10.5 billion pieces in total annual production capacity. The manufacturer of high-tech cleanroom gloves, premium healthcare gloves and cleanroom consumables is on track to increase capacity to 12.0 billion by the end of 2022.
Over the past 12 months, the outlook for decelerating global growth coupled with increased pace of inflation has seen the FTSE ST Small Cap Index decline 12%, in-line with the FTSE Asia Pacific Index which declined 15% in SGD terms.
Dividends reduced the 12-month decline in total return for the FTSE ST Small Cap Index to 7%, with the indicative yield of the Index at 5.7% as of the end of July. Of the current 52 constituents of the FTSE ST Small Cap Index, 19 constituents generated positive total returns over the past 12 months, with one stock unchanged and 32 stocks generating declines in total return.
With the FTSE ST Small Cap Index generating a decline of 8% in total return in the 2022 year to 26 August, the 52 constituents have drawn in aggregate S$250 million of net institutional outflow. The Index is mostly weighted to the Real Estate sector, which has been among the laggard global sectors in the 2022 year to 26 August, with double-digit percentage declines.
The 10 stocks that drew the most net institutional inflow over the 34 weeks, generated total return ranging from a decline of 0.9% to a gain of 68.4%, and are tabled below.
|FTSE ST Small Cap Index –
10 Constituents Recipient To
Highest YTD Net Institutional Inflows
|The Hour Glass||AGS||1,568||4.8||33.9||19.2||74.2|
|Chip Eng Seng||C29||518||21.1||16.0||68.4||53.4|
|Lendlease Global Commercial REIT||JYEU||1,890||6.1||10.1||1.3||4.2|
|Sabana Industrial REIT||M1GU||487||2.5||8.5||8.6||7.4|
|Straits Trading Co.||S20||1,385||11.9||2.0||-0.9||0.3|
The three stocks tabled above that saw the highest net institutional inflows over the past 34 weeks included:
Riverstone (SGX:AP4) saw S$37.7 million of net institutional inflow for the 34 weeks, while generating a 16.2% total return and ranking as a top 60 traded stock by turnover. On 11 Aug, Riverstone reported its 1HFY22 (ended 30 June) net profit normalised to RM208.9 million and noted its planned expansion to increase capacity to 12.0 billion pieces of gloves for end 2022 is on track while it continues to fortify its cleanroom gloves segment. Once its 3-year expansion plan completes in 2024, its annual glove production capacity will reach 15.0 billion pieces.
- The Hour Glass (SGX:AGS) has ranked among the 80 most traded stocks this year, while generating a 19.2% total return. In its FY22 AGM Q&A on 29 July, the Group Managing Director noted that despite the potential challenges, management was confident that the overall business remained sound and was of the view that there remained a significant consumer interest outweighing the present supply conditions. As of 23 Aug, The Hour Glass has bought back 1.62% of its issued shares (excluding treasury shares) on the current share buyback mandate. (See the latest share buyback transactions of SGX listed companies). The Hour Glass is expected to report its 1HFY23 (ended 30 Sep) results by mid-November after reporting an 86% gain in FY22 (ended 31 Mar) after-tax profit to S$157 million.
Chip Eng Seng (SGX:C29) reported its 1HFY22 (ended 30 June) after tax profit increased by 319% from $9.2 million to $38.5 million on 5 Aug. Chip Eng Seng noted its 1HFY22 gross revenue increased by 2.2% from $622.4 million to $636.3 million. The increase was mainly due to improved performance from Construction, Hospitality and Education segments, partially offset by lower revenue from Property Development segment. In tandem with higher revenue, gross profit increased by a greater magnitude by 48.7% from $78.4 million to $116.6 million with higher margins achieved by the development properties. The stock ranks among Singapore’s most 100 traded stocks by turnover in the 2022 year to 26 Aug, while generating a 68.4% total return.
In addition to The Hour Glass, BRC Asia (SGX:BEC) was added to the Index along with seven other stocks in the March semi-annual review. BRC Asia has generated a 20.9% total return over the past 34 weeks while ranking outside the most 100 traded stocks by turnover. On 2 Aug, the company provided a business update for its 3QFY22 (ended 30 June), reporting after tax profit doubled to S$20.4 million for the quarter, up from S$10.2 million in 3QFY21. BRC Asia noted that as of 30 June, its sales order book stood at approximately S$1.135 billion.
By comparison, the 10 stocks of the Index that saw the most net institutional outflow over the 34 weeks all saw declines in total return, ranging from a decline of 0.6% for AIMS APAC REIT (SGX:O5RU) to a decline of 39.4% for Frencken (SGX:E28).
The results of the September FTSE ST Index review are expected to be released after the Thu 1 Sep close.