• The iEdge SG Advanced Manufacturing Index have has declined 4% in the 3Q22 to 7 Sep, while booking S$10 million of net institutional inflows. This has reduced the total return of the Index to 25%, which compares to 9% for the FTSE ST All-Share Index and 1% for the FTSE Asia Pacific Index.

• The 5 Index heavyweights of the iEdge SG Advanced Manufacturing Index, NIO Inc, Venture Corporation, Wilmar International, ST Engineering and Thai Beverage comprise approximately half the Index weights. NIO reported its 2Q22 and 1H22 results after the 7 Sep close and gained 1% in the 8 Sep Morning Session.

• With more than 100 constituents, the Index spans multiple sectors including Business Services, Consumer Cyclicals, Energy, Healthcare, Industrials, Non-Energy Materials, Consumer Non-Cyclicals, and Technology. This parallels Singapore’s manufacturing activity, which spans 6 clusters, with the Aug report scheduled for release on 26 Sep.

Just as manufacturing represents a significant component of Singapore’s GDP and exports, stocks with manufacturing-related activity continue to maintain a significant role within the Singapore stock market through combined market value and daily traded turnover.

Overall, the stocks of the iEdge SG Advanced Manufacturing Index have seen net institutional inflows of close to S$10 million in 3Q22 through to 7 Sep, while the Index generated a decline of 4% in total return. Over the past 10 weeks, market risks has grown with global and regional geopolitical risks, faster than expected monetary policy tightening, and ongoing COVID-19 containment risks. This has reduced the overall total return of the Index since the end of 2019 to 25%. Nonetheless, this is considered a highly competitive return throughout the past 2 years and 8 months, with the Dow Jones Industrial Average generating a 22% total return, the FTSE ST All-Share Index up by 9% and FTSE Asia Pacific Index up by 1%, using the same measure.

Together the 5 Index heavyweights, NIO (SGX:NIO), Venture Corporation (SGX:V03), Wilmar International (SGX:F34), ST Engineering (SGX:S63) and Thai Beverage (SGX:Y92) comprise approximately half the weights of iEdge SG Advanced Manufacturing Index.

NIO Inc currently maintains the highest Index weight and is a designer and developer of high-performance electric vehicles, which commenced its secondary listing in Singapore on 20 May. From its 20 May close through to 7 Sep, NIO’s share price has gained 2.4% in S$ terms, while maintaining 90-day Annualised Volatility above 70%. NIO has averaged more than S$5 million in daily trading turnover, and liquidity has increased by 14% in the first 5 trading days of September compared to August levels. Best bid-ask spreads continued to narrow in August to 16 basis points (~US$0.03) during Singapore and Hong Kong overlapping trading hours while top of book size averaged at US$28,000. On 7 Sep, NIO Inc reported 2Q22 vehicle sales were RMB 9,570.8 million (US$1,428.9 million), representing a 21% increase from 2Q21 and an increase of 3.5% from 1Q22. However, with higher cost of sales resulting from the expanded investment in power and service networks, 2Q22 gross profit decreased 15% from 2Q21. Looking forward, NIO’s Founder, Chairman and CEO noted that 2H22 is a critical period for NIO to scale up the production and delivery of multiple new products.

The 10 stocks of the iEdge SG Advanced Manufacturing Index that have seen the highest net institutional inflows for 3Q22 through to 7 Sep span multiple sectors including

• Technology sector – Venture Corporation (SGX:V03), UMS (SGX:558), AEM (SGX:AWX) and Aztech Global (SGX:8AZ);

• Industrials sector – Sembcorp Marine (SGX:S51), SATS (SGX:S58), MarcoPolo Marine (SGX:5LY) and Dyna-Mac (SGX:NO4);

• Non-cyclical Consumer sector – Wilmar International (SGX:F34); and

• Healthcare sector – UG Healthcare (SGX:8K7).

Source: SGX (Data as of 7 Sep 2022).

During 3Q22, the 10 stocks provided either financial reports or business updates:

• Of the S$54 million of net institutional inflow Venture Corporation booked in the 3Q22 through to 7 Sep, S$44 million of inflows flowed through following the company reporting its 1H22 results. Aside from reporting 1H22 net profit rose 24% y-o-y on 5 Aug, Venture Corporation (SGX:V03)’s management maintained that demand was expected to remain ‘unabated’ in 2H22. Specifically, the Group sees resilient demand across its diversified customer base, especially in the Life Science & Genomics, Healthcare & Wellness, Networking & Communications, Test & Measurement Instrumentation and Process & Test equipment in the semiconductor technology domains.

• On 12 Aug, UMS (SGX:558) reported 1H22 revenue surged 47% y-o-y, to its highest ever half yearly revenue, while AEM (SGX:AWX) reported its revenue increased 181% y-o-y, also delivering its highest half year revenue in its history.

• On 25 July, Aztech Global (SGX:8AZ) reported 46% y-o-y growth in revenue for 1H22.

• On the Industrials side,

  • On 22 July, SATS (SGX:S58) updated that its 1QFY23 (ended 30 June) revenue grew 36% y-o-y to S$375.5 million.

  • On 11 Aug, Dyna-Mac (SGX:NO4) reported 1H22 revenue of S$124.0 million, which was 17% higher than 1H21, and

  • On 12 Aug, Sembcorp Marine (SGX:S51) reported a lower net loss of S$143 million for 1H22 compared to a loss of S$647 million in 1H21.

  • On 18 Aug, MarcoPolo Marine (SGX:5LY) reported is 3QFY22 (ended 30 June) revenue increased more than 130% y-o-y.

• Wilmar International (SGX:F34) reported record net profit of US$1.16 billion for 1H22 on 4 Aug.

• UG Healthcare (SGX:8K7) reported its FY22 net profit declined 69% to S$36.8 million, down from S$118.8 million in FY21, and compares to pre-COVID net profit of S$2.5 million in FY19 on 25 Aug.

Price performances of these 10 stocks have been more varied, with multiple sub-drivers at play, which is expected when it comes to a fleet of stocks that represent different sectors operating not across the region.

Stocks of the iEdge SG Advanced Manufacturing Index that booked the most net institutional outflows in 3Q22 to 7 Sep includes

• ST Engineering (SGX:S63),
• Yangzijiang Shipbuilding (SGX:BS6),
• NIO (SGX:NIO),
• Food Empire (SGX:F03),
• Frencken (SGX:E28),
• Thai Beverage (SGX:Y92),
• Haw Par (SGX:H02),
• Delfi (SGX:P34),
• Top Glove (SGX:BVA) and
• Sarine Technologies (SGX:U77).

For more information on the iEdge SG Advanced Manufacturing Index, refer to SGX website here.

On the macroeconomic side, on 29 July, business expectations of the manufacturing sector also found that within the local manufacturing sector, all clusters except the transport engineering and precision engineering clusters expect a less favourable operating environment in the next six months. EDB Singapore also reported last month reported that the transport engineering cluster expanded 18% y-o-y for the first seven months of 2022, ranking its y-o-y growth as the strongest of the key six clusters.

On the other side of the manufacturing segments, EDB Singapore reported that the biomedical cluster decreased 5% y-o-y for the first seven months of 2022.

The Manufacturing Performance Report for August 2022 is due on 26 Sep.

For investors and traders of the relevant stocks, how much these expectations are built into prices, the future course for regional growth and inflation, in addition to any fruition of downside risks are expected to provide cues for the Index.