• Since late August, institutional investors net bought S$1.4 billion in Singapore stocks, marking a significant turnaround from the S$1.3 billion net outflow earlier in the year. The 10 stocks with the most net institutional inflow included the STI banks and Singtel, averaging 5.2% total returns, while the remaining six stocks averaged 14.9% total returns.

• Over the past six weeks, major market expectations for 2024 were realised with policy rate cuts by the Fed and PBOC, more resilient ASEAN GDP and strong electronics demand tipping Singapore IP into a 1.7% YTD expansion. These have helped push the STI to a 17-year high, with the Index book valuation much less stretched than Oct 2007 levels.

• On 9 Oct, Singapore's Structured Warrants market saw its highest trading turnover since Jan 2019, driven by significant moves in the Hang Seng Index-tracking markets, while the 20 most traded Singapore stocks with significant Greater China revenue have averaged 22% total returns since Sep 20, paralleling the FTSE China A50 & CSI 300.

Institutional investors have been aggressive net buyers of Singapore stocks since end of August, with the inflows coinciding with various catalysts to re-price local equities. Going back to the most recent MSCI rebalance which took effect on August 30, institutional investors have since net bought S$1.43 billion in Singapore stocks, reversing the S$1.30 billion of net outflow in the 2024 year through to Aug 29.

The 10 local stocks that led the S$1.43 billion of net institutional inflow from the open of August 30 to the close of October 9 are tabled below. The 10 stocks include the 4 largest Singapore stocks by market capitalisation, i.e. the trio of banks and SingTel, which averaged 5.2% total returns over the period, paralleling the STI's 5.7% total return. The remaining six stocks averaged 14.9% total returns over the period.

Source: SGX & Refinitiv. All Data as of 9 Oct 2024.

Note: Yangzijiang Shipbuilding (SGX:BS6), CapitaLand Ascendas REIT (SGX:A17U), Frasers Centrepoint Trust (SGX:J69U), Venture Corp (SGX:V03) and Thai Beverage (SGX:Y92) booked the most net institutional outflow over the 6 weeks.

The past six weeks have brought to fruition many of the market expectations for 2024. The US Federal Reserve reduced the Fed Funds Rate by 50bps on Sep 18, the PBOC reduced its main policy rate by 20bps on Sep 24 while also announcing significant housing and capital market reforms, as key ASEAN GDP gauges either maintained rebound traction or accelerated.

In Singapore, the month of Sep saw strong electronics demand in both the Aug IP and NODX reports, enough to tip the former into expansion territory for the first 8 months of 2024 at 1.7%, following the 4.3% contraction in 2023.

Market risks have also increased with the tensions in the Middle East impacting energy prices and further propelling the price of Gold and SDPR Gold Shares ETF to recent all-time highs.

The economic developments and recent fund flows have culminated with the STI returning to 17-year highs, in addition to a surge in trading activity, spurring increased participation across various security products listed for trading on Singapore Exchange. Maintaining the local and regional economic momentum, and renewed growth and trade opportunities from supportive policies in the US, China, and Europe, is crucial for the outlook of Singapore stocks in 2025.

While the STI has been recently consolidating near the 17-year highs, the Index book valuation is at present half the stretched levels it saw back when the 3,906 all-time high was formed in Oct 2007. Ahead of the 3Q24 earnings season the 12-month Consensus Estimate Target Price on the STI sits at 3,864.

ETF AUM Up 7% in 2H24

While the two STI ETFs have delivered investors 6.4% annualised total returns since the end of 2019, it is other ETFs that have so far driven combined SGX-listed ETF AUM 7% higher in 2H24. The five ETFs that have contributed the most to this AUM growth included SPDR Gold Shares (O87, GSD), Lion-Phillip S-REIT ETF (CLR), Lion-OCBC Securities Hang Seng TECH ETF (HST), iShares MSCI Asia ex Japan Climate Action ETF (ICM) and CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF (LCS). This has coincided with the Lion Global-OCBC Hang Seng Tech ETF and A-share ETFs producing record trading volumes, in addition to the SPDR Gold Shares ETF daily turnover levels this month at 6-month highs.

The 10 ETFs, with the highest absolute increases in AUM since June 30 are tabled below, along with 2H24 and YTD total returns as of October 9.

Source: SGX. Data as of 9 Oct 2024.

Significant Repricing Expands China Market Trading Ranges and Opportunities

The slate of accommodative monetary policy measures and reforms announced in China since Sep 20 have propelled the CSI 300 by 24%, the FTSE China A50 Index by 20% and Hang Seng Index by 13% through to Oct 9. The significant repricing, has provided larger trading ranges which in turn having provided wider fields for risk and return.

Oct 9, Singapore's Structured Warrants market saw its highest trading turnover since Jan 2019. The most traded Structured Warrant and Daily Leverage Certificate both tracked the Hang Seng Index which was subject to a 6% trading range, following a 9% trading range in the preceding trading session. While still out of the money, the change in delta over the two sessions saw the HSI 18,200 Put Warrant with a Dec 30 2024 expiry (YWVW) price climb from 3.4 cents to 9.5 cents, while the Hang Seng Index declined 11% to 20,637.

Aside from the recent heavy trading in the SGX FTSE China A50 Index Futures, open interest reached another all-time high on 8 October, with the notional value of the 1.26 million lots at US$18.4 billion. The contract also booked its highest largest single day volume for the non-roll period. SGX CNH futures in the meantime saw much of their increased participation in late Sep which naturally coincided with the bout of volatility in the USD/CNH.

The 20 most traded Singapore stocks that reported at least half their revenue from Greater China in the last financial year have averaged 22% total returns since September 20, taking their average total return for the 2024 year to October 9, to 13%.

As detailed in the table below, reactions to the 20 stocks have been mixed, with 17 gainers, one stock unchanged and two decliners.

Source: SGX & Refinitiv. All Data as of 9 Oct 2024.

Within the list above, Singapore stocks that report all their revenue or income from China include CapitaLand China Trust (SGX:AU8U), NIO (SGX:NIO), Sasseur REIT (SGX:CRPU) and Tianjin Da Ren Tang (SGX:T14).

Note that Yangzijiang Shipbuilding (SGX:BS6) is exclude form the table as the Group generates much international revenue, with the share price of the stock taking recent cues from the USD/CNY.

See also:
• SGX Market Fund Flow Summary
• SGX Market Fund Flow By Sector
• SGX Market Turnover Statistics