The constituents of the benchmark STI are expected to report their latest quarterly or full-year results in the coming weeks. The STI has generated total returns of -6.5% and 9.6% in 2018 and in the 2019 YTD respectively. With a combined market capitalisation of S$535 billion, the 30 constituents of the index have averaged Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios of 18.9x and 1.9x respectively.
SPH REIT kick-started the latest quarterly reporting season for S-REITs earlier this month with the release of its fiscal second quarter results ended 28 February 2019. This was followed by First REIT and Keppel DC REIT, which unveiled their results last week and yesterday respectively. Soilbuild Business Space REIT will announce its results today. The rest of the S-REITs and Business Trusts are expected to release their earnings over the next few weeks.
Real Estate Developers (excluding REITs) was the 3rd best-performing sector in March, with a total return of +2.7%. March was also the 3rd straight month of positive returns for the sector, after it registered total returns of +0.7% and +7.8% in Feb and Jan respectively. In the 2019 YTD, the 5 best-performing, largest capitalised real estate developers were: Hong Fok (+34.6%), OUE (+23.8%), CapitaLand (+18.6%), Yanlord Land (+17.2%), and UOL Group (+16.0%).
Last week DBS, OCBC & UOB led the STI’s 3.4% gain, with the 3 banks averaging a 6.1% gain. This has brought the average 2019 YTD total return of the 3 banks to 8.6%, and their 5 year average annualised total return to 10.3%. Shareholders have been rewarded with the 3 banks maintaining an average dividend yield of 4.0% for the past 6 months, which represents the longest period of time in their recent history that their yields remained at or above the key 4.0% level.
In its January report, the World Gold Council said it expects increased market uncertainty, expansion of protectionist policies, and the Fed's more neutral monetary policy stance to make gold increasingly attractive to investors as an effective portfolio diversifier and hedge against systemic risk. SGX offers investors opportunities to participate in the gold sector through 3 mining stocks – CNMC Goldmine, Wilton Resources and Anchor Resources – and the SPDR Gold Shares ETF.
In March 2019, 27 SGX primary-listed stocks repurchased as many as 50 million shares with a total consideration of S$54 million. 5 stocks commenced new buyback mandates in the month of March 2019: Hong Fok Corporation, Kimly, Aspen (Group) Holdings, MDR & GRP. Relative to outstanding shares, Hong Fok Corporation bought back 0.77% of its shares during the month.
Analysts have noted revived investor interest in S-REITs since late last year, driven by a flight to safety amidst the uncertain outlook for US-Sino trade negotiations, the hunt for higher yields, and as global equity markets remained volatile. In the YTD, the five best-performing S-REITs were: Sasseur REIT (25.0%), Capitaland Retail China Trust (19.4%), Keppel-KBS US REIT (18.2%), Mapletree Logistics Trust (17.6%), and Mapletree North Asia Commercial Trust (17.6%).
The FTSE Value-Stocks ASEAN Index consists of 50 quality value stocks amongst liquid and tradable ASEAN companies listed on the Indonesia Stock Exchange, Bursa Malaysia, the Philippine Stock Exchange, Singapore Exchange and the Stock Exchange of Thailand. Of the 50 constituents, 10 are listed on SGX.
SGX's 10 largest OSV stocks, with a combined market cap of more than S$1 billion, have averaged a 30.9% price rebound from their 52W lows, in line with recent crude gains. The five that posted the strongest price rebound from their 12M troughs were: Amos Group (160.9%), Sinwa (57.9%), Vallianz (30.0%), Dyna-Mac (23.0%), and Baker Technology (9.2%).
China’s Belt and Road Initiative (BRI) is expected to bring many benefits to ASEAN as increased Chinese capital flows through infrastructure projects spanning ports, roads, railways and energy sectors. Apart from obvious beneficiaries such as EC World REIT and Yangzijiang Shipbuilding, there are at least 6 other small- to mid-cap SGX firms that have cited BRI as a growth impetus in their most recent annual reports. They are: Frasers Logistics and Industrial Trust, Tai Sin Electric, Vibrant Group, Hong Lai Huat, ASL Marine and Addvalue Technologies.
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