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Straits Times Index ahead of the region in 2014 YTD

As of Friday, Japan's Nikkei 225 had declined as much as 11.2% and Hong Kong's China H-Share Index had declined as much as 10.8% in the year-to-date. The Hang Seng Index declined 7.2% over the timeframe while the Straits Times Index (STI) had declined 4.9%. Like the better relative performances, volatility of the STI was almost two-thirds less of the Nikkei 225 levels and almost half as much as the China H-share levels. Performances of the 30 STI stocks have been varied, from some stocks posting year-to-date gains to some stocks declining almost as much as the Nikkei 225 and China H-Share Index.

The 30 constituents of the STI varied significantly in individual performance. Like the index decline, the average return of the 30 constituents was a decline of 4.7% in the year-to-date. A total of 17 stocks declined less than 4.7% and two stocks, Hongkong Land and Jardine Matheson Holdings have posted respective gains of 2.3% and 1.7%. Jardine Matheson Holdings is the largest capitalised representative of the Industrials stock in the STI, while Hongkong Land is the fourth largest capitalised financials stock. Hongkong Land is also a member of the Jardine Matheson Group and the largest capitalised representative of the Real Estate sector in the STI. While the revenue focus of these two companies is not necessarily Singapore, the majority of the revenue of the two companies is reported in the Asia Pacific.

Looking at the performance in relation to the regional level, on average as much as 84% of the geographically reported revenue associated with the 30 STI companies is in the Asia Pacific. The 18 STI companies that reported more than 90% of their last FY revenue in the Asia Pacific have averaged a 3.2% decline. Weighing the performances of 18 companies in accordance with their full market capitalisation reveals the 18 companies, as a capitalised group, declined 3.5% in the year-to-date. This is about three-fifths of the 5.7% decline generated by the MSCI Asia Pacific Index over the same timeframe. The MSCI Asia Pacific Index is expressed in USD versus the SGD denomination of the majority of the 18 relevant STI companies. Coinciding with Singapore's more defensive performance have been the ongoing gradual and moderate gains of the Singapore Dollar (SGD) - which has firmed by 0.4% to the US Dollar in the year-to-date, versus the Bloomberg JP Morgan Asia Dollar Index which has declined 0.6% to the US Dollar. The Singapore Fixed Income Index (SFI), which is also denominated in SGD has gained 1.0% over the period.

The 30 STI components and year-to-date returns, indicative dividend yields and reported share of Asia Pacific revenue are detailed in the table below.

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Geoff Howie
Geoff Howie

Mr Howie is the Singapore Exchange’s Market Strategist - and the key contributor to the educational content and market insights of SGX My Gateway. He is also part of the Associate Faculty at SIM University,  educating students on the fundamentals of investing. 

He previously held lead broking and strategist roles across the Asia Pacific offices of a large international futures broker. Outside of his 15 year career in the financial markets he has also served as the Treasury Adviser to the Leader of the Queensland Liberal Party in Queensland Parliament.

Following High School in Hong Kong, he attended University of Queensland, receiving a Bachelors and Master’s degree in Economics, the latter extending into deferred PhD work after receiving the highest grading for first-mover research and modelling conducted on the Shanghai economy.

Mr Howie’s other notable achievements include receiving two Hong Kong Securities Institute Outstanding Achievers awards for the 2005 year.