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2016 – a Solid Year for STI Consumer Stocks

By Geoff Howie

2016 – a Solid Year for STI Consumer Stocks

In 2016, the five best-performing constituents of the Straits Times Index (STI) were SATS, Golden Agri-Resources, Thai Beverage, Wilmar International and Genting Singapore. These five stocks represent all three of the STI’s Consumer Staples plays as well as a Consumer Discretionary play, while SATS also has a significant consumer-facing business. Together, these five stocks averaged a 26.5% total return in 2016.

As tabled below, the stock with the most momentum throughout the 2016 year was Wilmar International, which generated gains over the last month, last three months, last six months and the last year. To see more details on each stock in SGX StockFacts, click on the stock names within the table.

Five Strongest STI Stocks of 2016 SGX Code Total Return Dec 2016 % 3M Total Return % 6M Total Return % Total Return 2016 %
SATS S58 0.8 -1.4 22.3 30.9
Golden Agri-Resources E5H 0.0 21.1 22.9 28.0
Thai Beverage Y92 -2.9 -12.4 -5.9 27.2
Wilmar International F34 2.0 11.5 11.0 25.0
Genting Singapore G13 -6.7 22.6 26.8 21.6

Source: SGX StockFacts, SGX and Bloomberg (data as of 30 December 2016)

In 2015, the five strongest STI stocks were SATS, ComfortDelGro Corporation, Hongkong Land Holdings, CapitaLand and Ascendas Real Estate Investment Trust. In the following year, those five stocks averaged a 1.4% total return, with two gainers and three decliners for 2016.

The STI’s five strongest constituents in 2014 did better in 2016, with four of those stocks – SATS, Jardine Matheson Holdings, Thai Beverage PCL and DBS Group Holdings – still part of the STI and averaging a 21.3% total return in 2016. The best STI performer of 2014 – Olam International – has since been omitted from the STI, and generated a 12.2% total return in 2016. The performances of the 30 STI stocks in 2016 are tabled below.

30 STI Stocks SGX Code Total Return Dec 2016 % 3M Total Return % 6M Total Return % Total Return 2016 %
Singapore Telecommunications Z74 -1.7 -6.4 -7.6 4.0
Jardine Matheson Hldgs J36 2.9 -3.3 2.3 18.8
DBS Group Hldgs D05 -1.2 12.7 12.2 8.1
Oversea-Chinese Banking Corp O39 -1.8 3.1 4.9 5.6
United Overseas Bank U11 0.0 8.3 12.9 8.1
Wilmar International F34 2.0 11.5 11.0 25.0
Hongkong Land Hldgs H78 -0.3 -5.4 12.5 -4.8
Thai Beverage Y92 -2.9 -12.4 -5.9 27.2
Jardine Cycle & Carriage C07 2.7 -3.7 13.6 21.5
CapitaLand C31 -1.9 -5.6 -1.6 -7.2
Singapore Airlines C6L -3.3 -7.1 -5.4 -10.0
Genting Singapore G13 -6.7 22.6 26.8 21.6
Keppel Corp BN4 6.2 7.4 6.8 -6.3
Global Logistic Properties MC0 6.8 17.6 25.8 5.6
Singapore Tech Engineering S63 -4.4 0.0 4.1 12.3
Singapore Exchange S68 -1.9 -2.7 -3.7 -3.4
City Developments C09 -1.9 -8.7 2.2 10.3
CapitaLand Mall Trust C38U -3.3 -12.0 -9.2 3.0
Ascendas REIT A17U -3.4 -9.1 -5.5 4.6
Singapore Press Hldgs T39 -3.0 -4.6 -8.0 -6.1
Hutchison Port Hldgs Trust NS8U 4.6 3.7 6.5 -7.9
Golden Agri-Resources E5H 0.0 21.1 22.9 28.0
SATS S58 0.8 -1.4 22.3 30.9
ComfortDelGro Corp C52 -2.0 -12.1 -8.8 -16.3
Sembcorp Industries U96 5.6 10.0 2.6 -3.3
StarHub CC3 -2.4 -16.8 -23.7 -19.5
UOL Group U14 1.5 6.8 9.7 -1.5
CapitaLand Commercial Trust C61U -3.3 -6.9 3.2 16.6
SIA Engineering Company S59 -1.2 -8.1 -5.4 -5.9
Yangzijiang Shipbuilding BS6 -0.6 8.7 -8.9 -22.3
Average -0.5 0.2 3.6 4.6

Source: SGX, Bloomberg & SGX StockFacts (data as of 30 December 2016)

The five least-performing stocks of the STI in 2016 were Yangzijiang Shipbuilding, StarHub, ComfortDelGro Corp, Singapore Airlines and Hutchison Port Holdings Trust. Together, these five stocks averaged a 15.2% decline in total return. The five stocks that ended 2016 with the lowest price-to-book (P/B) ratios included Hutchison Port Hldgs Trust and Yangzijiang Shipbuilding, in addition to Hongkong Land Holdings, UOL Group and Jardine Matheson Holdings.

The P/B ratio is used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. The ratio is a common gauge used by investors to determine whether a firm may be undervalued (below 1.0) or overvalued (above 1.0). It also gives investor a sense of how much he/she is paying for the leftover assets in the event of a bankruptcy. The frequency of net asset valuations, additional capital raisings and unit prices are predominant drivers of the P/B ratio.

The five STI stocks which ended the year with the highest indicative dividend yield were Hutchison Port Holdings Trust, StarHub, CapitaLand Mall Trust, CapitaLand Commercial Trust and Yangzijiang Shipbuilding. Three of these were also amongst the five least-performing STI stocks of last year, while CapitaLand Mall Trust and CapitaLand Commercial Trust averaged a 9.8% gain in 2016. The trio of REITs in the STI, which includes Ascendas REIT, averaged an 8.1% total return in 2016.

Sectors, indicative dividend yields and price to book ratios of the 30 STI stocks as at the end of 2016 are tabled below. As in the above tables, to see more details on each stock in SGX StockFacts, click on the stock names within the table.

Name SGX Code GICS® Sector Name Market Cap in S$M Dvd Ind Yld % P/B
Singapore Telecommunications Z74 Telecommunication Services 59,601 4.8 2.3
Jardine Matheson Hldgs J36 Industrials 57,239 2.6 0.8
DBS Group Hldgs D05 Financials 43,996 3.5 1.0
Oversea-Chinese Banking Corp O39 Financials 37,310 4.0 1.1
United Overseas Bank U11 Financials 33,376 3.4 1.1
Wilmar International F34 Consumer Staples 22,677 2.2 1.1
Hongkong Land Hldgs H78 Real Estate 21,601 3.0 0.5
Thai Beverage Y92 Consumer Staples 21,344 2.7 4.4
Jardine Cycle & Carriage C07 Consumer Discretionary 16,296 2.3 2.0
CapitaLand C31 Real Estate 12,797 3.0 0.8
Singapore Airlines C6L Industrials 11,425 4.6 0.9
Genting Singapore G13 Consumer Discretionary 10,873 1.7 1.5
Keppel Corp BN4 Industrials 10,510 5.2 0.9
Global Logistic Properties MC0 Real Estate 10,311 2.7 0.8
Singapore Tech Engineering S63 Industrials 10,041 3.1 5.1
Singapore Exchange S68 Financials 7,666 3.9 8.7
City Developments C09 Real Estate 7,529 1.0 0.8
CapitaLand Mall Trust C38U Real Estate 6,679 5.9 1.0
Ascendas REIT A17U Real Estate 6,453 2.0 1.1
Singapore Press Hldgs T39 Consumer Discretionary 5,642 4.2 1.6
Hutchison Port Hldgs Trust NS8U Industrials 5,496 8.3 0.7
Golden Agri-Resources E5H Consumer Staples 5,476 1.2 0.9
SATS S58 Industrials 5,404 3.3 3.5
ComfortDelGro Corp C52 Industrials 5,327 3.7 2.2
Sembcorp Industries U96 Industrials 5,089 3.5 0.9
StarHub CC3 Telecommunication Services 4,855 7.1 21.2
UOL Group U14 Real Estate 4,820 2.5 0.6
CapitaLand Commercial Trust C61U Real Estate 4,386 5.9 0.8
SIA Engineering Company S59 Industrials 3,776 3.6 2.5
Yangzijiang Shipbuilding BS6 Industrials 3,123 5.5 0.7
Average 3.7 2.4

Source: SGX, Bloomberg & SGX StockFacts (data as of 30 December 2016). Note - StarHub’s price-to-book ratio of 21.2 is highest among all the STI stocks. This is partly due to shareholders’ equity at the listed company level being higher than the group level due to the adoption of merger accounting in July 2002, when the shares of cable TV provider, SCV, were acquired and consolidated into the StarHub Group.

The STI stocks averaged a 4.6% total return in 2016, 0.8% higher than the total return of the Index in its weighted form, which implies the smaller index weights performed better in 2016 than the bigger index weights. As an Index, the STI generated a 3.8% total return in 2016, bringing its five-year annualised total return to 5.1%.

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.