It’s a Wrap: The Top 3 and Bottom 3 Straits Times Index Stocks for March
The Straits Times Index (SGX: ^STI), which tracks the performance of the 30 largest and most liquid companies listed in Singapore, declined in March. For the month, the local stock market benchmark slumped by 2.6% to 3,428 points. Of the 30 index components, seven were in the green while 23 were in the red.
The top three winners within the STI in March were CapitaLand Commercial Trust (SGX: C61U), Singapore Technologies Engineering Ltd (SGX: S63), and CapitaLand Mall Trust (SGX: C38U).Source: S&P Global Market Intelligence
In the middle of March, the trustee-manager of RCS Trust, an unlisted special purpose sub-trust that is 60%-owned by CapitaLand Commercial Trust and 40%-owned by CapitaLand Mall Trust, had issued S$275 million worth of fixed rate notes to investors under a US$2 billion Euro medium-term note programme. RCS Trust owns Raffles City Singapore, an integrated property consisting of Raffles City Tower, Raffles City Shopping Centre, two hotels, and a convention centre.
The notes will mature on or about 14 March 2025, and will bear interest at a rate of 3.2% per year, payable semi-annually. The proceeds from issuing the notes would be used to refinance the existing borrowings of RCS Trust and its subsidiaries, to pay for any asset enhancement works, and for working capital purposes.
As of 31 December 2017, CapitaLand Commercial Trust’s aggregate leverage stood at 37.3% while that of CapitaLand Mall Trust was 34.2%.
Defence group, Singapore Technologies Engineering, released its annual report for 2017, titled Engineering Your Future, near the end of March. In an article he published today, my Foolish colleague, Lawrence Nga, gave a quick snippet of what he learnt about the company’s growth drivers from reading the annual report. You can find the article here.
On the other hand, the top three losers within the index were Hutchison Port Holdings Trust (SGX: NS8U), Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6), and StarHub Ltd (SGX: CC3). Source: S&P Global Market Intelligence (stock price for Hutchison Port has been converted to Singapore dollars from US dollars)
In 2017, Hutchison Port’s revenue and other income declined by 3% to HK$11.55 billion. Net profit attributable to unitholders was HK$944.2 million, 30% below that of 2016. Consequently, the business trust’s distribution per unit (DPU) for 2017 came in at 20.60 HK cents, down by some 32.6% from 30.60 HK cents in 2016.
Unlike Hutchison Port, Yangzijiang had a robust 2017 in which its net profit surged by 67% to RMB 2.93 billion. This came on the back of a 27% rise in revenue to RMB 19.2 billion. The company’s core shipbuilding business experienced a 17% increase in revenue to RMB 12.3 billion. In 2017, the number of vessels delivered actually fell from 39 in 2016 to 33, but the 33 vessels delivered were container ships of higher value. Yangzijiang proposed a first and final dividend of 4.5 Singapore cents per share for 2017, up from 4.0 cents a year ago.
StarHub’s profit for 2017 sank by 27.1% to S$249 million even though its total revenue had inched up 0.2% to S$2.4 billion. In what might be a bid to diversify its revenue sources, the telco recently partnered Sunseap, a Singapore-based sustainable energy firm, to offer clean energy to residents in Jurong starting this month.
Howie Lau, the chief marketing officer of StarHub, said:
“Working together with Sunseap, we are excited to offer households a compelling way to live a lower carbon footprint lifestyle using the Sun’s energy. Leveraging each other’s expertise, we will bundle essential services from mobile, pay TV, broadband and electricity in attractive packages for customers, who are becoming more environmentally-aware.”
He added that clean energy has been gaining traction in Singapore, and that the company hopes to further boost this green movement with the launch of the StarHub Clean Energy Fund, which will be used to drive environmental conservation initiatives. StarHub has committed 5% of its profits from the clean energy business to be channelled to the fund in the first three years. It would be interesting to watch the new business’s level of contributions to StarHub’s bottom-line in the years ahead.
The SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of the Straits Times Index, had a trailing price-to-earnings ratio of 11.4 and a dividend yield of 2.9%, as of 29 March 2018.