The STI has generated a 14.5% YTD dividend inclusive return, with Yangzijiang Shipbuilding Holdings (which joined the STI in September 2015) the strongest of the 30 STI constituents.
The strongest STI Sector in the YTD has been Real Estate Management & Development – with Global Logistic Properties, City Developments, CapitaLand, UOL Group and Hongkong Land Holdings averaging 24.5% total returns.
STI ETF units that follow the performance of the STI, while also mirroring any changes to STI constituents, have been available to Investors over the past 15 years. Since the SPDR® STI ETF was introduced in April 2002, the STI has generated a total return close to 200%.
The Straits Times Index (STI) has been providing an on-going performance benchmark for the stock market since the beginning of 1967. This was in the form of the Straits Times Industrials Ordinary Share Index, which then measured the price moves of industrial stocks. The Index was regularly illustrated in the Business Times which was then a Commercial and Financial Section within the Straits Times. Five years on from the base price of 100 on 30 December 1966, Singapore was well into its export promotion phase and the Straits Times Industrials Ordinary Share Index had reached 200.
The modern day form of the STI is very different to Straits Times Industrials Ordinary Share Index, which pre-dated the formation of the Stock Exchange of Singapore (SES) in 1973. However significant economic lineage remains a key strength of the STI. The foundations of the current 30 STI stocks span as many as three centuries – from the Jardine Matheson Group in the 1880s to Hutchinson Port Holdings Trust in the 2010s. The STI also spans well-established local businesses like City Developments which listed in 1963, and key regional plays like Golden-Agri Resources, which was founded 33 years later.
|STI – Free Float Diversity by Business Sectors
|STI – Free Float Weighted Revenue Reach
Source: SGX, Bloomberg, Company Annual Reports, All Sectors based on GICS ® Categorisations
Indicative Sector weightings and geographical revenue exposures of the STI are illustrated above. The geographical revenue reach of the STI exemplifies the diversified exposure of the Index that spans Singapore-focused business to the businesses that are engrained in the developing growth of Asia.
The segment of the stock market that has made the most recent impact on the STI are the Real Estate Investment Trusts (REITs) – of which three are included in the STI, with the added relevance of three REITs now a part of the five-stock STI Reserve List. As EY noted in its Global IPO Trends: Q1 2017 Report, SGX continues to be the preferred choice for REITS and business trusts, underscoring investors’ preference and appetite for yield-based products in Singapore.
The STI has also consistently maintained one of the highest dividend yields across Asia with the yield at 3.4% as of the end of April 2017. This compared to an average of 2.5% for the FTSE Indices of China, Japan, India, Hong Kong, Indonesia, Malaysia and Thailand.
Another key development for the STI over the past 15 years has been the listing of STI Exchange Traded Funds (ETFs) which have made the STI Investable. The SPDR® STI ETF listed in April 2002 and over the ensuing 15 years, the STI outpaced the region’s performance as illustrated below.
15yr % Returns (Dividend-inclusive & in SGD)
Source: SGX My Gateway, Bloomberg (Monthly Data from April 2002 to April 2017)
While the STI generated a 283% total return in US Dollar terms, the total dividend-inclusive return in Singapore Dollar (SGD) terms was close to 200%, at 195%.
STI ETFs that follow the performance of the STI benchmark have provided access to these returns, while also mirroring the changes to STI constituents over the years. Hence by including STI ETFs in their portfolios, investors will automatically have exposure to the 30 biggest active Singapore stocks, which can change over time.
Investors can now also choose to dollar cost average the ETFs that track the STI via Maybank Kim Eng, OCBC Bank, Phillip Capital and POSB Regular Shares Savings (RSS) Plans. Click here for more information on how investors commit fixed amount of money every month to invest in these plans.
Recent STI Constituent Changes
Since the beginning of 2010, the STI has seen 11 new inclusions. Of the 11 stocks, nine are still are part of the STI – with one of the nine, Jardine Matheson Holdings, a re-entrant. The 11 stocks have averaged 34.7% total returns from the respective announced inclusions to 12 May 2017. These were discussed in more detail a recent SGX My Gateway Report here. As tabled below, 10 of the stocks are still listed, while CapitaMalls Asia which was included in the STI on 22 March 2010 is now a wholly owned unit of CapitaLand.
|Name||SGX Code||Market Cap S$M||Ann’ment Joining STI Date||Join STI Date||Price on Ann’ment $||Price Change %||Total Return %|
|Jardine Matheson Hldgs||J36||67,248||1-Sep-16||19-Sep-16||60.000||8.9||14.5|
|CapitaLand Commercial Trust||C61U||4,826||3-Mar-16||21-Mar-16||1.415||14.8||21.8|
|Yangzijiang Shipbuilding Hldgs||BS6||4,733||3-Sep-15||21-Sep-15||1.060||16.5||22.2|
|Hutchison Port Hldgs Trust||NS8U||4,905||25-Mar-13||3-Apr-13||0.840||-52.4||-24.9|
|Global Logistic Properties||MC0||13,499||10-Mar-11||21-Mar-11||1.960||46.9||62.3|
Note of the 11 stocks tabled above, nine remain in the STI, with IHH Healthcare Berhad omitted in 2013 and CapitaMalls Asia becoming a wholly owned unit of CapitaLand in 2014. Source: SGX, Bloomberg & SGX StockFacts (data as of 12 May 2017).
The best performer of the STI inclusions since 2010 was Thai Beverage PCL and the least performer was Hutchison Port Trust Holdings. As discussed in the South China Morning Post in April (click here), benchmark inclusions do not necessarily coincide with positive returns.
Recent Constituent Performances
As illustrated above the STI had generated a 195% SGD total return over the past 15 years. The STI has also been a comparatively strong performer in the shorter term with a 14.5% SGD total return in the 2017 year through to 12 May.
In the YTD Yangzijiang Shipbuilding Holdings has been the strongest of the 30 STI constituents. The shipbuilder with an outstanding order book ranking of #1 in China and #4 in the World recently celebrated 10 years of listing on SGX. The five next best YTD STI performers consisted of four Real Estate Developers and Genting Singapore.
Share prices of Singapore-focused Real Estate Developers firmed following the Singapore Government’s 10 March 2017 announcement on the relaxation of some cooling measures in the Singapore residential market. Real Estate Developers with exposure to China have also performed comparatively well on the firmer performance of Mainland property markets. Together, Global Logistic Properties, City Developments, CapitaLand, UOL Group and Hongkong Land Holdings have averaged 26.3% YTD total returns, bringing their average five year total returns to 54.2%.
The performances of the 30 stocks are tabled below. The STI Sector which performed the strongest over the five years was the Banks with the three stocks averaging a 57.8% total return.
|Name||SGX Code||Market Cap S$M||Total Return YTD %||Total Return 5 Yr %||Dvd Ind Yld %||GICS Sector Name|
|Jardine Matheson Holdings||J36||67,248||16.8||70.8||2.3||Industrials|
|Singapore Telecommunications||Z74||60,580||1.6||43.0||4.7||Telecommunication Services|
|DBS Group Holdings||D05||52,582||21.0||76.4||2.9||Financials|
|Oversea-Chinese Banking Corp||O39||44,125||18.3||42.5||3.4||Financials|
|United Overseas Bank||U11||38,610||17.5||54.5||3.0||Financials|
|Hongkong Land Holdings||H78||25,206||18.9||63.7||2.5||Real Estate|
|Thai Beverage PCL||Y92||22,222||6.1||224.8||2.7||Consumer Staples|
|Wilmar International||F34||23,768||5.9||1.0||1.7||Consumer Staples|
|Jardine Cycle & Carriage||C07||18,375||12.8||19.1||2.2||Consumer Discretionary|
|Global Logistic Properties||MC0||13,499||30.9||64.4||2.1||Real Estate|
|Genting Singapore||G13||12,987||21.0||-28.6||2.8||Consumer Discretionary|
|Singapore Technologies Engineering||S63||11,688||19.2||51.2||4.0||Industrials|
|City Developments||C09||9,620||29.2||11.9||0.8||Real Estate|
|Ascendas REIT||A17U||7,469||17.8||70.7||6.4||Real Estate|
|CapitaLand Mall Trust||C38U||6,913||6.4||42.1||5.6||Real Estate|
|UOL Group||U14||5,691||20.5||77.0||2.1||Real Estate|
|Singapore Press Holdings||T39||5,405||-2.5||19.0||4.1||Consumer Discretionary|
|Hutchison Port Holdings Trust||NS8U||4,905||-5.8||-9.7||10.7||Industrials|
|CapitaLand Commercial Trust||C61U||4,826||13.2||64.0||5.8||Real Estate|
|Yangzijiang Shipbuilding Holdings||BS6||4,733||51.5||44.3||3.2||Industrials|
|Golden Agri-Resources||E5H||4,776||-11.3||-41.5||1.7||Consumer Staples|
|SIA Engineering Co||S59||4,401||16.6||19.7||3.3||Industrials|
Source: SGX, Bloomberg & SGX StockFacts (data as of 12 May 2017)
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