SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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SGX’s 20 Biggest China-Related Enterprises Returned 39.8% in YTD

20 Largest China Plays Returned 27% in the YTD

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

China Aviation Oil Singapore Corp / Equity Bottom-Up

China Aviation Oil (Singapore) Corporation (CAO) has made good progress in the first half of the year, benefiting from favourable volume growth offset to a degree by FX and the non-recurrence of positive stock valuation. Trading conditions look more challenging in the second half with the jet fuel market having moved into backwardation since early July. We are thus taking a much more cautious view on the second half and have reduced our forecasts accordingly. It is important to recognise that cash generation has been far stronger than expected and should remain favourable in H2 as inventory is released and the main associate dividend is received. Thus, our fair value actually increases to US$1.55 (S$2.11) per share from US$1.45 (S$2.04) as a result.

China Aviation Oil (Singapore) Corporation (CAO) has made good progress in the first half of the year, benefiting from favourable volume growth offset to a degree by FX and the non-recurrence of positive stock valuation. Trading conditions look more challenging in the second half with the jet fuel market having moved into backwardation since early July. We are thus taking a much more cautious view on the second half and have reduced our forecasts accordingly. It is important to recognise that cash generation has been far stronger than expected and should remain favourable in H2 as inventory is released and the main associate dividend is received. Thus, our fair value actually increases to US$1.55 (S$2.11) per share from US$1.45 (S$2.04) as a result.

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul><li>Low price volatility versus the Singaporean market, low debt levels, and good price momentum relative to its sector </li><li>As sole import license holder, CAO supplies 30-40% of China’s jet fuel. As imported jet fuel is only allowed for outbound flights, CAO can be viewed as a proxy for China’s international air travel; up by 32% in 2016 </li><li>CAO is currently invested in five entities, including storage, pipelines and refueling facilities. With net cash of US$226m, it is well positioned to create further value through investments </li><li>Attractive at 17CE* 9.6% ROE/PB versus Asian Energy at 8.2% </li><li>Risks: Increase in oil prices, geopolitical uncertainties that could have an impact on global air traffic</li></ul>* Consensus Estimates

Low price volatility versus the Singaporean market, low debt levels, and good price momentum relative to its sector As sole import license holder, CAO supplies 30-40% of China’s jet fuel. As imported jet fuel is only allowed for outbound flights, CAO can be viewed as a proxy for China’s international air travel; up by 32% in 2016 CAO is currently invested in five entities, including storage, pipelines and refueling facilities. With net cash of US$226m, it is well positioned to create further value through investments Attractive at 17CE* 9.6% ROE/PB versus Asian Energy at 8.2% Risks: Increase in oil prices, geopolitical uncertainties that could have an impact on global air traffic* Consensus Estimates

CAO: Climbing China Air Travel Fuels Profitability

Singapore

China Aviation Oil Singapore Corporation Limited supplies jet fuel to foreign and domestic airlines flying through China's airports.  The Company also trades in other oil products such as fuel oil, gas oil, crude oil, petrochemical products, including physical and paper swaps, and futures trading.

China Aviation Oil Singapore Corp (CAO SP)

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China Aviation Oil Singapore Corp (CAO SP)

20 Largest China Plays Returned 27% in the YTD

Singapore Exchange Ltd (SGX)

FTSE ST China Index up 18% in 2017 YTD

Singapore Exchange Ltd (SGX)

Progress in a backward market

China Aviation Oil (Singapore) Corporation (CAO) has made good progress in the first half of the year, benefiting from favourable volume growth...

Edison Investment Research

CAO: Climbing China Air Travel Fuels Profitability

Low price volatility versus the Singaporean market, low debt levels, andgood price momentum relative to its sector As sole import license holder,...

A. Stotz Investment Research

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