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.

Equity Bottom-Up

<ul><li>Just over 40 Singapore-listed stocks that posted price gains over the past year, maintain single-digit P/E ratios and double-digit ROEs.</li><li>Aside from Singapore Airlines, the most traded stocks of the cohort over the past 5 weeks were Geo Energy Res, Golden Agri, Food Empire, TJ DaRenTang, Valuetronics, Marco Polo Marine, Ley Choon, Bumitama Agri and Stamford Land.</li><li>Among these stocks, Golden Agri, Food Empire, TJ DaRenTang, Bumitama Agri are currently trading below their Consensus Estimate Target Prices.</li></ul>

Just over 40 Singapore-listed stocks that posted price gains over the past year, maintain single-digit P/E ratios and double-digit ROEs.Aside from Singapore Airlines, the most traded stocks of the cohort over the past 5 weeks were Geo Energy Res, Golden Agri, Food Empire, TJ DaRenTang, Valuetronics, Marco Polo Marine, Ley Choon, Bumitama Agri and Stamford Land.Among these stocks, Golden Agri, Food Empire, TJ DaRenTang, Bumitama Agri are currently trading below their Consensus Estimate Target Prices.

Singapore’s Most Defensive High ROE & Low P/E Stocks Over Past Year

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The review period for a global index commenced last week and will run through this week as well.</li>
<li>The announcement of the changes for the LQ45 Index should be announced in the coming week and will be implemented at the close on 31 January.</li>
<li>Huge inflows to <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> trackers during the week while there was a big outflow from <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong (2800 HK)</a>. </li>
</ul>


The review period for a global index commenced last week and will run through this week as well.
The announcement of the changes for the LQ45 Index should be announced in the coming week and will be implemented at the close on 31 January.
Huge inflows to CSI 300 Index trackers during the week while there was a big outflow from Tracker Fund of Hong Kong (2800 HK). 


Index Rebalance & ETF Flow Recap: ASX, KS200, KQ150, HSIII, STTF, L&F, Costa Group, Japan, Bud APAC

<ul>
<li>
<a href="https://www.smartkarma.com/entities/emperador-inc-1be53f2f-f106-4f4f-b9be-5cf1341e76ae" target="_blank" data-smartkarma-citation="entities:36111:1" rel="noopener">Emperador (EMI SP)</a> currently fails the liquidity test and could be removed from the <a href="https://www.smartkarma.com/entities/spdr-straits-times-index-etf" target="_blank" data-smartkarma-citation="entities:35880:1" rel="noopener">SPDR Straits Times Index ETF (STTF SP)</a> in March.</li>
<li>
<a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870:1" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> is currently the highest ranked non-constituent and could be added to the ETF. FCT has a 6% higher market cap compared to <a href="https://www.smartkarma.com/entities/olam-group" target="_blank" data-smartkarma-citation="entities:765:1" rel="noopener">Olam (OLG SP)</a>.</li>
<li>We estimate trackers will need to buy 5 days of ADV in <a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870:1" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> and sell over 37 days of ADV in <a href="https://www.smartkarma.com/entities/emperador-inc-1be53f2f-f106-4f4f-b9be-5cf1341e76ae" target="_blank" data-smartkarma-citation="entities:36111:1" rel="noopener">Emperador (EMI SP)</a>. </li>
</ul>



Emperador (EMI SP) currently fails the liquidity test and could be removed from the SPDR Straits Times Index ETF (STTF SP) in March.

Frasers Centrepoint Trust (FCT SP) is currently the highest ranked non-constituent and could be added to the ETF. FCT has a 6% higher market cap compared to Olam (OLG SP).
We estimate trackers will need to buy 5 days of ADV in Frasers Centrepoint Trust (FCT SP) and sell over 37 days of ADV in Emperador (EMI SP). 


STTF Rebalance Preview: One Potential Change in March

Independent Analyst

Niklas Olausson

Thematic (Sector/Industry)

<ul>
<li>The El Nino is progressing, albeit slowly, in a volatile fashion. There is no significant impact yet on Southeast Asia's oil palm areas although YTD, rainfall is already lower YoY. </li>
<li>For edible oils, heat waves and drought continue to underpin elevated yield risks, with current focus on soybeans (U.S. and China), rapeseed (Canada) and olive oil (the Mediterranean.) </li>
<li>The Plantation sector and CPO price have gained some traction, but it is early days. Maintain a bullish stance. Report contains new data on earnings mixes, maturity profiles and yields.   </li>
</ul>


The El Nino is progressing, albeit slowly, in a volatile fashion. There is no significant impact yet on Southeast Asia's oil palm areas although YTD, rainfall is already lower YoY. 
For edible oils, heat waves and drought continue to underpin elevated yield risks, with current focus on soybeans (U.S. and China), rapeseed (Canada) and olive oil (the Mediterranean.) 
The Plantation sector and CPO price have gained some traction, but it is early days. Maintain a bullish stance. Report contains new data on earnings mixes, maturity profiles and yields.   


Southeast Asia Plantations: Where Things Stand with the Weather, Still Bullish

<ul><li>Global consumer non-cyclical stocks have ranked among the three most strongest performing sectors since the global spotlight on US regional banks began on 9 March through to 5 May.</li><li>At the same time, the consumer cyclical sector has ranked among the three most strongest performing sectors since the beginning of 2023.</li><li>Over the past 17 weeks, Golden Agri-Resources ranked as Singapore’s fifth most traded consumer stock while booking the tenth highest net institutional inflow across the Singapore stock market and generating a 6% total return.</li></ul>

Global consumer non-cyclical stocks have ranked among the three most strongest performing sectors since the global spotlight on US regional banks began on 9 March through to 5 May.At the same time, the consumer cyclical sector has ranked among the three most strongest performing sectors since the beginning of 2023.Over the past 17 weeks, Golden Agri-Resources ranked as Singapore’s fifth most traded consumer stock while booking the tenth highest net institutional inflow across the Singapore stock market and generating a 6% total return.

Singapore

Golden Agri-Resources Limited cultivates, harvests, processes, distributes, and sells crude palm oil and palm kernel.  The Company also refines crude palm oil into cooking oil, margarine, and shortening for sale and distribution.

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Golden Agri Resources (GGR SP)

Singapore’s Most Defensive High ROE & Low P/E Stocks Over Past Year

Just over 40 Singapore-listed stocks that posted price gains over the past year, maintain single-digit P/E ratios and double-digit ROEs. Aside...

Singapore Exchange Ltd (SGX)

Index Rebalance & ETF Flow Recap: ASX, KS200, KQ150, HSIII, STTF, L&F, Costa Group, Japan, Bud APAC

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

STTF Rebalance Preview: One Potential Change in March

Emperador currently fails liquidity and could be deleted from the STTF in March. Frasers Centrepoint Trust (FCT) is a potential inclusion. There is...

Brian Freitas

Southeast Asia Plantations: Where Things Stand with the Weather, Still Bullish

The El Nino is progressing slowly, but for edible oils, heat waves around the world continue to elevate near-term yield risks. Maintain bullish...

Niklas Olausson

Recent Consumer Sector Highlights

Global consumer non-cyclical stocks have ranked among the three most strongest performing sectors since the global spotlight on US regional banks...

Singapore Exchange Ltd (SGX)

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