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

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Combined, the 10 most traded Catalist stocks in the 2020 year-to-14 Dec have seen more than S$50 million in turnover a day and include as many as five healthcare-related stocks – Medtecs, UG Healthcare, Biolidics, Clearbridge and Hyphens Pharma.  
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	<li>
After ending 2019 with a market value of S$20 million, Medtecs has averaged S$20 million in daily turnover in 2020. For its 9MFY20 (ended Sep 30), the personal protective equipment vendor reported a 1,442% increase in its gross profit. 
	 </li>
	<li>The most recent company to list on Catalist, Aedge Group, based in Singapore, provides engineering services (such as scaffolding, shelters &amp; grating), transport services (88 buses with capacities ranging from 10 to 45 seats), and security and manpower services.</li>
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Since the end of 2007, SGX has brought to the marketplace numerous start-up businesses through the Catalist board including the listing of professional service group, Aedge Group on 14 December. The professional services of Aedge currently spans three key industries: engineering, security and manpower and transport. The company maintains a network of customers that comprises government agencies, multi-national companies, government-linked companies and established large corporations. Aedge maintains a market capitalisation of S$20 million and price to sales ratio of 0.8x and closed on its first day of trading at 21.0 cents. There are more than 200 stocks listed for trading on the Catalist Board.

The 10 most traded Catalist stocks in the 2020 year (to 14 Dec) have all ranked among Singapore’s 100 most traded stocks by turnover, with the 10 Catalist stocks combined seeing more than S$50 million in turnover a day. As detailed in the table below, the 10 stocks (ranked by turnover) include as many as five healthcare-related stocks – Medtecs International (“Medtecs”), UG Healthcare, Biolidics, Clearbridge and Hyphens Pharma. The 10 stocks generated a median total return of 117% in the 2020 year (to 14 Dec) , which includes a median 11% decline since the global rotation from momentum to value stocks in the second week of November.

 

<table class="table table-striped"><tbody>
<tr>
<td>
			Top 10 Catalist-traded Stocks in 2020 YTD
			</td>
			<td>
			SGX 

			Code
			</td>
			<td>
			Mkt Cap 

			S$
			</td>
			<td>
			Nov 6 - 14 Dec Total Return %
			</td>
			<td>
			YTD Total Return %
			</td>
			<td>
			Price/Sales
			</td>
			<td>
			260 Day Volatility %
			</td>
		</tr>
<tr>
<td>
			Medtecs Intl
			</td>
			<td>
			546
			</td>
			<td>
			521,940,672
			</td>
			<td>
			-17
			</td>
			<td>
			2,491
			</td>
			<td>
			2.0
			</td>
			<td>
			167
			</td>
		</tr>
<tr>
<td>
			UG Healthcare
			</td>
			<td>
			8K7
			</td>
			<td>
			350,537,792
			</td>
			<td>
			-41
			</td>
			<td>
			1,124
			</td>
			<td>
			2.6
			</td>
			<td>
			147
			</td>
		</tr>
<tr>
<td>
			Rex Intl
			</td>
			<td>
			5WH
			</td>
			<td>
			200,557,440
			</td>
			<td>
			16
			</td>
			<td>
			-25
			</td>
			<td>
			10.3
			</td>
			<td>
			80
			</td>
		</tr>
<tr>
<td>
			Jiutian Chemical
			</td>
			<td>
			C8R
			</td>
			<td>
			141,179,520
			</td>
			<td>
			-38
			</td>
			<td>
			318
			</td>
			<td>
			0.7
			</td>
			<td>
			132
			</td>
		</tr>
<tr>
<td>
			Biolidics
			</td>
			<td>
			8YY
			</td>
			<td>
			79,214,096
			</td>
			<td>
			-3
			</td>
			<td>
			22
			</td>
			<td>
			10.9
			</td>
			<td>
			112
			</td>
		</tr>
<tr>
<td>
			Aspen
			</td>
			<td>
			1F3
			</td>
			<td>
			238,319,312
			</td>
			<td>
			-17
			</td>
			<td>
			178
			</td>
			<td>
			3.2
			</td>
			<td>
			263
			</td>
		</tr>
<tr>
<td>
			Clearbridge
			</td>
			<td>
			1H3
			</td>
			<td>
			87,115,384
			</td>
			<td>
			-5
			</td>
			<td>
			4
			</td>
			<td>
			2.4
			</td>
			<td>
			77
			</td>
		</tr>
<tr>
<td>
			Alset
			</td>
			<td>
			40V
			</td>
			<td>
			103,843,968
			</td>
			<td>
			6
			</td>
			<td>
			56
			</td>
			<td>
			6.8
			</td>
			<td>
			114
			</td>
		</tr>
<tr>
<td>
			V2Y Corp
			</td>
			<td>
			V2Y
			</td>
			<td>
			15,600,691
			</td>
			<td>
			91
			</td>
			<td>
			197
			</td>
			<td>
			0.3
			</td>
			<td>
			152
			</td>
		</tr>
<tr>
<td>
			Hyphens Pharma
			</td>
			<td>
			1J5
			</td>
			<td>
			93,133,424
			</td>
			<td>
			-23
			</td>
			<td>
			54
			</td>
			<td>
			0.7
			</td>
			<td>
			92
			</td>
		</tr>
<tr>
<td>
			Median
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			-11
			</td>
			<td>
			117
			</td>
			<td>
			3
			</td>
			<td>
			123
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			-3
			</td>
			<td>
			442
			</td>
			<td>
			4
			</td>
			<td>
			134
			</td>
		</tr>
</tbody></table>
Source: SGX StockFacts, Bloomberg, Reuters (Data as of 14 December 2020)

 

The strongest perfomer of the 10 stocks in the 2020 year (to 14 Dec) was Medtecs. 

UG Healthcare was the next best performer reporting its 1QFY21 (ended 30 Sep) revenue more than doubled year-on-year on 5 November, mainly due to higher volume of gloves sold and average selling prices on the back of stronger demand for disposable gloves and supply constraints (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/XZINZSWIGSX79HW2/8c4c259f215a42ec0abb196fea5ba05a39ed7e2f490435af854fa5d3c37dad7f">here</a> for more).

As reported on 11 November, Jiutian Chemical’s quarterly net profit for 3QFY20 (ended 30 Sep) soared 57% over 2QFY20 despite a 20-day routine maintenance shutdown in early September 2020. Jiutian Chemical’s 2QFY20 was already a record quarterly net profit since the Company was listed in 2006. With the results, the Chairman noted a surge in demand for its main products of Dimethylformamide and methylamine from downstream customers who in turn are experiencing strong growth in both local and export markets for their products, in addition to rising demand for its products from users in the lithium batteries and semiconductor sectors, which are experiencing strong and sustainable growth in China (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QTDXEXG54PC7J6TE/5c582e197a5e4db0169fc71a6bb3e42c24c9395f9da7163f510e23a41d397f80">here</a> for more).

Aspen (Group) Holdings achieved revenue of RM62.4 million as at 3QFY20 (ended 30 Sep), a RM 6.9 million increase in revenue compared to 2QFY20. The increase was contributed from additional units sold in Tri Pinnacle and Vervea, as well as the progressive construction of Beacon Executive Suites and Vertu Resort during Recovery Movement Control Order phase. Following the completion of placement by the Aspen (Group) Holdings on 18 November, the funds will be used mainly to fund the construction of Phase 1 of the glove manufacturing facility which is expected to be completed by 1QFY21 and the Group targets to commence production by 2Q21 to bring between 1.6-1.8 billion gloves annually to the market.

The strongest performer since November 8 when the US media called Joe Biden the Winner of the US Election, followed by the announcement of the Pfizer/BioNtech vaccine results, was V2Y Corporation. V2Y Corporation (formerly Synagie Corporation) has recently sold its e-commerce business while seeking opportunities to expand its InsurTech business.

Rex International has gained 16% between 6 November and 14 December, as the price of Brent Crude Oil rallied 26% in SGD terms. Since listing in July 2013, Rex International has achieved four offshore discoveries, one in Oman and three in Norway. The Group also offers Rex Virtual Drilling screening services to other oil exploration companies as an additional tool to increase the success rate of finding oil.

The operations of Alset (formerly Singapore eDevelopment) span operations comprise Property Development, Info-Tech Related, Investment and Biomedical Businesses as captured in an infographic (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/OOT6LPHW4UO3Y647/de1b67da46ccd7f0f90835aa6806de93965c594b7ee53d919c6821dcfa383237">here</a>) in the Business Times in early October. 

 

Medtecs was also the Most Traded Catalist Stock by Turnover in 2020 

For its 9MFY20 (ended 30 Sep), Medtecs reported a 1,442 per cent YoY increase in its gross profit. This was mostly attributed to the exporting of personal protective equipment (“PPE”) to over 30 countries in Southeast Asia, North Asia, US, Australia and Europe. Medtecs also serves as a one-stop vendor to hospitals, supplying PPE, workwear and medical consumables to more than 200 hospitals in Taiwan and the Philippines.

Looking forward the Group intends to increase its market share in the US by supplying locally manufactured facemasks starting in 1QFY21 while key growth markets in Asia Pacific such as Singapore, the Philippines and Taiwan remain. Medtecs is also aiming to increase productivity by systematically automating manufacturing processes and enhance employee training and education programs to remain competitive. Backed by Medtecs’ sustainable and scalable business model, built over the past 30 years, the Group maintains it is ready to embark on its next phase of growth, which is to be a global procurement platform for medical consumables and PPE. 

Other notable accolades this year include joining the MSCI Singapore Small Cap Index on Nov 30 and the board proposing to apply for a transfer from Catalist to the main board. On 18 November, Medtecs chief executive William Yang, who has over 10 years' experience in the textile industry, acquired one million shares of the company at an average price of 92.2 cents per share.

Catalist, the SGX sponsor-supervised board for growth companies, is now in its 13th year and home to 218 companies with a combined market capitalisation of S$11 billion. They come from geographical regions such as Singapore, Australia, Greater China, Indonesia, Israel, Japan, Malaysia, South Korea, Sweden and United Kingdom, across diverse sectors including Consumer, Technology, Healthcare, Energy and Industrials. With a view to expand their offerings and geographical footprint, these Catalist-listings provide accessibility in the capital formation process for comparatively new businesses.

At the same time the Catalist Board caters to the needs of fast-growing enterprises. Companies seeking a primary listing on the  Catalist Board must be brought to list by approved sponsors via an Initial Public Offering or a Reverse Takeover.  There are no quantitative entry criteria required by SGX. Instead, sponsors decide if the listing applicant is suitable to be listed using their house criteria. The quotation, trading and settlement of a stock listed on Catalist works the same way as a stock listed on the SGX Mainboard.
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Combined, the 10 most traded Catalist stocks in the 2020 year-to-14 Dec have seen more than S$50 million in turnover a day and include as many as five healthcare-related stocks – Medtecs, UG Healthcare, Biolidics, Clearbridge and Hyphens Pharma.   
	 
	
After ending 2019 with a market value of S$20 million, Medtecs has averaged S$20 million in daily turnover in 2020. For its 9MFY20 (ended Sep 30), the personal protective equipment vendor reported a 1,442% increase in its gross profit. 
	 
	The most recent company to list on Catalist, Aedge Group, based in Singapore, provides engineering services (such as scaffolding, shelters &amp; grating), transport services (88 buses with capacities ranging from 10 to 45 seats), and security and manpower services.

 

Since the end of 2007, SGX has brought to the marketplace numerous start-up businesses through the Catalist board including the listing of professional service group, Aedge Group on 14 December. The professional services of Aedge currently spans three key industries: engineering, security and manpower and transport. The company maintains a network of customers that comprises government agencies, multi-national companies, government-linked companies and established large corporations. Aedge maintains a market capitalisation of S$20 million and price to sales ratio of 0.8x and closed on its first day of trading at 21.0 cents. There are more than 200 stocks listed for trading on the Catalist Board.

The 10 most traded Catalist stocks in the 2020 year (to 14 Dec) have all ranked among Singapore’s 100 most traded stocks by turnover, with the 10 Catalist stocks combined seeing more than S$50 million in turnover a day. As detailed in the table below, the 10 stocks (ranked by turnover) include as many as five healthcare-related stocks – Medtecs International (“Medtecs”), UG Healthcare, Biolidics, Clearbridge and Hyphens Pharma. The 10 stocks generated a median total return of 117% in the 2020 year (to 14 Dec) , which includes a median 11% decline since the global rotation from momentum to value stocks in the second week of November.

 




			Top 10 Catalist-traded Stocks in 2020 YTD
			
			
			SGX 

			Code
			
			
			Mkt Cap 

			S$
			
			
			Nov 6 - 14 Dec Total Return %
			
			
			YTD Total Return %
			
			
			Price/Sales
			
			
			260 Day Volatility %
			
		


			Medtecs Intl
			
			
			546
			
			
			521,940,672
			
			
			-17
			
			
			2,491
			
			
			2.0
			
			
			167
			
		


			UG Healthcare
			
			
			8K7
			
			
			350,537,792
			
			
			-41
			
			
			1,124
			
			
			2.6
			
			
			147
			
		


			Rex Intl
			
			
			5WH
			
			
			200,557,440
			
			
			16
			
			
			-25
			
			
			10.3
			
			
			80
			
		


			Jiutian Chemical
			
			
			C8R
			
			
			141,179,520
			
			
			-38
			
			
			318
			
			
			0.7
			
			
			132
			
		


			Biolidics
			
			
			8YY
			
			
			79,214,096
			
			
			-3
			
			
			22
			
			
			10.9
			
			
			112
			
		


			Aspen
			
			
			1F3
			
			
			238,319,312
			
			
			-17
			
			
			178
			
			
			3.2
			
			
			263
			
		


			Clearbridge
			
			
			1H3
			
			
			87,115,384
			
			
			-5
			
			
			4
			
			
			2.4
			
			
			77
			
		


			Alset
			
			
			40V
			
			
			103,843,968
			
			
			6
			
			
			56
			
			
			6.8
			
			
			114
			
		


			V2Y Corp
			
			
			V2Y
			
			
			15,600,691
			
			
			91
			
			
			197
			
			
			0.3
			
			
			152
			
		


			Hyphens Pharma
			
			
			1J5
			
			
			93,133,424
			
			
			-23
			
			
			54
			
			
			0.7
			
			
			92
			
		


			Median
			
			
			 
			
			
			 
			
			
			-11
			
			
			117
			
			
			3
			
			
			123
			
		


			Average
			
			
			 
			
			
			 
			
			
			-3
			
			
			442
			
			
			4
			
			
			134
			
		

Source: SGX StockFacts, Bloomberg, Reuters (Data as of 14 December 2020)

 

The strongest perfomer of the 10 stocks in the 2020 year (to 14 Dec) was Medtecs. 

UG Healthcare was the next best performer reporting its 1QFY21 (ended 30 Sep) revenue more than doubled year-on-year on 5 November, mainly due to higher volume of gloves sold and average selling prices on the back of stronger demand for disposable gloves and supply constraints (click here for more).

As reported on 11 November, Jiutian Chemical’s quarterly net profit for 3QFY20 (ended 30 Sep) soared 57% over 2QFY20 despite a 20-day routine maintenance shutdown in early September 2020. Jiutian Chemical’s 2QFY20 was already a record quarterly net profit since the Company was listed in 2006. With the results, the Chairman noted a surge in demand for its main products of Dimethylformamide and methylamine from downstream customers who in turn are experiencing strong growth in both local and export markets for their products, in addition to rising demand for its products from users in the lithium batteries and semiconductor sectors, which are experiencing strong and sustainable growth in China (click here for more).

Aspen (Group) Holdings achieved revenue of RM62.4 million as at 3QFY20 (ended 30 Sep), a RM 6.9 million increase in revenue compared to 2QFY20. The increase was contributed from additional units sold in Tri Pinnacle and Vervea, as well as the progressive construction of Beacon Executive Suites and Vertu Resort during Recovery Movement Control Order phase. Following the completion of placement by the Aspen (Group) Holdings on 18 November, the funds will be used mainly to fund the construction of Phase 1 of the glove manufacturing facility which is expected to be completed by 1QFY21 and the Group targets to commence production by 2Q21 to bring between 1.6-1.8 billion gloves annually to the market.

The strongest performer since November 8 when the US media called Joe Biden the Winner of the US Election, followed by the announcement of the Pfizer/BioNtech vaccine results, was V2Y Corporation. V2Y Corporation (formerly Synagie Corporation) has recently sold its e-commerce business while seeking opportunities to expand its InsurTech business.

Rex International has gained 16% between 6 November and 14 December, as the price of Brent Crude Oil rallied 26% in SGD terms. Since listing in July 2013, Rex International has achieved four offshore discoveries, one in Oman and three in Norway. The Group also offers Rex Virtual Drilling screening services to other oil exploration companies as an additional tool to increase the success rate of finding oil.

The operations of Alset (formerly Singapore eDevelopment) span operations comprise Property Development, Info-Tech Related, Investment and Biomedical Businesses as captured in an infographic (click here) in the Business Times in early October. 

 

Medtecs was also the Most Traded Catalist Stock by Turnover in 2020 

For its 9MFY20 (ended 30 Sep), Medtecs reported a 1,442 per cent YoY increase in its gross profit. This was mostly attributed to the exporting of personal protective equipment (“PPE”) to over 30 countries in Southeast Asia, North Asia, US, Australia and Europe. Medtecs also serves as a one-stop vendor to hospitals, supplying PPE, workwear and medical consumables to more than 200 hospitals in Taiwan and the Philippines.

Looking forward the Group intends to increase its market share in the US by supplying locally manufactured facemasks starting in 1QFY21 while key growth markets in Asia Pacific such as Singapore, the Philippines and Taiwan remain. Medtecs is also aiming to increase productivity by systematically automating manufacturing processes and enhance employee training and education programs to remain competitive. Backed by Medtecs’ sustainable and scalable business model, built over the past 30 years, the Group maintains it is ready to embark on its next phase of growth, which is to be a global procurement platform for medical consumables and PPE. 

Other notable accolades this year include joining the MSCI Singapore Small Cap Index on Nov 30 and the board proposing to apply for a transfer from Catalist to the main board. On 18 November, Medtecs chief executive William Yang, who has over 10 years' experience in the textile industry, acquired one million shares of the company at an average price of 92.2 cents per share.

Catalist, the SGX sponsor-supervised board for growth companies, is now in its 13th year and home to 218 companies with a combined market capitalisation of S$11 billion. They come from geographical regions such as Singapore, Australia, Greater China, Indonesia, Israel, Japan, Malaysia, South Korea, Sweden and United Kingdom, across diverse sectors including Consumer, Technology, Healthcare, Energy and Industrials. With a view to expand their offerings and geographical footprint, these Catalist-listings provide accessibility in the capital formation process for comparatively new businesses.

At the same time the Catalist Board caters to the needs of fast-growing enterprises. Companies seeking a primary listing on the  Catalist Board must be brought to list by approved sponsors via an Initial Public Offering or a Reverse Takeover.  There are no quantitative entry criteria required by SGX. Instead, sponsors decide if the listing applicant is suitable to be listed using their house criteria. The quotation, trading and settlement of a stock listed on Catalist works the same way as a stock listed on the SGX Mainboard.



Medtecs Led Most Traded Catalist Stocks in 2020

Lendlease Global Commercial REIT / Equity Bottom-Up





In the October MTD, five S-REITs: ARA Logos Logisitics Trust, Mapletree Logistics Trust, Elite Commercial REIT, Suntec REIT and Lendlease Global Commercial REIT announced proposed property acquisitions. Property locations spanned Australia, China, Malaysia, the UK and Singapore. 
	 
	
This year S-REIT performances have been aligned with the performance of global REITs, with the median total return of the ~800 REITs listed across the world at -15%. US REIT Sector trends such as Mortgage-REIT induced volatility in March and rotation to Data Centre REITs in 1H20, were observed across APAC.    
	 
	
The strongest performers of the S-REIT Sector in the October MTD included CapitaLand Retail China Trust, Lippo Malls Trust, EC World REIT, Far East Hospitality Trust and Keppel DC REIT, with 5% average returns. This compared to a 3% decline for the iEdge S-REIT Leaders Index, which brought the Index YTD decline to 7%.   
	 

S-REITs Have Continued to Pursue Portfolio Growth in October

 The combined market value of the S-REIT Sector has grown at a very strong Compound Annual Growth Rate of 15% over the 10 years ending 2019. As expected, not every year saw growth, for instance in 2015, the combined S-REIT Sector market value was down 8% from 2014, and compared to 2019, the 2020 combined market value is currently down by a similar magnitude.

Nevertheless, S-REITs are still expanding their portfolios. There are multiple instances of the growth continuing with managers of the following REITs proposing or completing acquisitions in the month to date: 
 



ARA Logos Logisitics Trust announced on 26 October proposed acquisitions from LOGOS Property Group Limited’s managed ventures including: five logistics properties located in Brisbane, Australia, including a development asset, Corner Heron Drive and Curlew Street, Port of Brisbane which will have an approximate purchase consideration of S$225.9 million; and the fund investment in 49.5% interest in New LAIVS Trust and 40.0% interest in Oxford Property Fund, which have a combined portfolio of five logistics properties in New South Wales and Victoria, for a consideration amount of approximately S$178.5 million. For more details click here.  
	 
	
Mapletree Logistics Trust (“MLT”) announced on 21 October the proposed acquisition of Acacia Ridge Distribution Centre located at 338 Bradman Street, Brisbane, at a property purchase price of A$114.0 million via the acquisition of all the units in the property trust holding the Property from Alset Australian Mid TC Pty Ltd. Following this acquisition, MLT will have three properties in Brisbane and a total of 13 properties with over 347,287 square metres of leasable space in Australia. For more details click here. Furthermore, on 19 October, MLT announced the proposed acquisitions of 100% interest in seven properties and the remaining 50% interest in 15 properties in China at an acquisition price of approximately RMB 4,477.1 million, a property in Malaysia at an acquisition price of approximately MYR 402.5 million and a property in Vietnam at an acquisition price of approximately US$ 22.2 million. For more details click here. 
	 
	
Elite Commercial REIT announced on 19 October the proposed acquisition of 58 quality, UK commercial properties for £212.5 million, primarily leased to the UK Government, increasing the REIT’s overall exposure to London to 14% of the enlarged portfolio. For more details click here. 
	 
	
AIMS APAC REIT announced the completion of the acquisition of 7 Bulim street, Singapore and the Plant and Equipment thereon for the Purchase Price of approximately S$129.6 million which was announced back on 11 August. For more details click here.  
	 
	
Suntec REIT announced on 8 October, that it had entered into a sale and purchase agreement with Canada Pension Plan Investment Board to acquire a 50.0% interest in two Grade A office buildings with ancillary retail in the heart of Victoria, West End, London for an agreed value of £430.6 million. The remaining 50.0% interest in Nova Properties will continue to be held by Land Securities Group, the developer and asset manager of the Nova Properties. For more details, click here. 
	 
	
Lendlease Global Commercial REIT announced on 1 October it had acquired a 5.0% equity stake in Lendlease Asian Retail Investment Fund Limited  which indirectly holds a 75.0% interest in Jem, from Lendlease International Pty Limited at a purchase consideration of approximately S$45.0 million. Jem is an integrated office and retail development located in Jurong Gateway, the commercial hub of the Jurong Lake District. For more details, click here. 
	 

This followed on from the announcement of multiple acquisitions in September which included Mapletree Investments Pte Ltd and Mapletree North Asia Commercial Trust announcing they had entered into a unit sale and purchase agreement to co-invest in an office building located at 119, Nonhyeon-dong, Gangnam-gu, Seoul known as “The Pinnacle Gangnam”, at an agreed property value of KRW 452 billion (click here for more). Mapletree Logistics Trust also completed the acquisition of a logistics property in Truganina, Melbourne, (click here for more) and Ascendas REIT completed the acquisition of 254 Wellington Road in Melbourne (click here for more). 
 

Mapletree Industrial Trust announced on 14 September the proposed acquisition of a data centre located in Virginia, US, increasing its Data Centre exposure from 39% to 41% of the portfolio AUM. This followed a placement to increase the portfolio AUM exposure to Data Centres from 32% to 39% in June 2020, and a placement in September 2019 to increase its Portfolio AUM exposure from 18% to 32%. Note that Back in July, Cromwell European REIT also entered into an agreement to invest in European Data Centres (click here for more). 
 

Frasers Centrepoint Trust (“FCT”) also announced on 3 September it acquiring the remaining 63% share of AsiaRetail Fund Limited for S$1.1 billion, increasing its portfolio total asset size to S$6.7 billion. Since listing in 2006, FCT has grown its NLA from 640 thousand square feet to 1.4 million square feet, in addition to the PGIM Real Estate Asia Retail Fund Limited also maintaining a total of 1.0 million square feet of NLA.

 

Universal REIT Market Drivers in 2020

The economic impact of containment and lockdown measures has been the biggest driver of the big sector and sub-sector returns this year. These staunch sector-driven returns in 2020 has seen the performance and swings of the US REIT Sector correlated with REIT sectors across the world. US-listed REITs currently make up as much as 48% of the weight of the FTSE EPRA Nareit Global Index, and have hence played a key role in setting the broad REIT trends in 2020. For instance:



While Mortgage REITs are not traded in Singapore, global Mortgage REITs led much of the global REIT volatility in March 2020. The FTSE Nareit Mortgage REITs Index declined 60% in the 2020 year to 24 March, with its 30-day volatility soaring to 120% on that day. By comparison the iEdge S-REIT Leaders Index had declined 28% over the period, with 30-day volatility at 60% on 24 March.  
	 
	
Data Centres have been the strongest REIT segment in the 2020 year to date, with the FTSE EPRA Nareit Data Centre Sub Index gaining 27%, led by the world’s largest Data Centre REIT, US-listed Equinix Inc, generating a 35% total return. By comparison, Data Centre pure play Keppel DC REIT has gained 46% and Mapletree Industrial Trust which over the past 13 months has increased its Data Centre exposure to close to half of the portfolio gained 23%. This global trend has had a significant impact in Singapore, with these two S-REITs becoming STI constituents in 2020. 
	 
	
Global REITs were supported from the Fed Reserve’s policy 2% inflation targeting in the US, particularly between 26 November 2019 and 16 September 2020, with policy signalling on the latter date suggesting more moderate inflation overshooting after years of undershooting. REITs also function as an inflation hedge to US investors, and the aforementioned period saw the total return the S&amp;P 500 REIT constituents perform in-line with the S&amp;P 500 Equal Weighted Index. However since, 16 September, the S&amp;P 500 REIT constituents were outpaced by the S&amp;P 500 Equal Weighted Index by as much as 5%. 


Within the regional REIT industry, prudent capital management, ability to recycle assets, diversity of property pipelines and portfolios remain key sector drivers going into 2021.

 

The strongest performers of the S-REIT Sector in the October month to date included CapitaLand Retail China Trust, Lippo Malls Trust, EC World REIT, Far East Hospitality Trust and Keppel DC REIT, with 5% average returns. This compared to a 3% decline for the iEdge S-REIT Leaders Index, which brought the Index’s year to date decline to 7%. Meanwhile BHG Retail REIT, Keppel DC REIT, Frasers Cpt Trust, CapitaLand Retail China Trust and CDL Hospitality Trust have seen the most net institutional inflows in the October month-to-date. 

The table below details the S-REIT performances in both the October month to date, and the 2020 year to date. 

The indicative yields, debt to asset ratios and price to book ratios as of 30 September are also included. The combined Assets Under Management of the Nikko AM Asia Ex Japan REIT ETF, the Lion-Phillip S-REIT ETF and the Phillip SGX APAC DIV REIT ETF have increased from S$388 million at the end of 2019, to S$446 million at the end of September.




			Trusts
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			YTD Net Insti Inflow (S$M)
			
			
			YTD Total Return 
			
			
			QTD Net Insti Inflow (S$M)
			
			
			QTD Total Return
			
			
			Debt/ Asset as of 30 Sep 
			
			
			Ind. Div. Yield as of 30 Sep
			
			
			P/B (x) as of 30 Sep
			
		


			Ascendas REIT
			
			
			A17U
			
			
			11,150
			
			
			361.1
			
			
			7.0%
			
			
			-21.8
			
			
			-4.9%
			
			
			36.1%
			
			
			4.6%
			
			
			1.5
			
		


			Mapletree Log Tr
			
			
			M44U
			
			
			7,660
			
			
			102.2
			
			
			20.5%
			
			
			-8.3
			
			
			-0.1%
			
			
			39.6%
			
			
			3.9%
			
			
			1.7
			
		


			Mapletree Ind Tr
			
			
			ME8U
			
			
			7,286
			
			
			25.9
			
			
			23.3%
			
			
			-23.0
			
			
			-3.4%
			
			
			38.8%
			
			
			3.8%
			
			
			2.0
			
		


			CapitaMall Trust***
			
			
			C38U
			
			
			6,716
			
			
			-192.3
			
			
			-22.7%
			
			
			-49.4
			
			
			-4.2%
			
			
			34.4%
			
			
			4.7%
			
			
			1.0
			
		


			Mapletree Com Tr
			
			
			N2IU
			
			
			6,131
			
			
			-66.2
			
			
			-21.6%
			
			
			-19.9
			
			
			-4.6%
			
			
			33.7%
			
			
			4.1%
			
			
			1.1
			
		


			Keppel DC REIT
			
			
			AJBU
			
			
			4,834
			
			
			53.7
			
			
			45.7%
			
			
			4.7
			
			
			1.7%
			
			
			34.5%
			
			
			2.8%
			
			
			2.5
			
		


			Frasers L&amp;C Tr
			
			
			BUOU
			
			
			4,540
			
			
			62.4
			
			
			11.4%
			
			
			-16.0
			
			
			-4.3%
			
			
			37.4%
			
			
			5.0%
			
			
			1.4
			
		


			Suntec REIT
			
			
			T82U
			
			
			4,097
			
			
			-68.1
			
			
			-18.2%
			
			
			-22.9
			
			
			0.0%
			
			
			41.3%
			
			
			5.5%
			
			
			0.7
			
		


			Frasers Cpt Tr
			
			
			J69U
			
			
			3,901
			
			
			-21.3
			
			
			-14.5%
			
			
			4.4
			
			
			-1.3%
			
			
			35.0%
			
			
			3.8%
			
			
			1.1
			
		


			Keppel REIT
			
			
			K71U
			
			
			3,535
			
			
			10.8
			
			
			-13.0%
			
			
			-10.6
			
			
			-2.8%
			
			
			36.3%
			
			
			5.2%
			
			
			0.8
			
		


			Mapletree NAC Tr
			
			
			RW0U
			
			
			2,935
			
			
			-54.7
			
			
			-19.7%
			
			
			-10.1
			
			
			-3.2%
			
			
			39.6%
			
			
			8.0%
			
			
			0.7
			
		


			Ascott Residence Trust *
			
			
			HMN
			
			
			2,685
			
			
			-24.7
			
			
			-32.1%
			
			
			-5.0
			
			
			-2.8%
			
			
			36.1%
			
			
			5.9%
			
			
			0.8
			
		


			ParkwayLife REIT
			
			
			C2PU
			
			
			2,426
			
			
			33.1
			
			
			24.3%
			
			
			-3.3
			
			
			-3.4%
			
			
			38.3%
			
			
			3.2%
			
			
			2.1
			
		


			SPHREIT
			
			
			SK6U
			
			
			2,128
			
			
			-6.5
			
			
			-26.9%
			
			
			-5.4
			
			
			-12.4%
			
			
			29.3%
			
			
			4.1%
			
			
			0.8
			
		


			Cromwell REIT EUR
			
			
			CNNU
			
			
			1,886
			
			
			-7.9
			
			
			-2.2%
			
			
			-0.9
			
			
			-4.7%
			
			
			34.4%
			
			
			7.8%
			
			
			0.9
			
		


			OUE Com REIT
			
			
			TS0U
			
			
			1,787
			
			
			-26.5
			
			
			-38.8%
			
			
			-3.0
			
			
			-7.0%
			
			
			40.1%
			
			
			7.4%
			
			
			0.6
			
		


			Ascendas-iTrust **
			
			
			CY6U
			
			
			1,584
			
			
			-5.1
			
			
			-7.5%
			
			
			0.9
			
			
			0.7%
			
			
			28.9%
			
			
			6.6%
			
			
			1.2
			
		


			Manulife REIT USD
			
			
			BTOU
			
			
			1,520
			
			
			-23.3
			
			
			-24.8%
			
			
			-3.0
			
			
			-5.1%
			
			
			39.1%
			
			
			8.0%
			
			
			1.0
			
		


			CapitaR China Tr
			
			
			AU8U
			
			
			1,503
			
			
			-105.6
			
			
			-20.4%
			
			
			1.9
			
			
			9.9%
			
			
			33.6%
			
			
			7.0%
			
			
			0.7
			
		


			ESR-REIT
			
			
			J91U
			
			
			1,293
			
			
			-12.1
			
			
			-27.9%
			
			
			-4.1
			
			
			-5.2%
			
			
			41.8%
			
			
			8.2%
			
			
			0.9
			
		


			CDL H Trust *
			
			
			J85
			
			
			1,244
			
			
			-69.5
			
			
			-34.0%
			
			
			1.2
			
			
			-2.9%
			
			
			37.1%
			
			
			6.1%
			
			
			0.7
			
		


			Far East H Trust
			
			
			Q5T
			
			
			1,106
			
			
			-14.4
			
			
			-20.9%
			
			
			0.8
			
			
			2.7%
			
			
			39.2%
			
			
			5.5%
			
			
			0.6
			
		


			Prime US REITUSD
			
			
			OXMU
			
			
			1,100
			
			
			-12.9
			
			
			-13.9%
			
			
			-1.4
			
			
			-7.7%
			
			
			33.0%
			
			
			8.1%
			
			
			0.9
			
		


			Starhill Global REIT
			
			
			P40U
			
			
			944
			
			
			-46.0
			
			
			-38.8%
			
			
			-5.4
			
			
			-2.3%
			
			
			39.7%
			
			
			6.7%
			
			
			0.5
			
		


			Sasseur REIT
			
			
			CRPU
			
			
			927
			
			
			-30.5
			
			
			-7.8%
			
			
			-1.9
			
			
			0.0%
			
			
			28.1%
			
			
			7.9%
			
			
			0.9
			
		


			KepPacOakREITUSD
			
			
			CMOU
			
			
			897
			
			
			-5.9
			
			
			-4.1%
			
			
			-2.7
			
			
			-3.9%
			
			
			37.4%
			
			
			8.3%
			
			
			0.9
			
		


			AIMS APAC REIT
			
			
			O5RU
			
			
			855
			
			
			-19.3
			
			
			-11.0%
			
			
			-2.0
			
			
			0.8%
			
			
			35.4%
			
			
			7.5%
			
			
			0.9
			
		


			Frasers H Trust *
			
			
			ACV
			
			
			807
			
			
			-10.0
			
			
			-40.4%
			
			
			-0.4
			
			
			-2.3%
			
			
			35.9%
			
			
			5.8%
			
			
			0.6
			
		


			Lendlease REIT
			
			
			JYEU
			
			
			773
			
			
			-68.6
			
			
			-25.9%
			
			
			-5.0
			
			
			-2.9%
			
			
			35.1%
			
			
			5.8%
			
			
			N/A
			
		


			ARA LOGOS Log Tr
			
			
			K2LU
			
			
			681
			
			
			-15.9
			
			
			-7.4%
			
			
			-3.3
			
			
			0.8%
			
			
			40.4%
			
			
			8.1%
			
			
			1.1
			
		


			Dasin Retail Tr **
			
			
			CEDU
			
			
			613
			
			
			1.2
			
			
			-0.6%
			
			
			-0.1
			
			
			-1.2%
			
			
			37.9%
			
			
			6.2%
			
			
			0.6
			
		


			Soilbuild Biz REIT
			
			
			SV3U
			
			
			597
			
			
			-7.6
			
			
			-1.9%
			
			
			-6.6
			
			
			-3.8%
			
			
			36.9%
			
			
			6.9%
			
			
			0.9
			
		


			IREIT Global
			
			
			UD1U
			
			
			569
			
			
			-2.6
			
			
			-10.8%
			
			
			0.4
			
			
			-0.8%
			
			
			39.0%
			
			
			8.2%
			
			
			0.8
			
		


			EC World REIT
			
			
			BWCU
			
			
			563
			
			
			-10.5
			
			
			0.0%
			
			
			0.5
			
			
			2.9%
			
			
			39.1%
			
			
			8.2%
			
			
			0.8
			
		


			United Hampshire REIT USD
			
			
			ODBU
			
			
			384
			
			
			-6.8
			
			
			N/A
			
			
			-1.8
			
			
			1.4%
			
			
			36.2%
			
			
			7.4%
			
			
			0.8
			
		


			Elite Com REIT GBP
			
			
			MXNU
			
			
			376
			
			
			1.2
			
			
			N/A
			
			
			-0.5
			
			
			0.8%
			
			
			32.6%
			
			
			7.1%
			
			
			1.0
			
		


			Sabana REIT
			
			
			M1GU
			
			
			369
			
			
			4.8
			
			
			-21.7%
			
			
			0.0
			
			
			-4.1%
			
			
			33.7%
			
			
			5.5%
			
			
			0.7
			
		


			First REIT
			
			
			AW9U
			
			
			338
			
			
			-29.0
			
			
			-55.6%
			
			
			-1.7
			
			
			-3.4%
			
			
			34.9%
			
			
			15.2%
			
			
			0.4
			
		


			BHG Retail REIT
			
			
			BMGU
			
			
			281
			
			
			15.1
			
			
			-15.9%
			
			
			15.2
			
			
			0.0%
			
			
			35.9%
			
			
			4.9%
			
			
			0.7
			
		


			Lippo Malls Tr
			
			
			D5IU
			
			
			249
			
			
			-10.4
			
			
			-60.6%
			
			
			-0.5
			
			
			6.3%
			
			
			35.7%
			
			
			16.4%
			
			
			0.3
			
		


			ARA H Trust USD *
			
			
			XZL
			
			
			236
			
			
			-2.7
			
			
			-62.7%
			
			
			-0.5
			
			
			1.2%
			
			
			42.5%
			
			
			14.0%
			
			
			0.3
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			-15.2%
			
			
			 
			
			
			-1.8%
			
			
			36.4%
			
			
			6.8%
			
			
			0.95
			
		

Note * Stapled Trust, ** Business Trust, *** With regard to the CapitaLand Mall Trust and CapitaLand Commercial Trust  merger, this table  does not include the CapitaMall Trust Temporary Line established by FTSE Russell, following the last day of trading of CapitaLand Commercial Trust, and ahead of the renaming of CapitaLand Mall Trust to CapitaLand Integrated Commercial Trust, indicatively expected on 3 November.

Source: SGX StockFacts, Bloomberg, Thomson Reuters (Data as of 27 October 2020).



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