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>The iEdge SG Advanced Manufacturing Index is comprised of 110 stocks that drew 20 cents in every dollar that went to work into the Singapore stock market in 1Q23.</li><li>The Index constituents that booked the highest net institutional inflow proportionate to quarter-end market cap in 1Q23 included Acesian Partners, ISDN and Frencken, while averaging a 28% total return.</li><li>The iEdge SG Advanced Manufacturing Index booked S$52 million of Net Institutional Inflow in 1Q23.</li></ul>

The iEdge SG Advanced Manufacturing Index is comprised of 110 stocks that drew 20 cents in every dollar that went to work into the Singapore stock market in 1Q23.The Index constituents that booked the highest net institutional inflow proportionate to quarter-end market cap in 1Q23 included Acesian Partners, ISDN and Frencken, while averaging a 28% total return.The iEdge SG Advanced Manufacturing Index booked S$52 million of Net Institutional Inflow in 1Q23.

Mixed Moves of Manufacturing Stocks in 1Q23 

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>This week in StubWorld ...</p>
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<p>I see <a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a>'s discount to NAV at 69%. The ~90% holding into <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-co-ltd-8e397b7b-30b8-4284-afc1-e1dc799b2e5c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings (300999 CH)</a> accounts for a staggering 300% of Wilmar's market cap.</p>
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<p>Preceding my comments on Wilmar are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...




I see Wilmar International (WIL SP)'s discount to NAV at 69%. The ~90% holding into Yihai Kerry Arawana Holdings (300999 CH) accounts for a staggering 300% of Wilmar's market cap.




Preceding my comments on Wilmar are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Wilmar's Stake In Yihai Kerry At 300% Of Market Cap

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<p>Yesterday, <a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a>'s <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:29184:1" rel="noopener">Yihai Kerry Arawana Holdings Co Ltd (YKA CH)</a> (YKA) commenced trading on the Shenzhen Stock Exchange (ChiNext Board). Priced at RMB25.70/share, shares closed at RMB56/share. Shares are currently changing hands at RMB49.  That backs out a trailing PER of ~59x.</p>
<p>And Wilmar's reaction yesterday? Down 6.4% in what appears to be a "sell the news" trade.</p>
<p>I see Wilmar's discount to NAV at 55%. Shares haven't retested near-term highs since <a href="https://www.smartkarma.com/entities/archer-daniels-midland-co" target="_blank" data-smartkarma-citation="entities:14746:1" rel="noopener">Archer Daniels Midland Co (ADM US)</a>'s placement in August. But since that placement, uncertainty over YKA's IPO has been removed. Wilmar is cheap here.</p>
<p>As always, more below the fold.</p>
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<p><em>For some background history on YKA's IPO, please refer to past insights below:</em></p>
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<td style="width: 124.782px;">17-Sep-20</td>
<td style="width: 578.75px;"><a href="https://skr.ma/U4wbi" target="_blank" rel="noopener">Wilmar: China Ops IPO One Step Closer</a></td>
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<td style="width: 124.782px;">29-Sep-20</td>
<td style="width: 578.75px;"><a href="https://skr.ma/xBrVA" target="_blank" rel="noopener">Wilmar: YKA's Pricing &amp; Cheap Rump Stake</a></td>
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Yesterday, Wilmar International (WIL SP)'s Yihai Kerry Arawana Holdings Co Ltd (YKA CH) (YKA) commenced trading on the Shenzhen Stock Exchange (ChiNext Board). Priced at RMB25.70/share, shares closed at RMB56/share. Shares are currently changing hands at RMB49.  That backs out a trailing PER of ~59x.
And Wilmar's reaction yesterday? Down 6.4% in what appears to be a "sell the news" trade.
I see Wilmar's discount to NAV at 55%. Shares haven't retested near-term highs since Archer Daniels Midland Co (ADM US)'s placement in August. But since that placement, uncertainty over YKA's IPO has been removed. Wilmar is cheap here.
As always, more below the fold.



For some background history on YKA's IPO, please refer to past insights below:






Date 


Insight



17-Sep-20
Wilmar: China Ops IPO One Step Closer


29-Sep-20
Wilmar: YKA's Pricing &amp; Cheap Rump Stake









<ul><li>Share buybacks by primary listed companies 17 Feb - 23 Feb, 2023 Keppel Corporation, Singtel, Jardine Matheson Holdings, Singapore Airlines and DBS led the net institutional outflow for the five sessions.</li><li>Between Feb 22 and 23, HPRY Holdings, in which Kuok has a deemed interest, acquired 535,000 shares at an average price of S$3.95 per share.</li></ul>

Share buybacks by primary listed companies 17 Feb - 23 Feb, 2023 Keppel Corporation, Singtel, Jardine Matheson Holdings, Singapore Airlines and DBS led the net institutional outflow for the five sessions.Between Feb 22 and 23, HPRY Holdings, in which Kuok has a deemed interest, acquired 535,000 shares at an average price of S$3.95 per share.

Wilmar chairman Kuok Khoon Hong adds to stake following FY22 results

<ul><li>The STI gained 5.4% over the past fortnight, recovering half of the declines posted between 13 Sep and 21 Oct.</li><li>This has brought the STI’s 2022-to-date total return to 4%, which compares to an 18% decline for the FTSE Developed Index and 21% decline for the FTSE Asia Pacific Index.</li><li>UOB was among the most defensive STI stocks between 13 Sep and 21 Oct, in addition to YZJ Shipbuilding, Genting SG, DBS, Emperador.</li></ul>

The STI gained 5.4% over the past fortnight, recovering half of the declines posted between 13 Sep and 21 Oct.This has brought the STI’s 2022-to-date total return to 4%, which compares to an 18% decline for the FTSE Developed Index and 21% decline for the FTSE Asia Pacific Index.UOB was among the most defensive STI stocks between 13 Sep and 21 Oct, in addition to YZJ Shipbuilding, Genting SG, DBS, Emperador.

Wilmar, Sembcorp Ind & Keppel DC REIT Led STI’s 2-Week 5% Partial Rebound 

Singapore

Wilmar International Ltd. is an agribusiness company. The Company is involved in oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, and grains processing and merchandising. Wilmar also manufactures and distributes fertilizers and owns a fleet of vessels.

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Wilmar International (WIL SP)

Mixed Moves of Manufacturing Stocks in 1Q23

The iEdge SG Advanced Manufacturing Index is comprised of 110 stocks that drew 20 cents in every dollar that went to work into the Singapore stock...

Singapore Exchange Ltd (SGX)

StubWorld: Wilmar's Stake In Yihai Kerry At 300% Of Market Cap

I'd buy Wilmar here. Management's average buyback price of $5.08/share. YKA accounting for 3x Wilmar's market cap is unstatanble. I see a more...

David Blennerhassett

Wilmar Is A Buy After YKA’s Listing

YKA shares jump 118% on its ChiNext debut - yet Wilmar sheds 6.4%. At a 55% discount to NAV, Wilmar is a buy with a view to retesting the pre-ADM...

David Blennerhassett

Wilmar chairman Kuok Khoon Hong adds to stake following FY22 results

Share buybacks by primary listed companies 17 Feb - 23 Feb, 2023 Keppel Corporation, Singtel, Jardine Matheson Holdings, Singapore Airlines and...

Singapore Exchange Ltd (SGX)

Wilmar, Sembcorp Ind & Keppel DC REIT Led STI’s 2-Week 5% Partial Rebound

The STI gained 5.4% over the past fortnight, recovering half of the declines posted between 13 Sep and 21 Oct. This has brought the STI’s...

Singapore Exchange Ltd (SGX)

52-week Range

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