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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For the first 18 weeks of 2022, eight stocks whose share price gains have been largely associated with higher commodity prices, have averaged a 64% total return for the period, following on from averaging 121% total returns in 2021. Five of the eight stocks are associated with energy, the sector that has led global stocks over the period. 
	 </li>
	<li>
The combined average daily trading turnover of the eights stocks has soared 250% from S$24 million in 2021 to S$61 million over the past 18 weeks. Golden Energy and Resources and Geo Energy Resources saw the biggest jump in turnover, as May Indonesia Thermal Coal futures rallied close to 90% to US$97/MT. 
	 </li>
	<li>Sembcorp Industries led the STI stocks over the 18 weeks with a 49% total return, while ranking among the top five Singapore stocks by net institutional inflow. Pressing ahead with strategic transformation of its portfolio from brown to green energy, last week the company announced it secured a S$1.2 billion sustainability-linked loan facility.</li>
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For the first 18 weeks of 2022, energy and agriculture stocks have led the global stock market, as supply constraints from the Ukraine crisis have exacerbated price gains, which had been previously been driven by demand factors. 
Among Singapore’s most actively traded 100 stocks this year are Sembcorp Industries, Rex International, Geo Energy Resources, RH Petrogas, Golden Energy and Resources, with the five stocks averaging 77% gains in the 2022 YTD, following 176% average total returns in 2021. Brent Crude Oil is currently trading 45% above the end of 2021 levels, while May Indonesia Thermal Coal futures are trading 90% above their end of 2021 levels. 
On the agriculture side, Crude Palm Oil producers have also outpaced the region in the 2022 YTD, with Golden Agri-Resources, First Resources and Bumitama Agri, which also rank among the top 100 stocks by turnover this year, averaging 42% total returns following 31% average total returns in 2021. July CPO futures are also trading more than 50% above their end of 2021 levels. 
The comparative performances of the eight stocks which has seen combined net institutional inflows of S$174 million in the 2022 YTD are tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			2022 YTD Total Return %
			</td>
			<td>
			2022 YTD Avg. Daily T/O (S$M)
			</td>
			<td>
			2022 YTD Net Insti Inflow (S$M)
			</td>
			<td>
			2021 Total Return %
			</td>
			<td>
			2021 Avg. Daily T/O (S$M)
			</td>
			<td>
			T/O Growth
			</td>
			<td>
			12M Volatility %
			</td>
			<td>
			Sector
			</td>
		</tr>
<tr>
<td>
			Sembcorp Ind
			</td>
			<td>
			U96
			</td>
			<td>
			5,266
			</td>
			<td>
			49
			</td>
			<td>
			14.2
			</td>
			<td>
			133.9
			</td>
			<td>
			20
			</td>
			<td>
			8.2
			</td>
			<td>
			73%
			</td>
			<td>
			25
			</td>
			<td>
			Utilities
			</td>
		</tr>
<tr>
<td>
			Rex Intl
			</td>
			<td>
			5WH
			</td>
			<td>
			443
			</td>
			<td>
			11
			</td>
			<td>
			9.8
			</td>
			<td>
			-17.8
			</td>
			<td>
			109
			</td>
			<td>
			4.8
			</td>
			<td>
			104%
			</td>
			<td>
			54
			</td>
			<td>
			Energy/ Oil &amp; Gas
			</td>
		</tr>
<tr>
<td>
			Geo Energy Res
			</td>
			<td>
			RE4
			</td>
			<td>
			747
			</td>
			<td>
			74
			</td>
			<td>
			9.1
			</td>
			<td>
			18.3
			</td>
			<td>
			118
			</td>
			<td>
			2.1
			</td>
			<td>
			341%
			</td>
			<td>
			57
			</td>
			<td>
			Energy/ Oil &amp; Gas
			</td>
		</tr>
<tr>
<td>
			Golden Agri-Res
			</td>
			<td>
			E5H
			</td>
			<td>
			3,995
			</td>
			<td>
			33
			</td>
			<td>
			8.8
			</td>
			<td>
			10.0
			</td>
			<td>
			60
			</td>
			<td>
			4.2
			</td>
			<td>
			111%
			</td>
			<td>
			39
			</td>
			<td>
			Consumer Non-Cyclicals
			</td>
		</tr>
<tr>
<td>
			First Resources
			</td>
			<td>
			EB5
			</td>
			<td>
			3,328
			</td>
			<td>
			43
			</td>
			<td>
			6.8
			</td>
			<td>
			9.1
			</td>
			<td>
			21
			</td>
			<td>
			2.3
			</td>
			<td>
			195%
			</td>
			<td>
			35
			</td>
			<td>
			Consumer Non-Cyclicals
			</td>
		</tr>
<tr>
<td>
			RH Petrogas
			</td>
			<td>
			T13
			</td>
			<td>
			251
			</td>
			<td>
			81
			</td>
			<td>
			5.9
			</td>
			<td>
			-0.9
			</td>
			<td>
			552
			</td>
			<td>
			1.6
			</td>
			<td>
			257%
			</td>
			<td>
			121
			</td>
			<td>
			Energy/ Oil &amp; Gas
			</td>
		</tr>
<tr>
<td>
			Golden Energy
			</td>
			<td>
			AUE
			</td>
			<td>
			2,058
			</td>
			<td>
			169
			</td>
			<td>
			4.5
			</td>
			<td>
			12.7
			</td>
			<td>
			80
			</td>
			<td>
			0.8
			</td>
			<td>
			472%
			</td>
			<td>
			80
			</td>
			<td>
			Energy/ Oil &amp; Gas
			</td>
		</tr>
<tr>
<td>
			Bumitama Agri
			</td>
			<td>
			P8Z
			</td>
			<td>
			1,353
			</td>
			<td>
			51
			</td>
			<td>
			1.4
			</td>
			<td>
			8.4
			</td>
			<td>
			11
			</td>
			<td>
			0.5
			</td>
			<td>
			206%
			</td>
			<td>
			34
			</td>
			<td>
			Consumer Non-Cyclicals
			</td>
		</tr>
<tr>
<td>
			Total
			</td>
			<td>
			 
			</td>
			<td>
			17,439
			</td>
			<td>
			 
			</td>
			<td>
			61
			</td>
			<td>
			174
			</td>
			<td>
			 
			</td>
			<td>
			24
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			64
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			121
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			56
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
 Source: SGX, Bloomberg (Data as of 6 May 2022)

 

Financial Milestones in 2021 
In 2021, Sembcorp Industries reported revenue of S$7.8 billion compared to S$5.4 billion in 2020. The increase was driven by improvements across all segments, with the biggest contribution from conventional energy at 86% of Group turnover. The company is pressing ahead with strategic transformation of its portfolio from brown to green energy, with an objective for sustainable solutions to make up 70% of its net profit by 2025, which would be up from 20% in 2020. 
Rex International recorded revenue of US$158.44 million in 2021, a 240% increase from US$46.66 million in 2020, mainly from subsidiary Masirah Oil Ltd’s share of produced oil after the Oman government’s take. RH Petrogas also reported net profit after tax of US$27.3 million, a sharp reversal from a loss of US$4.8 million recorded in 2020. Last year, Geo Energy Resources achieved a record revenue of US$641.9 million in 2021, an increase of 109% from 2020, while Golden Energy and Resources also delivered record revenue of US$1,874 million, its highest revenue since listing in 2016. 
In 2021, Golden-Agri Resources’ revenue for the full year crossed the US$10 billion level, an all-time high corresponding to strong CPO prices. First Resources also delivered record sales in 2021, with the topline revenue surging 56.3% YoY to US$1,032.3 million while underlying net profit rose 53.8% to US$149.2 million. Meanwhile, stronger production in 2021 enabled Bumitama Agri to capitalise on soaring prices and surpass the IDR 10-trillion revenue milestone and a record-breaking profit of IDR 2.09 trillion in 2021.
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For the first 18 weeks of 2022, eight stocks whose share price gains have been largely associated with higher commodity prices, have averaged a 64% total return for the period, following on from averaging 121% total returns in 2021. Five of the eight stocks are associated with energy, the sector that has led global stocks over the period. 
	 
	
The combined average daily trading turnover of the eights stocks has soared 250% from S$24 million in 2021 to S$61 million over the past 18 weeks. Golden Energy and Resources and Geo Energy Resources saw the biggest jump in turnover, as May Indonesia Thermal Coal futures rallied close to 90% to US$97/MT.  
	 
	Sembcorp Industries led the STI stocks over the 18 weeks with a 49% total return, while ranking among the top five Singapore stocks by net institutional inflow. Pressing ahead with strategic transformation of its portfolio from brown to green energy, last week the company announced it secured a S$1.2 billion sustainability-linked loan facility.

 

For the first 18 weeks of 2022, energy and agriculture stocks have led the global stock market, as supply constraints from the Ukraine crisis have exacerbated price gains, which had been previously been driven by demand factors.  
Among Singapore’s most actively traded 100 stocks this year are Sembcorp Industries, Rex International, Geo Energy Resources, RH Petrogas, Golden Energy and Resources, with the five stocks averaging 77% gains in the 2022 YTD, following 176% average total returns in 2021. Brent Crude Oil is currently trading 45% above the end of 2021 levels, while May Indonesia Thermal Coal futures are trading 90% above their end of 2021 levels.   
On the agriculture side, Crude Palm Oil producers have also outpaced the region in the 2022 YTD, with Golden Agri-Resources, First Resources and Bumitama Agri, which also rank among the top 100 stocks by turnover this year, averaging 42% total returns following 31% average total returns in 2021. July CPO futures are also trading more than 50% above their end of 2021 levels.  
The comparative performances of the eight stocks which has seen combined net institutional inflows of S$174 million in the 2022 YTD are tabled below.




			Stock
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			2022 YTD Total Return %
			
			
			2022 YTD Avg. Daily T/O (S$M)
			
			
			2022 YTD Net Insti Inflow (S$M)
			
			
			2021 Total Return %
			
			
			2021 Avg. Daily T/O (S$M)
			
			
			T/O Growth
			
			
			12M Volatility %
			
			
			Sector
			
		


			Sembcorp Ind
			
			
			U96
			
			
			5,266
			
			
			49
			
			
			14.2
			
			
			133.9
			
			
			20
			
			
			8.2
			
			
			73%
			
			
			25
			
			
			Utilities
			
		


			Rex Intl
			
			
			5WH
			
			
			443
			
			
			11
			
			
			9.8
			
			
			-17.8
			
			
			109
			
			
			4.8
			
			
			104%
			
			
			54
			
			
			Energy/ Oil &amp; Gas
			
		


			Geo Energy Res
			
			
			RE4
			
			
			747
			
			
			74
			
			
			9.1
			
			
			18.3
			
			
			118
			
			
			2.1
			
			
			341%
			
			
			57
			
			
			Energy/ Oil &amp; Gas
			
		


			Golden Agri-Res
			
			
			E5H
			
			
			3,995
			
			
			33
			
			
			8.8
			
			
			10.0
			
			
			60
			
			
			4.2
			
			
			111%
			
			
			39
			
			
			Consumer Non-Cyclicals
			
		


			First Resources
			
			
			EB5
			
			
			3,328
			
			
			43
			
			
			6.8
			
			
			9.1
			
			
			21
			
			
			2.3
			
			
			195%
			
			
			35
			
			
			Consumer Non-Cyclicals
			
		


			RH Petrogas
			
			
			T13
			
			
			251
			
			
			81
			
			
			5.9
			
			
			-0.9
			
			
			552
			
			
			1.6
			
			
			257%
			
			
			121
			
			
			Energy/ Oil &amp; Gas
			
		


			Golden Energy
			
			
			AUE
			
			
			2,058
			
			
			169
			
			
			4.5
			
			
			12.7
			
			
			80
			
			
			0.8
			
			
			472%
			
			
			80
			
			
			Energy/ Oil &amp; Gas
			
		


			Bumitama Agri
			
			
			P8Z
			
			
			1,353
			
			
			51
			
			
			1.4
			
			
			8.4
			
			
			11
			
			
			0.5
			
			
			206%
			
			
			34
			
			
			Consumer Non-Cyclicals
			
		


			Total
			
			
			 
			
			
			17,439
			
			
			 
			
			
			61
			
			
			174
			
			
			 
			
			
			24
			
			
			 
			
			
			 
			
			
			 
			
		


			Average
			
			
			 
			
			
			 
			
			
			64
			
			
			 
			
			
			 
			
			
			121
			
			
			 
			
			
			 
			
			
			56
			
			
			 
			
		

 Source: SGX, Bloomberg (Data as of 6 May 2022)

 

Financial Milestones in 2021   
In 2021, Sembcorp Industries reported revenue of S$7.8 billion compared to S$5.4 billion in 2020. The increase was driven by improvements across all segments, with the biggest contribution from conventional energy at 86% of Group turnover. The company is pressing ahead with strategic transformation of its portfolio from brown to green energy, with an objective for sustainable solutions to make up 70% of its net profit by 2025, which would be up from 20% in 2020.  
Rex International recorded revenue of US$158.44 million in 2021, a 240% increase from US$46.66 million in 2020, mainly from subsidiary Masirah Oil Ltd’s share of produced oil after the Oman government’s take. RH Petrogas also reported net profit after tax of US$27.3 million, a sharp reversal from a loss of US$4.8 million recorded in 2020. Last year, Geo Energy Resources achieved a record revenue of US$641.9 million in 2021, an increase of 109% from 2020, while Golden Energy and Resources also delivered record revenue of US$1,874 million, its highest revenue since listing in 2016.  
In 2021, Golden-Agri Resources’ revenue for the full year crossed the US$10 billion level, an all-time high corresponding to strong CPO prices. First Resources also delivered record sales in 2021, with the topline revenue surging 56.3% YoY to US$1,032.3 million while underlying net profit rose 53.8% to US$149.2 million. Meanwhile, stronger production in 2021 enabled Bumitama Agri to capitalise on soaring prices and surpass the IDR 10-trillion revenue milestone and a record-breaking profit of IDR 2.09 trillion in 2021.



Active Commodity Plays Average 60%+ YTD Return on Strong Turnover 

RH Petrogas Ltd

Active Commodity Plays Average 60%+ YTD Return on Strong Turnover