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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

China Aviation Oil Singapore Corp / Equity Bottom-Up

China Aviation Oil Singapore Corp (CAO SP)

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<li>
The FTSE ST China Index has generated a 12% gain in the 2021 YTD. Wilmar, Sunpower, Nanofilm, China Aviation and SIIC Environment have led the Index higher over the past 17 sessions with as many as 12 gainers, one stock unchanged and four decliners.   
	 </li>
	<li>
Wilmar has also been the top performing STI stock in the 2021 YTD with a 17% gain. The strongest of the 17 stocks of the FTSE ST China Index that have been listed for the tenure of 10 years is Valuetronics with 24% annualised total returns, followed by China Sunsine with 18% annualised total returns.  
	 </li>
	<li>The four China-focused ETFs listed on SGX have a combined global AUM of S$3.9 billion and have recorded average gains of 11% through to 26 January. The recently listed Lion Hang Seng TECH ETF that invests into the 30 largest Chinese technology companies recorded the highest gain of 20%.</li>
</ul>
 

 China Leads FDI Inflows in 2020, Potential for more China-ASEAN BRI in the New Norm? 
With China’s 4Q20 GDP growing 6.5% from 4Q19, the overall 2020 GDP growth has come in at 2.3% for the world’s second largest economy. Presently, China is the sole major global economy of the world to generate GDP growth in 2020. For this year consensus estimates have China growth rebounding to 8.0%. On 24 January, the UNCTAD Investment Trends Monitor <a href="https://unctad.org/news/global-foreign-direct-investment-fell-42-2020-outlook-remains-weak">reported</a> a concentrated 69% decline in Foreign Direct Investment (“FDI”) into advanced economies in 2020, while FDI into developing economies grew 12%, with flows into China growing 4%. This placed China as the world’s largest FDI recipient in 2020. 
The ranking coincided with the aforementioned GDP growth, the investment facilitation program unveiled in October 2019 (click <a href="https://www.globaltimes.cn/content/1167975.shtml">here</a>), in addition to the CNY appreciating to the USD, with the USD/CNY moving from 6.96 at the end of 2019, to 6.53 at the end of 2020. Similarly, the IMF in its latest World Economic Outlook (click <a href="https://www.imf.org/en/Publications/WEO/Issues/2021/01/26/2021-world-economic-outlook-update">here</a>) has attributed China’s strong recovery to effective containment measures, a forceful public investment response, and central bank liquidity support. 
Meanwhile the recent gradual appreciation of the CNY, the 31% decline of FDI into ASEAN in 2020, and assumption of a return to a new normal in 2H21, focus may return to Belt and Road Initiatives between China and ASEAN in the pre-designated sectors of energy, infrastructure and industrial parks. Singapore FTSE ST China Index Generates 12% YTD Gain 
As discussed <a href="https://www.sgx.com/research-education/market-updates/20210111-singapores-china-index-begins-2021-7-gain">here</a>, the FTSE ST China Index generated a 7% gain over the first five sessions of 2021, following a 7% total return in 2020. The Index has since extended the year-to-date gain to 12.2% on 26 January. The Index is comprised of 17 stocks of the FTSE ST All-Share Index that report more than 50% of their revenues or assets to China (click <a href="https://research.ftserussell.com/Analytics/Factsheets/Home/DownloadSingleIssue?issueName=FSTCT&amp;IsManual=false&amp;force_isolation=true">here</a> for more). By comparsion the Hang Seng China Enterprises Index has gained 9.3% in the 2021 year to 26 January. Wilmar International, Sunpower Group, Nanofilm Technologies, China Aviation Oil and SIIC Environment led the Index over the past 17 sessions. As noted on 11 January (click <a href="https://www.sgx.com/research-education/market-updates/20210111-singapores-china-index-begins-2021-7-gain">here</a>), Nanofilm Technologies International is the newest entrant to the FTSE ST China Index with its prospectus detailing that two-thirds of its FY19 revenue was generated from invoices issued by its China operations. Wilmar has been the top performing stock of both the FTSE ST China Index and the Straits Times Index in the 2021 year to 26 January, with a 17% gain. Yihai Kerry Arawana Holdings Co (“YKA”), the 89.99% subsidiary of Wilmar International has been trading on the Shenzhen Stock Exchange ChiNext Board since 15 October. The current valuation gap sees YKA maintaining a Price-to-Earnings (“P/E”) ratio of 118x, compared to Wilmar’s Price-to-Earnings ratio of 19x. At the end of 2020, China Consumer Goods stocks with a market value of at least US$1 billion maintained a median P/E ratio near 45x, compared to their peers across the exchanges of APAC financial centres trading at a median P/E ratio of 20x. 
Sunpower Group’s share price has gained 16% from 80 cents at the end of 2020, to 93 cents on 26 January. Sunpower Group announced on 12 January that it was acquiring the thermal business of SANLI Group and 25-year exclusive right to supply steam to SANLI (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/2RI1U77Z7VGWVIWF/5cc8fad13d0a0ec21500ac66803619251dacb84f9e3fd32daa21098c4e9d007c">here</a>). This followed and announcement on the last trading session of 2020 that Sunpower International had entered into a Sales &amp; Purchase Agreement to divest the Manufacturing &amp; Services business to Nanjing Sunpower Holdings, enabling a strategic focus on its green Investments (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/Q0485R1U04XM0CM2/b2161d6898d2cec98179d6526c4280f6b13a049b4accb4a12eba070f409607ea">here</a>). 
The 17 stocks of Index, sort by performances in the 2021 year to 26 January, are tabled below. 

<table class="table table-striped"><tbody>
<tr>
<td>
			Index Constituent
			</td>
			<td>
			Stock Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			Net Insti Inflow S$M
			</td>
			<td>
			Total Return YTD %
			</td>
			<td>
			10 Year Total Return %
			</td>
		</tr>
<tr>
<td>
			Wilmar Intl
			</td>
			<td>
			F34
			</td>
			<td>
			34430
			</td>
			<td>
			69.9
			</td>
			<td>
			17.2
			</td>
			<td>
			26
			</td>
		</tr>
<tr>
<td>
			Sunpower
			</td>
			<td>
			5GD
			</td>
			<td>
			755
			</td>
			<td>
			-1.9
			</td>
			<td>
			16.2
			</td>
			<td>
			98
			</td>
		</tr>
<tr>
<td>
			Nanofilm
			</td>
			<td>
			MZH
			</td>
			<td>
			3342
			</td>
			<td>
			-1.3
			</td>
			<td>
			15.0
			</td>
			<td>
			N/A
			</td>
		</tr>
<tr>
<td>
			China Aviation
			</td>
			<td>
			G92
			</td>
			<td>
			1015
			</td>
			<td>
			0.7
			</td>
			<td>
			11.3
			</td>
			<td>
			18
			</td>
		</tr>
<tr>
<td>
			SIIC Environment
			</td>
			<td>
			BHK
			</td>
			<td>
			497
			</td>
			<td>
			-3.6
			</td>
			<td>
			10.4
			</td>
			<td>
			-34
			</td>
		</tr>
<tr>
<td>
			Valuetronics
			</td>
			<td>
			BN2
			</td>
			<td>
			281
			</td>
			<td>
			-1.2
			</td>
			<td>
			9.3
			</td>
			<td>
			491
			</td>
		</tr>
<tr>
<td>
			HPH Trust USD
			</td>
			<td>
			NS8U
			</td>
			<td>
			2481
			</td>
			<td>
			-2.8
			</td>
			<td>
			8.9
			</td>
			<td>
			N/A
			</td>
		</tr>
<tr>
<td>
			YZJ Shipbldg SGD
			</td>
			<td>
			BS6
			</td>
			<td>
			3964
			</td>
			<td>
			21.5
			</td>
			<td>
			7.9
			</td>
			<td>
			-18
			</td>
		</tr>
<tr>
<td>
			China Everbright
			</td>
			<td>
			U9E
			</td>
			<td>
			658
			</td>
			<td>
			-2.8
			</td>
			<td>
			2.2
			</td>
			<td>
			-42
			</td>
		</tr>
<tr>
<td>
			Yanlord Land
			</td>
			<td>
			Z25
			</td>
			<td>
			2202
			</td>
			<td>
			-11.5
			</td>
			<td>
			1.8
			</td>
			<td>
			-13
			</td>
		</tr>
<tr>
<td>
			Hong Leong Asia
			</td>
			<td>
			H22
			</td>
			<td>
			580
			</td>
			<td>
			0.2
			</td>
			<td>
			1.3
			</td>
			<td>
			-67
			</td>
		</tr>
<tr>
<td>
			EC World REIT
			</td>
			<td>
			BWCU
			</td>
			<td>
			580
			</td>
			<td>
			0.0
			</td>
			<td>
			0.7
			</td>
			<td>
			N/A
			</td>
		</tr>
<tr>
<td>
			CapitaR China Tr
			</td>
			<td>
			AU8U
			</td>
			<td>
			2109
			</td>
			<td>
			1.1
			</td>
			<td>
			0.0
			</td>
			<td>
			117
			</td>
		</tr>
<tr>
<td>
			Tianjin ZX USD
			</td>
			<td>
			T14
			</td>
			<td>
			2269
			</td>
			<td>
			-0.5
			</td>
			<td>
			-0.3
			</td>
			<td>
			65
			</td>
		</tr>
<tr>
<td>
			Sasseur REIT
			</td>
			<td>
			CRPU
			</td>
			<td>
			983
			</td>
			<td>
			-4.2
			</td>
			<td>
			-0.6
			</td>
			<td>
			N/A
			</td>
		</tr>
<tr>
<td>
			Hi-P
			</td>
			<td>
			H17
			</td>
			<td>
			1607
			</td>
			<td>
			1.8
			</td>
			<td>
			-1.0
			</td>
			<td>
			181
			</td>
		</tr>
<tr>
<td>
			China Sunsine
			</td>
			<td>
			QES
			</td>
			<td>
			456
			</td>
			<td>
			-1.1
			</td>
			<td>
			-5.1
			</td>
			<td>
			345
			</td>
		</tr>
</tbody></table>
 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 26 January 2021)

 

The five stocks of the Index that have seen the highest net institutional inflow proportionate to market capitalisation include Yangzijiang Shipbuilding, Wilmar International, Hi-P International, China Aviation Oil, CapitaLand China Trust and Hong Leong Asia. CapitaLand China Trust is scheduled to report its FY20 results (ended 30 Dec) before the open on 29 January, and has also changed the name of the REIT from CapitaLand Retail China Trust effective yesterday. The REIT name change followed the completion of completion of the proposed acquisition of the company which holds the Ascendas Xinsu portfolio on 4 January and completion of the proposed acquisition of the balance 49% of the shares of the company which holds Rock Square on 30 December. 
Hutchison Port Holdings Trust will report its FY20 financial results after the market close on 8 February, while Wilmar International will report its FY20 financial results after the close on 22 February. Sasseur REIT will report its FY20 financial results before the open on 26 February. 
The strongest of the 17 stocks of the FTSE ST China Index that were listed for the tenure of 10 years is Valuetronics Holdings with 24% annualised total returns. Last year Valuetronics Holdings, which generates revenue from industrial and commercial electronics in addition to consumer electronics established a manufacturing footprint in Vietnam. China Equity Index ETFs also Average 11% YTD Gain 
The four China-focused ETFs listed on SGX have a combined global AUM of S$3.9 billion and have recorded average gains of 11.3% through to 26 January. The recently listed Lion Hang Seng TECH ETF that invests into the 30 largest Chinese technology companies recorded the highest gain of 19.9%.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			Stock Code
			</td>
			<td>
			Currency
			</td>
			<td>
			Total Return YTD (%)
			</td>
			<td>
			Tot Asset S$ (M)
			</td>
			<td>
			Index Tracking
			</td>
		</tr>
<tr>
<td rowspan="2">
			Lion OCBC Securities Hang Seng TECH ETF
			</td>
			<td>
			HST
			</td>
			<td>
			SGD
			</td>
			<td rowspan="2">
			19.9
			</td>
			<td rowspan="2">
			            123 
			</td>
			<td rowspan="2">
			Hang Seng TECH
			</td>
		</tr>
<tr>
<td>
			HSS
			</td>
			<td>
			USD
			</td>
		</tr>
<tr>
<td>
			Lyxor China Enterprise (HSCEI) UCITS ETF
			</td>
			<td>
			P58
			</td>
			<td>
			USD
			</td>
			<td>
			9.0
			</td>
			<td>
			            575 
			</td>
			<td>
			Hang Seng China Enterprise (HSCEI) Index
			</td>
		</tr>
<tr>
<td>
			United SSE 50 China ETF
			</td>
			<td>
			JK8
			</td>
			<td>
			SGD
			</td>
			<td>
			7.3
			</td>
			<td>
			              30 
			</td>
			<td>
			SSE 50 Index
			</td>
		</tr>
<tr>
<td rowspan="2">
			Xtrackers MSCI China UCITS ETF
			</td>
			<td>
			TID
			</td>
			<td>
			SGD
			</td>
			<td rowspan="2">
			8.8
			</td>
			<td rowspan="2">
			3,200
			</td>
			<td rowspan="2">
			MSCI China TR Net Index
			</td>
		</tr>
<tr>
<td>
			LG9
			</td>
			<td>
			USD
			</td>
		</tr>
</tbody></table>
Source: SGX, Refinitiv and Bloomberg (Data as of 26 January 2021)
</body></html>





The FTSE ST China Index has generated a 12% gain in the 2021 YTD. Wilmar, Sunpower, Nanofilm, China Aviation and SIIC Environment have led the Index higher over the past 17 sessions with as many as 12 gainers, one stock unchanged and four decliners.    
	 
	
Wilmar has also been the top performing STI stock in the 2021 YTD with a 17% gain. The strongest of the 17 stocks of the FTSE ST China Index that have been listed for the tenure of 10 years is Valuetronics with 24% annualised total returns, followed by China Sunsine with 18% annualised total returns.   
	 
	The four China-focused ETFs listed on SGX have a combined global AUM of S$3.9 billion and have recorded average gains of 11% through to 26 January. The recently listed Lion Hang Seng TECH ETF that invests into the 30 largest Chinese technology companies recorded the highest gain of 20%.

 

 China Leads FDI Inflows in 2020, Potential for more China-ASEAN BRI in the New Norm?  
With China’s 4Q20 GDP growing 6.5% from 4Q19, the overall 2020 GDP growth has come in at 2.3% for the world’s second largest economy. Presently, China is the sole major global economy of the world to generate GDP growth in 2020. For this year consensus estimates have China growth rebounding to 8.0%. On 24 January, the UNCTAD Investment Trends Monitor reported a concentrated 69% decline in Foreign Direct Investment (“FDI”) into advanced economies in 2020, while FDI into developing economies grew 12%, with flows into China growing 4%. This placed China as the world’s largest FDI recipient in 2020.  
The ranking coincided with the aforementioned GDP growth, the investment facilitation program unveiled in October 2019 (click here), in addition to the CNY appreciating to the USD, with the USD/CNY moving from 6.96 at the end of 2019, to 6.53 at the end of 2020. Similarly, the IMF in its latest World Economic Outlook (click here) has attributed China’s strong recovery to effective containment measures, a forceful public investment response, and central bank liquidity support.  
Meanwhile the recent gradual appreciation of the CNY, the 31% decline of FDI into ASEAN in 2020, and assumption of a return to a new normal in 2H21, focus may return to Belt and Road Initiatives between China and ASEAN in the pre-designated sectors of energy, infrastructure and industrial parks.  Singapore FTSE ST China Index Generates 12% YTD Gain  
As discussed here, the FTSE ST China Index generated a 7% gain over the first five sessions of 2021, following a 7% total return in 2020. The Index has since extended the year-to-date gain to 12.2% on 26 January. The Index is comprised of 17 stocks of the FTSE ST All-Share Index that report more than 50% of their revenues or assets to China (click here for more). By comparsion the Hang Seng China Enterprises Index has gained 9.3% in the 2021 year to 26 January.  Wilmar International, Sunpower Group, Nanofilm Technologies, China Aviation Oil and SIIC Environment led the Index over the past 17 sessions. As noted on 11 January (click here), Nanofilm Technologies International is the newest entrant to the FTSE ST China Index with its prospectus detailing that two-thirds of its FY19 revenue was generated from invoices issued by its China operations.  Wilmar has been the top performing stock of both the FTSE ST China Index and the Straits Times Index in the 2021 year to 26 January, with a 17% gain. Yihai Kerry Arawana Holdings Co (“YKA”), the 89.99% subsidiary of Wilmar International has been trading on the Shenzhen Stock Exchange ChiNext Board since 15 October. The current valuation gap sees YKA maintaining a Price-to-Earnings (“P/E”) ratio of 118x, compared to Wilmar’s Price-to-Earnings ratio of 19x. At the end of 2020, China Consumer Goods stocks with a market value of at least US$1 billion maintained a median P/E ratio near 45x, compared to their peers across the exchanges of APAC financial centres trading at a median P/E ratio of 20x.  
Sunpower Group’s share price has gained 16% from 80 cents at the end of 2020, to 93 cents on 26 January. Sunpower Group announced on 12 January that it was acquiring the thermal business of SANLI Group and 25-year exclusive right to supply steam to SANLI (click here). This followed and announcement on the last trading session of 2020 that Sunpower International had entered into a Sales &amp; Purchase Agreement to divest the Manufacturing &amp; Services business to Nanjing Sunpower Holdings, enabling a strategic focus on its green Investments (click here).  
The 17 stocks of Index, sort by performances in the 2021 year to 26 January, are tabled below. 




			Index Constituent
			
			
			Stock Code
			
			
			Mkt Cap S$M
			
			
			Net Insti Inflow S$M
			
			
			Total Return YTD %
			
			
			10 Year Total Return %
			
		


			Wilmar Intl
			
			
			F34
			
			
			34430
			
			
			69.9
			
			
			17.2
			
			
			26
			
		


			Sunpower
			
			
			5GD
			
			
			755
			
			
			-1.9
			
			
			16.2
			
			
			98
			
		


			Nanofilm
			
			
			MZH
			
			
			3342
			
			
			-1.3
			
			
			15.0
			
			
			N/A
			
		


			China Aviation
			
			
			G92
			
			
			1015
			
			
			0.7
			
			
			11.3
			
			
			18
			
		


			SIIC Environment
			
			
			BHK
			
			
			497
			
			
			-3.6
			
			
			10.4
			
			
			-34
			
		


			Valuetronics
			
			
			BN2
			
			
			281
			
			
			-1.2
			
			
			9.3
			
			
			491
			
		


			HPH Trust USD
			
			
			NS8U
			
			
			2481
			
			
			-2.8
			
			
			8.9
			
			
			N/A
			
		


			YZJ Shipbldg SGD
			
			
			BS6
			
			
			3964
			
			
			21.5
			
			
			7.9
			
			
			-18
			
		


			China Everbright
			
			
			U9E
			
			
			658
			
			
			-2.8
			
			
			2.2
			
			
			-42
			
		


			Yanlord Land
			
			
			Z25
			
			
			2202
			
			
			-11.5
			
			
			1.8
			
			
			-13
			
		


			Hong Leong Asia
			
			
			H22
			
			
			580
			
			
			0.2
			
			
			1.3
			
			
			-67
			
		


			EC World REIT
			
			
			BWCU
			
			
			580
			
			
			0.0
			
			
			0.7
			
			
			N/A
			
		


			CapitaR China Tr
			
			
			AU8U
			
			
			2109
			
			
			1.1
			
			
			0.0
			
			
			117
			
		


			Tianjin ZX USD
			
			
			T14
			
			
			2269
			
			
			-0.5
			
			
			-0.3
			
			
			65
			
		


			Sasseur REIT
			
			
			CRPU
			
			
			983
			
			
			-4.2
			
			
			-0.6
			
			
			N/A
			
		


			Hi-P
			
			
			H17
			
			
			1607
			
			
			1.8
			
			
			-1.0
			
			
			181
			
		


			China Sunsine
			
			
			QES
			
			
			456
			
			
			-1.1
			
			
			-5.1
			
			
			345
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 26 January 2021)

 

The five stocks of the Index that have seen the highest net institutional inflow proportionate to market capitalisation include Yangzijiang Shipbuilding, Wilmar International, Hi-P International, China Aviation Oil, CapitaLand China Trust and Hong Leong Asia. CapitaLand China Trust is scheduled to report its FY20 results (ended 30 Dec) before the open on 29 January, and has also changed the name of the REIT from CapitaLand Retail China Trust effective yesterday. The REIT name change followed the completion of completion of the proposed acquisition of the company which holds the Ascendas Xinsu portfolio on 4 January and completion of the proposed acquisition of the balance 49% of the shares of the company which holds Rock Square on 30 December.  
Hutchison Port Holdings Trust will report its FY20 financial results after the market close on 8 February, while Wilmar International will report its FY20 financial results after the close on 22 February. Sasseur REIT will report its FY20 financial results before the open on 26 February.  
The strongest of the 17 stocks of the FTSE ST China Index that were listed for the tenure of 10 years is Valuetronics Holdings with 24% annualised total returns. Last year Valuetronics Holdings, which generates revenue from industrial and commercial electronics in addition to consumer electronics established a manufacturing footprint in Vietnam.  China Equity Index ETFs also Average 11% YTD Gain  
The four China-focused ETFs listed on SGX have a combined global AUM of S$3.9 billion and have recorded average gains of 11.3% through to 26 January. The recently listed Lion Hang Seng TECH ETF that invests into the 30 largest Chinese technology companies recorded the highest gain of 19.9%.




			Name
			
			
			Stock Code
			
			
			Currency
			
			
			Total Return YTD (%)
			
			
			Tot Asset S$ (M)
			
			
			Index Tracking
			
		


			Lion OCBC Securities Hang Seng TECH ETF
			
			
			HST
			
			
			SGD
			
			
			19.9
			
			
			            123 
			
			
			Hang Seng TECH
			
		


			HSS
			
			
			USD
			
		


			Lyxor China Enterprise (HSCEI) UCITS ETF
			
			
			P58
			
			
			USD
			
			
			9.0
			
			
			            575 
			
			
			Hang Seng China Enterprise (HSCEI) Index
			
		


			United SSE 50 China ETF
			
			
			JK8
			
			
			SGD
			
			
			7.3
			
			
			              30 
			
			
			SSE 50 Index
			
		


			Xtrackers MSCI China UCITS ETF
			
			
			TID
			
			
			SGD
			
			
			8.8
			
			
			3,200
			
			
			MSCI China TR Net Index
			
		


			LG9
			
			
			USD
			
		

Source: SGX, Refinitiv and Bloomberg (Data as of 26 January 2021)



FTSE ST China Index Maintains Double-Digit YTD Gain 