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





Singapore stocks that recently ranked highly for Growth Factor Exposure have kept pace, and been marginally stronger than Value stock counterparts in January (through to 21 Jan). The group of 20 Growth stocks averaged a 6% gain, compared to the 20 Value stocks averaging a 5% return.  
	 
	
In 2020, from April to Oct, the 20 Growth stocks doubled the returns of the 20 Value stocks, and outpaced the STI’s partial recovery. The 20 growth stocks ranked highest in terms of 3 year sales per share and earnings per share growth with in a group of more than 100 actively traded Singapore stocks. 
	 
	The strongest of the Growth stocks in the first 13 sessions were AEM Holdings and UMS Holdings averaging a 20% gain on S$40 million of net institutional inflow, while the strongest Value stock was Golden Agri-Resources with a 23% gains on S$7 million of net institutional inflow. 

 

AEM &amp; UMS Led Growth Stock Gainers in Early 2021  
Over the first 13 sessions of 2021, Singapore’s Growth stocks have edged higher than Value stocks, with respective average gains of 6% and 5%. The 20 stocks that ranked highly for growth factor exposure in mid-2020 maintain a combined market value of S$145 billion and were recipient to S$333 million of net institutional inflow over the past 13 sessions, following S$1.15 billion of net institutional outflow in 2020.  Leading the growth stocks over the past 13 sessions have been AEM Holdings and UMS Holdings which have averaged 20% gains on net institutional flows close to S$40 million. Like the Philadelphia Semiconductor Index the two stocks have posted double digit gains in the month this far, coinciding with reports of demand for semiconductors by global car manufacturers outweighing supply. While integrated circuits and semiconductors maintain an increasingly wide field of application, the Chairman and CEO of UMS Holdings did signal potential supply constraints last year, noting the resurgence of COVID-19, trade tensions and currency volatility meant the group would stay prudent and sharpen its production efficiencies and supply chain networks to cope with the challenges ahead.  Meanwhile, the strongest of the Value stocks over the past 13 sessions were Golden Agri-Resources with a 23% gain on S$7 million of net institutional inflow. Golden Agri-Resources grew its revenue 6% YoY in its 9MFY20 (ending 30 Sep), reaching almost US$5 billion, primarily attributable to higher average selling prices. However, third-quarter revenue saw a quarter-on-quarter decrease by seven percent due to lower sales volume. While the weekly moves of the Golden Agri-Resources share price were 60% correlated to the price of Crude Palm Oil between 2016 and 2018, there was little correlation from the end of 2018 through to the end of 2020.  The company noted in November that it had continued its sustainability programmes and initiatives despite the challenging situation due to the global pandemic. As of third quarter 2020, Golden Agri-Resources had achieved over 88 percent Traceability to the Plantation for its entire palm supply chain.  
The 20 stocks that ranked highly for value factor exposure in mid-2020 maintain a combined market value of S$104 billion and were recipient to S$71 million of net institutional inflow over the past 13 sessions, following S$570 million of net institutional outflow in 2020. Proportionate to market value, the 20 Value stocks saw less net institutional outflows than the 20 Growth Stocks in 2020, while also seeing less net institutional inflow in the 2021 year to 21 January.     Factor Exposures, Common Attributes and Differences in 2020 Returns  
Of the 20 stocks that ranked highest for growth factor exposure, six of the stocks also ranked among the 20 stocks with the highest value factor exposure. These were Hong Fok Corporation, Olam International, China Everbright Holdings, China Sunsine Chemical Holdings, Sasseur REIT and Yangzijiang Shipbuilding. Of the six stocks, the latter four stocks are also constituents of the FTSE ST China Index. Hong Fok Corporation, Sasseur REIT and China Sunsine Chemical Holdings also ranked among the 10 stocks with the highest multi-Factor exposure.   
The Factor Investing in Singapore Report by Nicolas Rabener and supported by Singapore Exchange was published last year and based on all available information collected on more than 100 stocks through to 30 June 2020 (click here for full report). Factor investing is a relatively new method of grouping that looks to link past and potential performances of stocks according to common factor attributes: 
 



Value stocks typically have the most inexpensive valuations or lowest valuations in terms of a screening, which in this case  applied an equal-weight combination of price-to-book (“P/B”) and price-to-earnings (“P/E”) multiples. 

 



Growth stocks typically display earnings growth and the two growth metrics used by FactorResearch for selecting stocks with Growth Factor exposure include 3-year sales-per-share and earnings-per share growth.  
	 

As shown in the table below, the Growth stocks outpaced the Value stocks for much of the year, during the tentative recovery in April, which then extended to a partial recovery through to the end of October. During that seven months, the 20 stocks with the most growth attributes doubled the returns of the 20 Singapore stocks with the most value attributes.




			Total Returns
			
			
			31 Dec 19- 
			
			
			23 Mar- 
			
			
			30 Oct-
			
			
			6 Nov-
			
			
			2021
			
		


			23-Mar
			
			
			30-Oct
			
			
			6-Nov
			
			
			31 Dec 20
			
			
			YTD
			
		


			STI
			
			
			-30%
			
			
			12%
			
			
			6%
			
			
			11%
			
			
			5%
			
		


			iEdge S-REIT Index
			
			
			-33%
			
			
			33%
			
			
			6%
			
			
			4%
			
			
			5%
			
		


			Growth (Median)
			
			
			-33%
			
			
			21%
			
			
			3%
			
			
			8%
			
			
			5%
			
		


			Value (Median)
			
			
			-34%
			
			
			16%
			
			
			1%
			
			
			8%
			
			
			4%
			
		


			Growth (Average)
			
			
			-33%
			
			
			32%
			
			
			3%
			
			
			11%
			
			
			6%
			
		


			Value (Average)
			
			
			-33%
			
			
			17%
			
			
			1%
			
			
			11%
			
			
			5%
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 20 January 2021)

 

The big moves down in March, then up in November, saw little difference in the performance of the two different styles of stocks- Growth and Value.  
This meant that in Singapore and globally, Growth stocks outperformed Value stocks in 2020. However, for the first two weeks of 2021, like the last two months of 2020, there has been little difference in the performance of Growth and Value stocks in Singapore. The performances of each of the 20 Growth stocks and Value stocks are tabled below, with the first table sort by the highest growth factor exposure and the second table sort by the highest value factor exposure.




			20 Stocks that Ranked Highest for Growth Exposure  
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			2020 Total Return 
			
			
			2021 Total Return to 20 Jan
			
			
			2020 Net Insti Flow S$M
			
			
			2021 YTD Net Insti Flow S$M 
			
		


			AEM Holdings
			
			
			AWX
			
			
			1129
			
			
			75%
			
			
			19%
			
			
			16.4
			
			
			24.6
			
		


			Cosco Shipping International
			
			
			F83
			
			
			661
			
			
			-15%
			
			
			5%
			
			
			-2.2
			
			
			-0.4
			
		


			BRC Asia
			
			
			BEC
			
			
			367
			
			
			3%
			
			
			6%
			
			
			1.3
			
			
			-1.3
			
		


			Dasin Retail Trust
			
			
			CEDU
			
			
			591
			
			
			-1%
			
			
			-3%
			
			
			-1.2
			
			
			-0.2
			
		


			China Everbright Water
			
			
			U9E
			
			
			672
			
			
			-25%
			
			
			4%
			
			
			-13.3
			
			
			-2.3
			
		


			GSH Corp
			
			
			BDX
			
			
			389
			
			
			-46%
			
			
			6%
			
			
			0.3
			
			
			0.0
			
		


			PropNex
			
			
			OYY
			
			
			298
			
			
			62%
			
			
			3%
			
			
			2.5
			
			
			-1.1
			
		


			Sasseur REIT
			
			
			CRPU
			
			
			983
			
			
			0%
			
			
			-1%
			
			
			-35.2
			
			
			-2.7
			
		


			Yangzijiang Shipbuilding
			
			
			BS6
			
			
			4195
			
			
			-11%
			
			
			14%
			
			
			-172.8
			
			
			43.1
			
		


			Frencken Group
			
			
			E28
			
			
			611
			
			
			47%
			
			
			8%
			
			
			9.9
			
			
			5.2
			
		


			Hong Fok Corp
			
			
			H30
			
			
			600
			
			
			-5%
			
			
			-4%
			
			
			6.1
			
			
			-1.4
			
		


			UOL Group
			
			
			U14
			
			
			6507
			
			
			-5%
			
			
			0%
			
			
			43.5
			
			
			-5.5
			
		


			Lippo Malls Indonesia Retail
			
			
			D5IU
			
			
			204
			
			
			-67%
			
			
			10%
			
			
			-14.9
			
			
			0.5
			
		


			Keppel Pacific Oak US REIT
			
			
			CMOU
			
			
			881
			
			
			-8%
			
			
			3%
			
			
			-11
			
			
			-1.8
			
		


			China Sunsine
			
			
			QES
			
			
			466
			
			
			-1%
			
			
			-3%
			
			
			-0.7
			
			
			-1.4
			
		


			DBS Group Holdings
			
			
			D05
			
			
			67297
			
			
			2%
			
			
			5%
			
			
			-605.8
			
			
			170.1
			
		


			Olam International
			
			
			O32
			
			
			5241
			
			
			-11%
			
			
			7%
			
			
			-29.8
			
			
			3.9
			
		


			Venture Corp
			
			
			V03
			
			
			5933
			
			
			25%
			
			
			5%
			
			
			168.6
			
			
			3.0
			
		


			UMS Holdings
			
			
			558
			
			
			693
			
			
			10%
			
			
			20%
			
			
			18.6
			
			
			15.0
			
		


			Oversea-Chinese Banking Corp
			
			
			O39
			
			
			47422
			
			
			-4%
			
			
			5%
			
			
			-531.8
			
			
			86.2
			
		


			Median
			
			
			 
			
			
			 
			
			
			-3%
			
			
			5%
			
			
			 
			
			
			 
			
		


			Average
			
			
			 
			
			
			 
			
			
			1%
			
			
			6%
			
			
			 
			
			
			 
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 20 January 2021) 
 




			20 Stocks that Ranked Highest for Value Exposure  
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			2020 Total Return 
			
			
			2021 Total Return to 20 Jan
			
			
			2020 Net Insti Flow S$M
			
			
			2021 YTD Net Insti Flow S$M 
			
		


			Yanlord Land
			
			
			Z25
			
			
			2202
			
			
			-2%
			
			
			2%
			
			
			-19.4
			
			
			-9.3
			
		


			HPH Trust
			
			
			NS8U
			
			
			2597
			
			
			24%
			
			
			14%
			
			
			-3.7
			
			
			-1.7
			
		


			China Everbright
			
			
			U9E
			
			
			672
			
			
			-25%
			
			
			4%
			
			
			-13.3
			
			
			-2.3
			
		


			Hong Fok
			
			
			H30
			
			
			600
			
			
			-5%
			
			
			-4%
			
			
			6.1
			
			
			-1.4
			
		


			OUE
			
			
			LJ3
			
			
			1032
			
			
			-16%
			
			
			-3%
			
			
			1.3
			
			
			-0.3
			
		


			GuocoLand
			
			
			F17
			
			
			1952
			
			
			-19%
			
			
			8%
			
			
			-11.3
			
			
			0.1
			
		


			Frasers Property
			
			
			TQ5
			
			
			3726
			
			
			-25%
			
			
			2%
			
			
			-8.1
			
			
			-1.2
			
		


			YZJ Shipbuilding
			
			
			BS6
			
			
			4195
			
			
			-11%
			
			
			14%
			
			
			-172.8
			
			
			43.1
			
		


			China Sunsine
			
			
			QES
			
			
			466
			
			
			-1%
			
			
			-3%
			
			
			-0.7
			
			
			-1.4
			
		


			Golden Agri-Resources
			
			
			E5H
			
			
			2488
			
			
			-30%
			
			
			23%
			
			
			-9.1
			
			
			6.5
			
		


			Tianjin Zhongxin
			
			
			T14
			
			
			2295
			
			
			7%
			
			
			3%
			
			
			-10.5
			
			
			-0.6
			
		


			CapitaLand
			
			
			C31
			
			
			17812
			
			
			-9%
			
			
			5%
			
			
			-58.7
			
			
			32.2
			
		


			Asian Pay Television
			
			
			S7OU
			
			
			210
			
			
			-23%
			
			
			-3%
			
			
			-5.2
			
			
			-1.6
			
		


			Singapore Press
			
			
			T39
			
			
			1942
			
			
			-47%
			
			
			8%
			
			
			-204.8
			
			
			7.8
			
		


			BHG Retail REIT
			
			
			BMGU
			
			
			299
			
			
			-16%
			
			
			6%
			
			
			15.2
			
			
			0.0
			
		


			Jardine Matheson
			
			
			J36
			
			
			54782
			
			
			3%
			
			
			1%
			
			
			-2.2
			
			
			-0.5
			
		


			Olam International
			
			
			O32
			
			
			5241
			
			
			-11%
			
			
			7%
			
			
			-29.8
			
			
			3.9
			
		


			Oxley
			
			
			5UX
			
			
			974
			
			
			-35%
			
			
			7%
			
			
			-0.2
			
			
			0.2
			
		


			Sasseur REIT
			
			
			CRPU
			
			
			983
			
			
			0%
			
			
			-1%
			
			
			-35.2
			
			
			-2.7
			
		


			Chip Eng Seng
			
			
			C29
			
			
			345
			
			
			-24%
			
			
			0%
			
			
			-7.8
			
			
			-0.1
			
		


			Median
			
			
			 
			
			
			 
			
			
			-14%
			
			
			4%
			
			
			 
			
			
			 
			
		


			Average
			
			
			 
			
			
			 
			
			
			-13%
			
			
			5%
			
			
			 
			
			
			 
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 19 January 2021)

 

As noted above, the above Growth and Value stocks include three stocks that also rank among the 10 highest stocks for multifactor exposure which includes Size, Momentum, Low Volatility, Quality and Dividend Yield. Quality exposure can also be used in conjunction with value exposure in order to attempt avoiding so-called Value traps. Of the 20 stocks with the highest value exposure tabled above, seven stocks: Hong Fok Corporation, Yangzijiang Shipbuilding, China Sunsine Chemical Holdings, Tianjin Zhongxin Pharmaceutical Co, BHG Retail REIT, Jardine Matheson and Sasseur REIT also ranked among the 50 stocks with the highest quality factor exposure. 



COSCO SHIPPING International (Singapore) (COS SP)

Lippo Malls Indonesia Retail Trust (LMRT SP)

Tianjin Zhongxin Phrmctl Gp Cp (600329 CH)

China Sunsine Chemical Holdings Ltd (CSSC SP)

Growth Stocks Edge Higher with Value Stocks in Early 2021

Gsh Corp Ltd

Growth Stocks Edge Higher with Value Stocks in Early 2021