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

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Singapore’s healthcare sector is typically viewed as defensive and poised to enjoy multi-year growth prospects. Between July and Dec 2018, the sector saw six consecutive months of net inflows by institutional investors, following increased risk aversion on the back of higher market volatility and persistent US-China trade tensions. 
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In 2018, the iEdge SG All Healthcare Index generated a total return of -3.3%. This compares with total returns of -6.5% for the STI, -3.2% for the MSCI Asia Pacific Health Care Index, and -16.5% for the MSCI Asia Pacific ex-Japan Health Care Index. 
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	<li>In 2018, the five best-performing constituents of the iEdge SG All Healthcare Index were: Top Glove (+40.6%), Camsing Healthcare (+19.5%), Aoxin Q &amp; M (+10.5%), Pharmesis (+8.7%), and Riverstone (+7.9%). These five healthcare plays have averaged a total return of +8.6% over the past year.</li>
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The iEdge SG All Healthcare Index is a free-float, market capitalisation-weighted index that measures the performance of Singapore’s listed healthcare sector. In 2018, the Index, which comprises 31 constituents, generated a total return of -3.3%. This compares with total returns of -6.5% for the benchmark Straits Times Index (STI), -3.2% for the MSCI Asia Pacific Health Care Index, and -16.5% for the MSCI Asia Pacific ex-Japan Health Care Index.
<figure>
 <img src="https://api2.sgx.com/sites/default/files/2019-01/Slide1_1.PNG" alt="2018 Total Returns (Healthcare)">
 </figure>
 <div class="content-caption">2018 Total Returns (Healthcare)</div>
Source: Bloomberg Data

Sector Sees Six Straight Months of Inflows

Singapore’s healthcare sector is typically viewed as a defensive segment, poised to enjoy multi-year growth prospects. Drivers of Asia’s increased healthcare spending levels include accelerated ageing rates, the rise of lifestyle diseases like diabetes and hypertension, as well as growing disposable incomes. 

Between July and December 2018, the Healthcare sector saw six consecutive months of net inflows by institutional investors – S$8.1 million in July, S$2.7 million in August, S$10.1 million in September, S$4.3 million in October, S$10.5 million in November and S$4.0 million in December, according to SGX data. The sector has benefited from rotational flows, following increased risk aversion on the back of higher market volatility and persistent US-China trade tensions.
<figure>
 <img src="https://api2.sgx.com/sites/default/files/2019-01/12_1.png" alt="Healthcare Sector" s net institutional inflows in>
 </figure>
 <div class="content-caption">Healthcare Sector's Net Institutional Inflows in 2018</div>
Source: Bloomberg Data

Five Best Performers of Healthcare Index in 2018

In 2018, the five best-performing constituents of the iEdge SG All Healthcare Index were: Top Glove Corp (+40.6%), Camsing Healthcare (+19.5%), Aoxin Q &amp; M Dental (+10.5%), Pharmesis Intl (+8.7%), and Riverstone Holdings (+7.9%). Of the five stocks, two are makers of rubber/surgical gloves, which are indispensable in medical procedures and will benefit from the region’s increased patient demand.

Over the past year, these five healthcare plays have averaged a total return of +8.6%, bringing their three-year and five-year total returns to -3.5% and +63.3% respectively.

In 2018, the five least-performing constituents of the iEdge SG All Healthcare Index were: Asiamedic Ltd (-66.1%), Clearbridge Health (-53.0%), Cordlife Group (-51.2%), Medtecs Intl (-44.9%), and Thomson Medical Group (-41.9%). These five stocks have averaged a total return of -51.4% over the past year.

The table below details the ten best-performing constituents of the iEdge SG All Healthcare Index, sorted by 2018 total return.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Index Weight (%)
			</td>
			<td>
			Market Cap (S$M)
			</td>
			<td>
			Total Return 2018 (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			Total Return 5Y (%)
			</td>
			<td>
			Div Ind Yld (%)
			</td>
			<td>
			P/E (x)
			</td>
		</tr>
<tr>
<td>
			TOP GLOVE CORP
			</td>
			<td>
			BVA
			</td>
			<td>
			10.97
			</td>
			<td>
			4,729.4
			</td>
			<td>
			40.6
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
			<td>
			1.5
			</td>
			<td>
			32.1
			</td>
		</tr>
<tr>
<td>
			CAMSING HEALTHCARE
			</td>
			<td>
			BAC
			</td>
			<td>
			0.08
			</td>
			<td>
			29.4
			</td>
			<td>
			19.5
			</td>
			<td>
			18.8
			</td>
			<td>
			270.3
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			AOXIN Q &amp; M
			</td>
			<td>
			1D4
			</td>
			<td>
			0.26
			</td>
			<td>
			83.9
			</td>
			<td>
			10.5
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
			<td>
			0.9
			</td>
			<td>
			74.1
			</td>
		</tr>
<tr>
<td>
			PHARMESIS INTL
			</td>
			<td>
			BFK
			</td>
			<td>
			0.03
			</td>
			<td>
			5.8
			</td>
			<td>
			8.7
			</td>
			<td>
			-37.5
			</td>
			<td>
			-43.2
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			RIVERSTONE HLDGS
			</td>
			<td>
			AP4
			</td>
			<td>
			4.78
			</td>
			<td>
			852.2
			</td>
			<td>
			7.9
			</td>
			<td>
			1.7
			</td>
			<td>
			253.5
			</td>
			<td>
			2.0
			</td>
			<td>
			20.0
			</td>
		</tr>
<tr>
<td>
			HAW PAR CORP
			</td>
			<td>
			H02
			</td>
			<td>
			9.52
			</td>
			<td>
			2,585.8
			</td>
			<td>
			7.9
			</td>
			<td>
			57.7
			</td>
			<td>
			68.7
			</td>
			<td>
			2.1
			</td>
			<td>
			14.8
			</td>
		</tr>
<tr>
<td>
			RAFFLES MEDICAL
			</td>
			<td>
			BSL
			</td>
			<td>
			11.13
			</td>
			<td>
			1,958.9
			</td>
			<td>
			0.2
			</td>
			<td>
			-16.8
			</td>
			<td>
			14.5
			</td>
			<td>
			2.1
			</td>
			<td>
			27.3
			</td>
		</tr>
<tr>
<td>
			UG HEALTHCARE
			</td>
			<td>
			41A
			</td>
			<td>
			0.19
			</td>
			<td>
			41.6
			</td>
			<td>
			-1.2
			</td>
			<td>
			-56.5
			</td>
			<td>
			0.0
			</td>
			<td>
			1.1
			</td>
			<td>
			9.5
			</td>
		</tr>
<tr>
<td>
			TIANJIN ZHONGXIN PHARMA
			</td>
			<td>
			T14
			</td>
			<td>
			9.09
			</td>
			<td>
			1,568.6
			</td>
			<td>
			-2.5
			</td>
			<td>
			-16.3
			</td>
			<td>
			-3.8
			</td>
			<td>
			3.6
			</td>
			<td>
			8.5
			</td>
		</tr>
<tr>
<td>
			RHT HEALTH TRUST
			</td>
			<td>
			RF1U
			</td>
			<td>
			6.2
			</td>
			<td>
			588.3
			</td>
			<td>
			-5.5
			</td>
			<td>
			14.3
			</td>
			<td>
			72.7
			</td>
			<td>
			2.6
			</td>
			<td>
			54.8
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			8.6
			</td>
			<td>
			-3.5
			</td>
			<td>
			63.3
			</td>
			<td>
			1.6
			</td>
			<td>
			24.1
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 31 Dec 2018 and 7 Jan 2019)

Asian Patient Demand Set to Expand 

Across Asia and in Singapore, healthcare spending by governments is set to rise. Asia’s share of government spending in healthcare has room to expand – it is estimated to be on average one-third less than the OECD average, according to OECD and EY data.

<a href="https://ww2.frost.com/news/press-releases/frost-sullivan-double-digit-growth-rates-will-propel-apac-form-28-us2-trillion-global-healthcare-market-2018/">Frost &amp; Sullivan</a> has estimated that the Asia- Pacific healthcare industry expanded at 11.1% in 2018, accounting for 28% of the US$2 trillion global market. This represents one of the fastest growing regions in the world, with the global healthcare economy averaging only a 4.8% annual growth rate. The positive expansion is fuelled by increasing adoption of technology, innovative healthcare access programs and delivery of care outside traditional hospital settings.

Singapore to Boost Annual Health Spending

Likewise, when unveiling Singapore’s 2018 Budget last year, Finance Minister Heng Swee Keat said the government would put aside some S$10.2 billion for healthcare expenditure, adding that he expects Singapore’s average annual healthcare spending to rise from 2.2% of gross domestic product (GDP) today to almost 3% of GDP over the next decade. This represents an increase of nearly 0.8-percentage point of GDP, or about S$3.6 billion in today's dollars.

He also noted that within the next five years, Singapore will boost its patient care infrastructure by building six more general and community hospitals, four new polyclinics as well as more nursing homes and eldercare centres across the island.

Geographical Reach of Singapore Healthcare Plays 

Seven of the 10 largest constituents of the iEdge SG All Healthcare Index report more than a third of their group revenues to Asia Pacific ex-Singapore as well as Middle East and Europe. Their operations and assets span the following geographies: Malaysia, Vietnam, Thailand, Cambodia, Brunei, Indonesia, Hong Kong, China, Japan, South Korea, Bangladesh, India, Turkey, Bulgaria, and Macedonia.

Investors can participate in the structural Asian healthcare theme through SGX-listed healthcare stocks that are rapidly expanding into regional and global markets to meet growing patient needs.
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Singapore’s healthcare sector is typically viewed as defensive and poised to enjoy multi-year growth prospects. Between July and Dec 2018, the sector saw six consecutive months of net inflows by institutional investors, following increased risk aversion on the back of higher market volatility and persistent US-China trade tensions. 
	 
	
In 2018, the iEdge SG All Healthcare Index generated a total return of -3.3%. This compares with total returns of -6.5% for the STI, -3.2% for the MSCI Asia Pacific Health Care Index, and -16.5% for the MSCI Asia Pacific ex-Japan Health Care Index. 
	 
	In 2018, the five best-performing constituents of the iEdge SG All Healthcare Index were: Top Glove (+40.6%), Camsing Healthcare (+19.5%), Aoxin Q &amp; M (+10.5%), Pharmesis (+8.7%), and Riverstone (+7.9%). These five healthcare plays have averaged a total return of +8.6% over the past year.

The iEdge SG All Healthcare Index is a free-float, market capitalisation-weighted index that measures the performance of Singapore’s listed healthcare sector. In 2018, the Index, which comprises 31 constituents, generated a total return of -3.3%. This compares with total returns of -6.5% for the benchmark Straits Times Index (STI), -3.2% for the MSCI Asia Pacific Health Care Index, and -16.5% for the MSCI Asia Pacific ex-Japan Health Care Index.

      
    
    2018 Total Returns (Healthcare)
Source: Bloomberg Data

Sector Sees Six Straight Months of Inflows

Singapore’s healthcare sector is typically viewed as a defensive segment, poised to enjoy multi-year growth prospects. Drivers of Asia’s increased healthcare spending levels include accelerated ageing rates, the rise of lifestyle diseases like diabetes and hypertension, as well as growing disposable incomes. 

Between July and December 2018, the Healthcare sector saw six consecutive months of net inflows by institutional investors – S$8.1 million in July, S$2.7 million in August, S$10.1 million in September, S$4.3 million in October, S$10.5 million in November and S$4.0 million in December, according to SGX data. The sector has benefited from rotational flows, following increased risk aversion on the back of higher market volatility and persistent US-China trade tensions.

      
    
    Healthcare Sector's Net Institutional Inflows in 2018
Source: Bloomberg Data

Five Best Performers of Healthcare Index in 2018

In 2018, the five best-performing constituents of the iEdge SG All Healthcare Index were: Top Glove Corp (+40.6%), Camsing Healthcare (+19.5%), Aoxin Q &amp; M Dental (+10.5%), Pharmesis Intl (+8.7%), and Riverstone Holdings (+7.9%). Of the five stocks, two are makers of rubber/surgical gloves, which are indispensable in medical procedures and will benefit from the region’s increased patient demand.

Over the past year, these five healthcare plays have averaged a total return of +8.6%, bringing their three-year and five-year total returns to -3.5% and +63.3% respectively.

In 2018, the five least-performing constituents of the iEdge SG All Healthcare Index were: Asiamedic Ltd (-66.1%), Clearbridge Health (-53.0%), Cordlife Group (-51.2%), Medtecs Intl (-44.9%), and Thomson Medical Group (-41.9%). These five stocks have averaged a total return of -51.4% over the past year.

The table below details the ten best-performing constituents of the iEdge SG All Healthcare Index, sorted by 2018 total return.




			Name
			
			
			SGX Code
			
			
			Index Weight (%)
			
			
			Market Cap (S$M)
			
			
			Total Return 2018 (%)
			
			
			Total Return 3Y (%)
			
			
			Total Return 5Y (%)
			
			
			Div Ind Yld (%)
			
			
			P/E (x)
			
		


			TOP GLOVE CORP
			
			
			BVA
			
			
			10.97
			
			
			4,729.4
			
			
			40.6
			
			
			0.0
			
			
			0.0
			
			
			1.5
			
			
			32.1
			
		


			CAMSING HEALTHCARE
			
			
			BAC
			
			
			0.08
			
			
			29.4
			
			
			19.5
			
			
			18.8
			
			
			270.3
			
			
			0.0
			
			
			0.0
			
		


			AOXIN Q &amp; M
			
			
			1D4
			
			
			0.26
			
			
			83.9
			
			
			10.5
			
			
			0.0
			
			
			0.0
			
			
			0.9
			
			
			74.1
			
		


			PHARMESIS INTL
			
			
			BFK
			
			
			0.03
			
			
			5.8
			
			
			8.7
			
			
			-37.5
			
			
			-43.2
			
			
			0.0
			
			
			0.0
			
		


			RIVERSTONE HLDGS
			
			
			AP4
			
			
			4.78
			
			
			852.2
			
			
			7.9
			
			
			1.7
			
			
			253.5
			
			
			2.0
			
			
			20.0
			
		


			HAW PAR CORP
			
			
			H02
			
			
			9.52
			
			
			2,585.8
			
			
			7.9
			
			
			57.7
			
			
			68.7
			
			
			2.1
			
			
			14.8
			
		


			RAFFLES MEDICAL
			
			
			BSL
			
			
			11.13
			
			
			1,958.9
			
			
			0.2
			
			
			-16.8
			
			
			14.5
			
			
			2.1
			
			
			27.3
			
		


			UG HEALTHCARE
			
			
			41A
			
			
			0.19
			
			
			41.6
			
			
			-1.2
			
			
			-56.5
			
			
			0.0
			
			
			1.1
			
			
			9.5
			
		


			TIANJIN ZHONGXIN PHARMA
			
			
			T14
			
			
			9.09
			
			
			1,568.6
			
			
			-2.5
			
			
			-16.3
			
			
			-3.8
			
			
			3.6
			
			
			8.5
			
		


			RHT HEALTH TRUST
			
			
			RF1U
			
			
			6.2
			
			
			588.3
			
			
			-5.5
			
			
			14.3
			
			
			72.7
			
			
			2.6
			
			
			54.8
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			8.6
			
			
			-3.5
			
			
			63.3
			
			
			1.6
			
			
			24.1
			
		

Source: Bloomberg &amp; StockFacts (data as of 31 Dec 2018 and 7 Jan 2019)

Asian Patient Demand Set to Expand 

Across Asia and in Singapore, healthcare spending by governments is set to rise. Asia’s share of government spending in healthcare has room to expand – it is estimated to be on average one-third less than the OECD average, according to OECD and EY data.

Frost &amp; Sullivan has estimated that the Asia- Pacific healthcare industry expanded at 11.1% in 2018, accounting for 28% of the US$2 trillion global market. This represents one of the fastest growing regions in the world, with the global healthcare economy averaging only a 4.8% annual growth rate. The positive expansion is fuelled by increasing adoption of technology, innovative healthcare access programs and delivery of care outside traditional hospital settings.

Singapore to Boost Annual Health Spending

Likewise, when unveiling Singapore’s 2018 Budget last year, Finance Minister Heng Swee Keat said the government would put aside some S$10.2 billion for healthcare expenditure, adding that he expects Singapore’s average annual healthcare spending to rise from 2.2% of gross domestic product (GDP) today to almost 3% of GDP over the next decade. This represents an increase of nearly 0.8-percentage point of GDP, or about S$3.6 billion in today's dollars.

He also noted that within the next five years, Singapore will boost its patient care infrastructure by building six more general and community hospitals, four new polyclinics as well as more nursing homes and eldercare centres across the island.

Geographical Reach of Singapore Healthcare Plays 

Seven of the 10 largest constituents of the iEdge SG All Healthcare Index report more than a third of their group revenues to Asia Pacific ex-Singapore as well as Middle East and Europe. Their operations and assets span the following geographies: Malaysia, Vietnam, Thailand, Cambodia, Brunei, Indonesia, Hong Kong, China, Japan, South Korea, Bangladesh, India, Turkey, Bulgaria, and Macedonia.

Investors can participate in the structural Asian healthcare theme through SGX-listed healthcare stocks that are rapidly expanding into regional and global markets to meet growing patient needs.



Healthcare Sector’s Growth Prospects Draw Fund Flows

Pharmesis International

Healthcare Sector’s Growth Prospects Draw Fund Flows