- Industrials were amongst Singapore’s three best performing Sectors in September. The 10 largest capitalised Industrial stocks averaged a 7.1% total return for the month, and followed with 1.2% average gains for the first two sessions of October.
- Of these Industrial 10 stocks, the five with the highest five-year history of comparative volatility to the STI (YZJ, Keppel Corp, Sembcorp Marine, Sembcorp Ind & ST Engineering) generated the five strongest performances in Sep, averaging a 12.7% gain.
- The Industrials Sector also ranked as Singapore’s stock Sector with the highest institutional inflow in September, with institutional net buys totalling S$192 million. This was the first month that institutions were net buyers of the Sector since April 2018.
Three key segments of the market – Banks, Communication Services and Industrials – make up between two-fifths to half of the market capitalisation of all stocks listed on SGX.
On a market capitalisation-weighted and dividend-inclusive basis, these three Sectors were the best performers in the month of September, with Banks and Industrials amongst the five strongest Sectors over the first nine months of 2018. The comparatively defensive Communication services segment has been amongst the five least performing Sectors over the past nine months.
Among the Bank and Communication Services segments, the comparatively larger stocks that led the Sector higher in September were DBS Group Holdings with a 4.6% total return, and StarHub with a 15.4% total return respectively.
10 Biggest Industrial stocks averaged a 7.1% Total Return in September
Within the Industrials Sector, a string of the comparatively larger capitalised stocks achieved a total returns in September that exceeded 5%. This included Keppel Corp (+6.6%), Singapore Tech Engineering (+6.6%), Sembcorp Industries (+13.2%), ComfortDelGro (+6.1%), Yangzijiang Shipbuilding (+15.9%) and Sembcorp Marine (+21.4%).
Overall, the 10 largest capitalised Industrial plays listed on SGX averaged a 7.1% total return in September.
Jardine Matheson Holdings and Jardine Strategic Holdings generated an average decline of 0.7% in September. Together the two conglomerates make up more than half the Industrials Sector’s combined market capitalisation. This meant that the market capitalisation-weighted return of the Industrials Sector was weighed down by these two stocks in September.
The average performances of the 10 current largest capitalised Industrial stocks over recent timeframes are illustrated below.
Institutional Inflow into Industrials Hits a High in September
The Industrials Sector ranked as Singapore’s stock Sector with the highest institutional inflow in September, with institution net buying totalling S$191.9 million. This was the first month that institutions were net buyers of the sector since April 2018, and the highest institutional net inflow into the Industrial Sector since January 2018.
Industrials Sector Institutional Net Buy (+) / Sell (-) S$M in 2018 YTD
Source: SGX Research, SGX StockFacts
September Sub-theme of Moves by Higher Beta Plays
Of the 10 largest capitalised Industrials stocks, the five with the highest long term five-year beta generated the five strongest performances in September, averaging a 12.7% gain. These five stocks were Yangzijiang Shipbuilding, Keppel Corp, Sembcorp Marine, Sembcorp Industries and Singapore Tech Engineering.
The five of the 10 largest capitalised Industrials stocks with the lowest beta averaged a 1.4% gain during the month of September.
The five-year beta represents a long term measure of the volatility of the stock compared to the broader market. The higher the beta, the higher the historical comparative volatility. The table below details the relative performances of the 10 largest capitalised Industrials stocks, and is ranked by the highest to the lowest long term beta. To see more details of each of the stocks below in SGX StockFacts click on the table below.
Note all performances provided in SGD terms, including USD quoted and traded securities. Source: Bloomberg, SGX Stockfacts (Data as of 2 October 2018)