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Banks and consumers are top performers: SGX

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Banks and consumers are the best performing stocks among those with over S$1 billion market cap.

Singapore

BANKS and consumers are the best performing stocks among those with over S$1 billion market cap.

Over the last 12 months, the top five performers are DBS (30.9 per cent total return); Sheng Siong Group (24.4 per cent); UOB (19.4 per cent); Venture Corp (19.1 per cent) and Dairy Farm International (17.1 per cent), according to Singapore Exchange (SGX). Collectively, these five stocks produced an average one-year total return (or share price appreciation) of 22.2 per cent.

SGX lists close to 100 primary-listed stocks with a market capitalisation above S$1 billion.

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Among the 94 stocks, 39 have an ROE of above 10 per cent and produced an average one-year return of -3 per cent compared to the benchmark STI one-year return of 2.8 per cent.

Of these 39 stocks, seven are trusts (Reits, Stapled Trusts or Business Trusts), and the remaining 32 are companies spanning multiple industries from banks, consumer and technology to property development.

Over the last 12 months, banks and consumer stocks were the strongest play among the list of highest ROE billionaire stocks as compared to the STI.

Banks produced an average one-year total return of 15 per cent, largely on the back of higher net interest margins and loan growth.

Consumer stocks managed to record an average one-year total return of 3.1 per cent.

But as the list shows, high ROE does not always equate to price performance.

The five companies with the highest ROE are StarHub (44.6 per cent), Singapore Exchange (34.1 per cent), M1 Limited (29.1 per cent), Sheng Siong Group (26.8 per cent) and Dairy Farm Int'l (25.7 per cent).

StarHub with top ROE of 44.6 per cent was the worst performer among the 32 non-trust companies, losing 30.2 per cent in stock price from a year ago. Consequently, it also has the highest dividend yield of 9.6 per cent.

Among the 39 stocks, companies within the real estate sector were trading at a discount to book values. These companies include Hong Kong Land Holdings (0.4x), Guocoland (0.6x), Yanlord Land (0.6x), UOL Group (0.6x) and Sinarmas Land (0.7x).

Due to the nature of real estate assets, property developers tend to have distorted price to book (P/B) values, SGX pointed out. The recent new round of property cooling measures has also resulted in their prices moderating.

In the year to date, the top three highest yielding trusts are Frasers Hospitality Trust (7 per cent), OUE Commercial Reit (6.5 per cent) and Mapletree North Asia Commercial Reit (6.5 per cent).

Collectively, the seven trusts produced an average dividend yield of 6.1 per cent compared to the STI 12-month dividend yield of 4.4 per cent.