CapitaLand group of stocks outpaces global peers

Singapore

THE eight Singapore-listed stocks under the enlarged CapitaLand group generated higher average returns than their regional and global peers in the year to date, while also significantly outpacing broader benchmarks, the Singapore Exchange (SGX) said on Thursday.

They averaged a 3.3 per cent total return in the quarter to Sept 18, bringing their average total year-to-date return to 28.2 per cent.

This is above the average and median returns of both the 100 largest capitalised property stocks in the world as well as the 100 largest real estate stocks in the Asia-Pacific (APAC), which stood at 20 per cent and 16 per cent respectively, as at Sept 18. Each of the eight CapitaLand group stocks has also outperformed the average and median total returns of the 100 largest capitalised APAC real estate stocks.

Comprising real estate company CapitaLand, five real estate investment trusts (Reits), one hospitality trust and one business trust, the eight Singapore stocks have a combined market cap of S$53 billion. Malaysia-listed CapitaLand Malaysia Mall Trust is also part of the group.

For a global size comparison, the world's biggest capitalised real estate stock is American Tower Corp, with a market cap of about S$135 billion, while the 10th largest is Welltower, with a market value of S$50 billion.

Following the completion of CapitaLand's S$11 billion buyout of Ascendas-Singbridge on June 30, the group now maintains over 1,000 properties across more than 30 countries, with combined assets under management (AUM) of S$129 billion.

The eight stocks accounted for close to 12 per cent of the average daily turnover on the Singapore bourse year to date.

All eight have maintained comparatively high free-float ratios, ranging from 55 per cent for Ascott Residence Trust (Ascott Reit) to 92 per cent for Ascendas Hospitality Trust (A-HTrust). In July, the group proposed to combine Ascott Reit and A-HTrust. The merger is subject to unitholder approval, with the scheme meeting yet to be convened.

Aside from generating strong investor returns, all eight stocks have provided short-term trading opportunities for the more active and experienced investors, said SGX. They averaged at least one per cent swings between their intraday highs and lows on a daily basis for the 12 months to June 2019.

Leading the short-term movers was Ascendas India Trust, whose swings between daily highs and lows averaged 1.8 per cent. CapitaLand Mall Trust, CapitaLand Commercial Trust and Ascott Reit averaged 1.6 per cent daily trading ranges. Intraday one-minute volatility for the eight stocks was 17 per cent.

This momentum was driven by interest rate cuts and significant moves in US Treasuries this year, which affected interest rate-sensitive sectors such as Reits and banks, SGX noted. The US Treasury 10-year yields ended 2018 at 2.68 per cent, before sinking to a low of 1.43 per cent on Sept 3.

Meanwhile, US Federal Reserve chair Jerome Powell has cited trade policy developments and unsolved geopolitical risk as two key reasons for cutting interest rates by 25 basis points on Wednesday.

Five out of CapitaLand's seven Singapore Reits and trusts have recently reported growth in distribution per unit (DPU). The exceptions were CapitaLand Retail China Trust which posted a lower DPU from 5.39 Singapore cents a year ago to 5.13 cents for H1 2019, and A-HTrust which saw its DPU slipping from 1.35 Singapore cents to 1.28 cents for Q1 2019.