Singapore's December market cap up 1.3%, led by gains from local banks

THE total value of Singapore stocks rose in December, led by gains from the local lenders that are expected to benefit from rising interest rates and economic recovery.

Total market capitalisation of Singapore's 665 counters edged up 1.3 per cent to S$858.1 billion on Dec 31 from S$847.2 billion as at end-November. The number of counters that gained outnumbered losers 257 to 234.

Mainboard-listed counters' total market value was 1.3 per cent higher than the previous month at S$846.2 billion. Catalist stocks, on the other hand, shed 0.1 per cent in total market value to S$11.9 billion.

According to data compiled by The Business Times, blue-chip stocks recorded stronger gains in December with the Straits Times Index (STI) constituents' total market capitalisation gaining 1.9 per cent to S$514.6 billion compared with S$505 billion a month earlier.

The STI ended 9.8 per cent higher in 2021, finishing the year at 3,123.68, with reinvested dividends boosting the total return of Singapore's benchmark to 13.6 per cent, according to data from the Singapore Exchange (SGX).

While investment activity remained resilient, Covid-19 remained the overarching market driver across the wider market, noted SGX market strategist Geoff Howie in a report.

Global semiconductor stocks rallied more than 40 per cent in 2021; global bank stocks gained 23 per cent, and global hospitality stocks ended the year in the red while global airlines ended flat, data from SGX show.

Market value gains across Singapore stocks on a month-to-month basis were lifted by the trio of local banks - DBS, OCBC and UOB - which make up the lion's share of the STI.

The banks emerged as the top 3 gainers in December. DBS' D05 market value was up S$7.2 billion from the previous month, UOB U11 gained S$2.4 billion while OCBC O39 rose S$1.9 billion.

The banks had outperformed as the market had priced in expectations of higher short-term interest rates, said head of research at Phillip Securities Paul Chew.

In the year ahead, market watchers remain upbeat on the prospects of banking stocks as inflationary pressures come into play.

"Singapore banks expect the business momentum to remain healthy in 2022, supporting a higher-than-pre-pandemic average loan growth of 5 per cent and the continued rise in fee income," said RHB analyst Shekhar Jaiswal in a Jan 3 report.

"The improving economic outlook would also be a positive on asset quality, resulting in benign credit cost," he added.

CapitaLand Investment 9CI and Sembcorp Industries U96 also recorded signficant gains in market value following major corporate actions.

The market value of CapitaLand Investment, which was spun out of CapitaLand in September last year, rose S$260.1 million on a month-to-month basis.

Sembcorp Industries too saw its market value increase by S$214.7 million. It had spun off its stake in Sembcorp Marine last year and is focusing on its sustainable solutions business with several green projects in the pipeline.

Also among top gainers were real estate investment trusts including Mapletree Logistics Trust M44U and Mapletree North Asia Commercial Trust RW0U which were up S$879.1 million and S$412 million respectively.

Others among the top 10 gainers were IHH Healthcare Q0F , Singapore Airlines C6L and SGX S68 .

Meanwhile, weakness was seen in regional consumer names over fears of the Omicron wave spreading to South-east Asia and triggering new lockdowns, Chew of Phillip Securities pointed out.

These counters include Thai Beverage Y92 , Dairy Farm International D01 and Jardine Cycle & Carriage C07 .

Dairy Farm International, for instance, shed S$539.7 million amid a tough operating environment as the initial demand from panic-buying of groceries tapered off. Its key associate, Shanghai-listed supermarket operator Yonghui Superstores Co, had also contributed to weaker profitability due to intensifying competition in China.

Jardine Matheson Holdings J36 posted the largest dip in market value in December with a S$2.3 billion decline from a month earlier. Top Glove's BVA market value maintained its downward trajectory, shedding S$1.5 billion as personal protective equipment makers lose their edge as the pandemic comes under control.

Other underperformers in terms of market value for the month of December were Prudential K6S , Hongkong Land H78 , Singtel Z74 , Zheneng Jinjiang Environment Holding Company BWM and CapitaLand Integrated Commercial Trust C38U .

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