Singapore Markets open in 6 hrs 48 mins

August Straits Times Index Recap: Yangzijiang Shipbuilding Leads the Market Lower

Sudhan P.
Singapore buildings at night

Most of the Straits Times Index (SGX: ^STI) stocks were in the red last month. In all, 24 components were in negative territory; five were in the green while one – UOL Group Limited (SGX: U14) – ended the month unchanged at S$7.35. For the month, the Straits Times Index fell 5.9% to 3,106.5.

The biggest loser of the lot was shipbuilder, Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6); its shares plunged 36.4% to S$0.91, down from S$1.43 at the end of July.

In the middle of last month, Yangzijiang said that Ren Yuanlin, Yangzijiang’s executive chairman and controlling shareholder, is assisting in a confidential investigation carried out by certain government authorities in the country. Is it time to bail out on Yangzijiang’s shares amid the uncertainties? Maybe not – find out why here.

Along with Yangzijiang, shares in Hutchison Port Holdings Trust (SGX: NS8U) and Sembcorp Industries Ltd (SGX: U96) were also whacked last month. The former fell 28.6% to US$0.157 while the latter tumbled 11.5% to S$2.07.

Hutchison Port Holdings Trust had a poor quarter on the back of global trade tensions; revenue and other income for its 2019 second-quarter fell 1.4% year-on-year, while net profit tumbled 19.7%. Distribution per unit plummeted 29.6% to HK$0.06, down from HK$0.0852 a year back – perhaps no surprise given its abysmal track record.

Sembcorp Industries, on the other hand, had a mixed second quarter. Revenue fell 29% year on year to S$2.4 billion, but its earnings improved 20% to S$98 million. Sembcorp held its interim dividend steady at S$0.02 per share.

On the other end of the winner-loser spectrum, Thai Beverage Public Company Limited (SGX: Y92) emerged as the largest gainer of the Straits Times Index. The F&B firm’s shares rose 7.8% to S$0.90.

Thai Beverage had a strong third quarter as its revenue rose 3% to THB 62.7 billion thanks to higher domestic sales volume across all segments, while net profit climbed 22% to THB 6.65 billion. For a quick analysis of Thai Beverage’s various business divisions based on its H1 2019, you can jump in here.

All three of the STI’s real estate investment trusts (REITs) were also in the green, with CapitaLand Commercial Trust (SGX: C61U) leading the charge with a gain of 3.4%. Amid low interest rates and economic fears, Singapore REITs are seen as a haven, especially the blue-chip ones. At its unit price of S$2.13 at end-August, CapitaLand Commercial Trust had a distribution yield of just 4.1%, which is relatively low for a REIT.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, was valued at a price-to-earnings ratio of 10.3 and had a distribution yield of 3.8% as of 30 August 2019.

More reading

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of CapitaLand Commercial Trust. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Commercial Trust.

Motley Fool Singapore 2019