The term “blue chips stocks” is coined from poker whetherthe blue chips hold the highest value. Blue Chips stocks are thus the mostvaluable stocks that are traded in a market. These are the stocks that areusually the best performers in their particular markets with strong balancesheets and are often nationally recognized.
Most stock investors, especially in the Singapore stockmarket, prefer to invest their stock in blue chip stocks. This is because thereis the perceived notion that there are more certainty and less risk in suchstocks. This is true to some extent because such companies get to that level asa result of hard work and proper management. They can also afford the financialmuscle to keep them going in the future and are determined to continuegenerating investor value for as long as possible.
Top blue-chip stocksin Singapore
- UnitedOverseas Bank Limited– This is one of the three major banks in Singapore,and it is also a strong performer. Its stocks are publicly listed onSingapore’s stock exchange platform called the Singapore Exchange Limited(SGX). The bank offers a variety of financial services and has its operationsin different countries. Its robust business model has allowed it to generate alot of revenue and subsequently a lot of value. It is also well positioned tocontinue achieving growth in the Singapore stock market.
- Oversea-ChineseBanking Corporation Limited– This is another major bank that has operationsin Singapore and one that has also been performing exceptionally well in thecountry’s stock market. It is among the three biggest banks in Singapore, andit offers a variety of financial services including international banking,business banking, consumer banking, and global treasury & investmentmanagement. The company has also maintained steady and robust growth in its pre-provisionincome. This is thanks to its growing net interest margins, its bank assurancebusinesses, and wealth management.
- DBS GroupHoldings Ltd– This is Singapore’s largest bank in terms of assets. It isalso an international bank with more than 250 branches in 18 Asian markets. Itis also part of the Straits Times Index which consists of 30 major companies inSingapore. Some of the bank’s significant activities include banking,financing, mortgage financing, corporate advisory services, investmentholdings, stock broking, merchant banking, and trustee services among manyothers. The bank also has a history of buying back its shares as well as generatingvalue.
- SingaporeTelecommunications Limited– This is another one of Singapore’s major corporatesand blue-chip companies. It has a history of strong performance courtesy of itsrobust communications businesses that consist of numerous services that caterto the telecommunication needs of people in the country. It also has a longhistory of service in the industry. It is, therefore, able to generatesignificant value not only for its customers but also for the stakeholders.Some of its services include Integrated Information Technology andcommunications solutions, narrowband and broadband Internet services as well asMobile and fixed-line voice and data. Its business is currently doing well andis, therefore, an excellent blue chip to consider investing in.
- HongkongLand Holdings Limited– This is yet another blue-chip company that has its operationsin one of Singapore’s major sectors, the property market. The firm deals withproperty management, investment, and development. The company’s current portfolioconsists of luxury retail property and prime office space that covers roughly 800,000square meters of space in major Asian cities. It deals with the corporate,commercial and residential property segments.
- AscendasReal Estate Investment Trust– This is a REIT that is also traded on theSGX, and it is also one of the hottest stock picks for anyone looking to investin blue-chip stocks. It is well known in the country, and it also performs wellas a REIT with a 6.3% yield. Its performance is also enforced by the fact thatit has operations in Europe, particularly in the UK which is one of the topglobal markets. Analysts believe that the company also plans to expand itsportfolio to Australia in the future. This means that there will be more room togrow and thus opportunities for stock investors.
- SingaporeExchange Limited- The SGX itself is a blue-chip stock, and it is backed bystrong revenue growth over the years. It managed to grow toS$200 million withinfour years and 2018 its revenue reached a new high ever since it was listed inthe year 2000. 2018 also marked the year that it achieved its highest profitover the last five years. All this means that it has been performingexceptionally well for the past couple of years. Analysts, therefore, expect itto continue generating revenue and performing well in the future. It iscurrently quite an attractive stock pick with its current dividend yield at 4.1%.
- CapitaLandMall Trust– This is also another major Singapore REIT that has made a listand just as so as a well-known blue chip with a 5.3% dividend yield. It is oneof the best performing firms listed on the SGX. It might thus be a goodinvestment option for any investor looking to put money in Singapore’s stockmarket.
- GlobalLogistic Properties Limited- This is one of Asia’s largest logistics firmsthat also happens to be an investment holdings company. It also has otherbusinesses that deal with pharmaceuticals, machinery, electronics, retail, andfabrics among others. As far as the performance is concerned, the companyachieved 48% growth in the last three months of 2016, and it has experiencedmore growth since then. This is probably courtesy of its diverse businesses.
The above are just some of the blue-chip companies that areworth looking into in the Singapore stock market. Such stocks should beappealing to investors especially beginners because they are characterized bylow risk compared to the stocks of other companies that are not as big.Regardless, investors need to exercise caution when venturing into the marketbecause anything can happen.
(By Neha Gupta)