SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

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§  The Consumer Staples Sector is made up of businesses less sensitive to economic cycles. In comparison, the performance of businesses in the Consumer Discretionary Sector tend to be more impacted by these cycles.
 
§  Globally, the MSCI World Consumer Staples Index has generated a 2.7% dividend inclusive YTD return while regionally, the MSCI AC Asia Pacific Consumer Staples Index generated a 5.7% dividend inclusive YTD return. This compared to a 1.3% decline and 0.8% gain for the…
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§  The Consumer Staples Sector is made up of businesses less sensitive to economic cycles. In comparison, the performance of businesses in the Consumer Discretionary Sector tend to be more impacted by these cycles.
 
§  Globally, the MSCI World Consumer Staples Index has generated a 2.7% dividend inclusive YTD return while regionally, the MSCI AC Asia Pacific Consumer Staples Index generated a 5.7% dividend inclusive YTD return. This compared to a 1.3% decline and 0.8% gain for the…




Consumer Staples Offered Investor Returns Amid Lower Growth Outlooks

Edgware Insights Pty Ltd

Wayne Murray

Independent Insight Provider

Equity Bottom-Up

We all knew these two would end up together eventually. How did it take them this long to tie the knot?JB Hi-Fi is in a trading halt as a result of them agreeing to acquire 100% of The Good Guys for $870m. The total costs of the offer is $894m which compares to Edgware’s assumed $987m, due to our inclusion of $90m working capital. The pro forma FY16 balance sheet shows working capital of $106m. This means that The Good Guys business has been acquired for $764m plus working capital. <ul><li>
Financial…</li></ul>

We all knew these two would end up together eventually. How did it take them this long to tie the knot?JB Hi-Fi is in a trading halt as a result of them agreeing to acquire 100% of The Good Guys for $870m. The total costs of the offer is $894m which compares to Edgware’s assumed $987m, due to our inclusion of $90m working capital. The pro forma FY16 balance sheet shows working capital of $106m. This means that The Good Guys business has been acquired for $764m plus working capital. 
Financial…

JBH & The Good Guys: How About a Toaster & Kettle as a Wedding Present?

Edgware called for some animal spirits from JB Hi-Fi in its pursuit of The Good Guys. It is a once in a generation opportunity to reshape the industry with JB Hi-Fi assuming the #1 position. We pictured a crouching tiger bristling in anticipation of the kill.  We had feared that the animal JB Hi-Fi CEO Richard Murray might conjure could be a less predatory but very adorable fluffy bunny. If the Australian Financial Review Street Talk article on Tuesday, 6 September is accurate, the tiger is on…

Edgware called for some animal spirits from JB Hi-Fi in its pursuit of The Good Guys. It is a once in a generation opportunity to reshape the industry with JB Hi-Fi assuming the #1 position. We pictured a crouching tiger bristling in anticipation of the kill.  We had feared that the animal JB Hi-Fi CEO Richard Murray might conjure could be a less predatory but very adorable fluffy bunny. If the Australian Financial Review Street Talk article on Tuesday, 6 September is accurate, the tiger is on…

JBH & The Good Guys: Animal Spirits - More Crouching Tiger, Less Fluffy Bunny

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<ul><li>Following a strong start in its first live month, Evidente's model portfolio under-performed in the month of August, falling by -3.0%, well below the ASX200 return of -1.6%.  Since inception on 1 July, the portfolio has generated an accumulated return of +4.2%, lower than the ASX200 return of +4.6%.</li><li>RIO and WES are on close watch due to growing risks of a pull-back in China's residential property markets, while significant restructuring costs and asset impairments at WES reflect poor earnings quality and poor capital allocation decisions by senior management.</li><li>Retail discretionary remains the portfolio's key cyclical overweight bet based on the prospect that there remains plenty of scope for discretionary spending to catch up to food retailing, while household sector balance sheets remain in good shape.  The model portfolio retains a strong  defensive tilt, with overweight bets in telcos, utilities and listed infrastructure stocks being funded by under-weights in financials and materials.</li></ul>

Following a strong start in its first live month, Evidente's model portfolio under-performed in the month of August, falling by -3.0%, well below the ASX200 return of -1.6%.  Since inception on 1 July, the portfolio has generated an accumulated return of +4.2%, lower than the ASX200 return of +4.6%.RIO and WES are on close watch due to growing risks of a pull-back in China's residential property markets, while significant restructuring costs and asset impairments at WES reflect poor earnings quality and poor capital allocation decisions by senior management.Retail discretionary remains the portfolio's key cyclical overweight bet based on the prospect that there remains plenty of scope for discretionary spending to catch up to food retailing, while household sector balance sheets remain in good shape.  The model portfolio retains a strong  defensive tilt, with overweight bets in telcos, utilities and listed infrastructure stocks being funded by under-weights in financials and materials.

Model Portfolio Monthly Update - Retain Strong Defensive Bias

<ul><li>Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  </li><li>Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. </li><li>When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.</li></ul>

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers, challenging the conventional view that the consumer is being weighed down by record levels of indebtedness and historically low wages growth.  This post provides an update on the performance of discretionary retailers and re-visits whether the fundamentals for the consumer and sector have changed.  Evidente continues to recommend an overweight bet in the interest sensitive discretionary retailers.  The RBA has little choice but to keep interest rates low for an extended period to ensure that consumption supports activity at a time when animal spirits in the corporate sector remain dormant. When using an alternative measure of indebtedness, Australia's consumer does not appear to be stretched.  In a climate when many of the blue chips in the ASX200 are ex-growth, Evidente believes that discretionary retailers offer strong growth prospects based on the expectation of continued strong growth in discretionary spending patterns.

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

Australia

Wesfarmers Ltd. owns retail chains, operates mines, writes insurance, manufactures and distributes industrial products, manufactures fertilizers and chemicals, and distributes liquefied petroleum gas and medical and industrial gases.

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Wesfarmers Ltd (WES AU)

Consumer Staples Offered Investor Returns Amid Lower Growth Outlooks

§ The Consumer Staples Sector is made up of businesses less sensitive to economic cycles. In comparison, the performance of businesses...

Singapore Exchange Ltd (SGX)

JBH & The Good Guys: How About a Toaster & Kettle as a Wedding Present?

We all knew these two would end up together eventually. How did it take them this long to tie the knot?JB Hi-Fi is in a trading halt as a result of...

Wayne Murray

JBH & The Good Guys: Animal Spirits - More Crouching Tiger, Less Fluffy Bunny

Edgware called for some animal spirits from JB Hi-Fi in its pursuit of The Good Guys. It is a once in a generation opportunity to reshape the...

Wayne Murray

Model Portfolio Monthly Update - Retain Strong Defensive Bias

Following a strong start in its first live month, Evidente's model portfolio under-performed in the month of August, falling by -3.0%, well below...

Sam Ferraro

Australian Discretionary Retailers Defy Record Low Wage Growth - Retain Overweight

Over the past 18 months, Evidente has recommended that Australian focussed investors have an overweight bet in discretionary retailers,...

Sam Ferraro

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