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)

<ul>
<li>Industry Associations see ongoing transformation of Singapore’s F&amp;B industry as manufacturers look towards innovation, growth, and internationalisation.</li>
<li>The 10 biggest Packaged Foods &amp; Meats stocks in Singapore have averaged a 12.6% total return in the year thus far. This compared to 10.1% for Asia Pacific’s biggest Packaged Foods &amp; Meats stocks and 8.9% for the world’s biggest Packaged Foods &amp; Meats stocks.</li>
<li>
<a href="https://www.smartkarma.com/entities/19714" target="_blank" data-smartkarma-citation="entities:19714:1">Delfi Ltd (DELFI SP)</a>, <a href="https://www.smartkarma.com/entities/15597" target="_blank" data-smartkarma-citation="entities:15597:1">Japfa Ltd (JAP SP)</a>, <a href="https://www.smartkarma.com/entities/20972" target="_blank" data-smartkarma-citation="entities:20972:1">Super Group Ltd (SUPER SP)</a>, <a href="https://www.smartkarma.com/entities/9051" target="_blank" data-smartkarma-citation="entities:9051:1">Yeo Hiap Seng Ltd</a>…</li>
</ul>


Industry Associations see ongoing transformation of Singapore’s F&amp;B industry as manufacturers look towards innovation, growth, and internationalisation.
The 10 biggest Packaged Foods &amp; Meats stocks in Singapore have averaged a 12.6% total return in the year thus far. This compared to 10.1% for Asia Pacific’s biggest Packaged Foods &amp; Meats stocks and 8.9% for the world’s biggest Packaged Foods &amp; Meats stocks.

Delfi Ltd (DELFI SP), Japfa Ltd (JAP SP), Super Group Ltd (SUPER SP), Yeo Hiap Seng Ltd…


Key Drivers of the Packaged Food Industry

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Equity Bottom-Up

Wilmar has been coping with protracted softness in edible oil&nbsp;prices since early 2011.Coming into 2015, slowing oil palm acreage&nbsp;growth in Indonesia and Malaysia, coupled with more favourable&nbsp;biodiesel mandates in Indonesia, stirred an upbeat mood in the&nbsp;capital market on the firm's profit recovery, but prices have&nbsp;continued to decline.We believe that an abundant soybean supply--a substitute edible&nbsp;oil source--will limit palm oil price growth over the long term.In the downstream segment, Wilmar&rsquo;s oilseed crushing and refining&nbsp;business is plagued by severe industry overcapacity.Wilmar chose to diversify toward the sugar business amid the&nbsp;turmoil in the edible oil market. By the end of 2014, its sugar&nbsp;business contributed 9.4% of total sales, up from 6.8% in 2011.&nbsp;Diversification will reduce the firm's overall exposure to edible oil&nbsp;prices. Nonetheless, sugar prices are sluggish as well.Analyst: Dan Baker

Wilmar has been coping with protracted softness in edible oil&nbsp;prices since early 2011.Coming into 2015, slowing oil palm acreage&nbsp;growth in Indonesia and Malaysia, coupled with more favourable&nbsp;biodiesel mandates in Indonesia, stirred an upbeat mood in the&nbsp;capital market on the firm's profit recovery, but prices have&nbsp;continued to decline.We believe that an abundant soybean supply--a substitute edible&nbsp;oil source--will limit palm oil price growth over the long term.In the downstream segment, Wilmar&rsquo;s oilseed crushing and refining&nbsp;business is plagued by severe industry overcapacity.Wilmar chose to diversify toward the sugar business amid the&nbsp;turmoil in the edible oil market. By the end of 2014, its sugar&nbsp;business contributed 9.4% of total sales, up from 6.8% in 2011.&nbsp;Diversification will reduce the firm's overall exposure to edible oil&nbsp;prices. Nonetheless, sugar prices are sluggish as well.Analyst: Dan Baker

Lacklustre Long-Term Edible Oil Profitability Prospects Cap our Enthusiasm for Wilmar's Renaissance.

<ul><li class="p1">Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack from hard discounters and online competition.</li><li class="p1">The prolonged period of slow economic growth has conditioned consumers to be more price sensitive, and the emergence of the e-commerce channel is rapidly changing consumers' shopping behaviours.</li><li class="p2">In our opinion, the strongest antidote to these pressures is a strong brand.</li><li class="p2">In this report, we quantify the power of each company's brand by its ability to take pricing, using a number of metrics, and conclude that while brand strength varies widely across the consumer packaged goods space, beverages and tobacco generally enjoy stronger positions.</li><li class="p2">We also dive deep into cost advantages and show that while some of the large diversified CPG firms may generate economies of scope, economies of scale are more prevalent in industries with a homogeneous manufacturing process.</li></ul>Lead Analysts: Adam Fleck, CFA; Philip Gorham, CFA, FRM; R.J. Hottovy, CFA; Erin Lash, CFA; Ken Perkins, CFAFull report below the fold...&nbsp;

Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack from hard discounters and online competition.The prolonged period of slow economic growth has conditioned consumers to be more price sensitive, and the emergence of the e-commerce channel is rapidly changing consumers' shopping behaviours.In our opinion, the strongest antidote to these pressures is a strong brand.In this report, we quantify the power of each company's brand by its ability to take pricing, using a number of metrics, and conclude that while brand strength varies widely across the consumer packaged goods space, beverages and tobacco generally enjoy stronger positions.We also dive deep into cost advantages and show that while some of the large diversified CPG firms may generate economies of scope, economies of scale are more prevalent in industries with a homogeneous manufacturing process.Lead Analysts: Adam Fleck, CFA; Philip Gorham, CFA, FRM; R.J. Hottovy, CFA; Erin Lash, CFA; Ken Perkins, CFAFull report below the fold...&nbsp;

Morningstar Consumer Observer: Shopping for the CPG Brands Best Positioned for a New Era in Commerce

Singapore

Golden Agri-Resources Limited cultivates, harvests, processes, distributes, and sells crude palm oil and palm kernel.  The Company also refines crude palm oil into cooking oil, margarine, and shortening for sale and distribution.

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Golden Agri Resources (GGR SP)

Key Drivers of the Packaged Food Industry

Industry Associations see ongoing transformation of Singapore’s F&B industry as manufacturers look towards innovation, growth, and...

Singapore Exchange Ltd (SGX)

Lacklustre Long-Term Edible Oil Profitability Prospects Cap our Enthusiasm for Wilmar's Renaissance.

Wilmar has been coping with protracted softness in edible oil prices since early 2011.Coming into 2015, slowing oil palm acreage growth in...

Morningstar, Inc.

Morningstar Consumer Observer: Shopping for the CPG Brands Best Positioned for a New Era in Commerce

Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack...

Morningstar, Inc.

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