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 SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.
 
§  Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.
 
§  Consensus estimates are expecting oil prices to stabilise and…
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§  The SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.
 
§  Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.
 
§  Consensus estimates are expecting oil prices to stabilise and…



SGX's MOE Sector Sustains 4Q16 Momentum into 2017

<ul>
<li>In the 2016 calendar year, more than 100 companies were involved in share buybacks, with the buyback considerations amounting to S$826 million. <a href="https://www.smartkarma.com/entities/74" target="_blank" data-smartkarma-citation="entities:74">Singapore Airlines Ltd (SIA SP)</a>, <a href="https://www.smartkarma.com/entities/114" target="_blank" data-smartkarma-citation="entities:114">Oversea Chinese Banking Corp. Limited (OCBC SP)</a>, <a href="https://www.smartkarma.com/entities/2894" target="_blank" data-smartkarma-citation="entities:2894">Global Logistic Properties Ltd (GLP SP)</a>, <a href="https://www.smartkarma.com/entities/765" target="_blank" data-smartkarma-citation="entities:765">Olam International Ltd (OLAM SP)</a> and <a href="https://www.smartkarma.com/entities/22" target="_blank" data-smartkarma-citation="entities:22">DBS Group Holdings Ltd (DBS SP)</a> ranked highest in terms of buyback consideration value over the calendar year.</li>
<li>More recently, for the month of December 2016, there were a total of 13,915,200 shares…</li>
</ul>


In the 2016 calendar year, more than 100 companies were involved in share buybacks, with the buyback considerations amounting to S$826 million. Singapore Airlines Ltd (SIA SP), Oversea Chinese Banking Corp. Limited (OCBC SP), Global Logistic Properties Ltd (GLP SP), Olam International Ltd (OLAM SP) and DBS Group Holdings Ltd (DBS SP) ranked highest in terms of buyback consideration value over the calendar year.
More recently, for the month of December 2016, there were a total of 13,915,200 shares…


Over 100 Firms Conducted Share Buybacks Totaling S$826M in 2016

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Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

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Equity Bottom-Up

<ul><li>Good price momentum and low debt levels relative to its sector</li><li>New residential, commercial and landed property developments happening through 2016 should further propel revenue from the property division, revenue up by 32% YoY for the segment in 9M16</li><li>The company’s credit financing division should benefit from an expected solid 5% growth in the Malaysian economy; operating profit from credit financing grew 11% YoY in 9M16</li><li>HAP has delivered an ROE well above ASEAN Capital Goods and shown a good improvement in operating profit</li><li>Risks: Unexpected and sharp economic slowdown</li></ul>* Consensus Estimates

Good price momentum and low debt levels relative to its sectorNew residential, commercial and landed property developments happening through 2016 should further propel revenue from the property division, revenue up by 32% YoY for the segment in 9M16The company’s credit financing division should benefit from an expected solid 5% growth in the Malaysian economy; operating profit from credit financing grew 11% YoY in 9M16HAP has delivered an ROE well above ASEAN Capital Goods and shown a good improvement in operating profitRisks: Unexpected and sharp economic slowdown* Consensus Estimates

HAP: Property and Palm Farms Aid Price Momentum

<ul><li>Relatively strong analyst recommendation, low correlation with Western stock markets, and share price is less volatile relative to its sector</li><li>New residential, commercial and landed property developments happening through 2016 should further propel revenue from the property division, which accounted for 39% of operating profit in 1H16</li><li>The company’s credit financing division should benefit from an expected solid 5% growth in the Malaysian economy; operating profit from credit financing grew 13% YoY in 1H16</li><li>HAP has delivered an ROE well above ASEAN Capital Goods and shown a good improvement in operating profit</li><li>Risks: Unexpected and sharp economic slowdown</li></ul>* Consensus Estimates

Relatively strong analyst recommendation, low correlation with Western stock markets, and share price is less volatile relative to its sectorNew residential, commercial and landed property developments happening through 2016 should further propel revenue from the property division, which accounted for 39% of operating profit in 1H16The company’s credit financing division should benefit from an expected solid 5% growth in the Malaysian economy; operating profit from credit financing grew 13% YoY in 1H16HAP has delivered an ROE well above ASEAN Capital Goods and shown a good improvement in operating profitRisks: Unexpected and sharp economic slowdown* Consensus Estimates

HAP: Property and Palm Farms Grow Profitability

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David Riedel

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<ul>
<li>Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos.</li>
<li>ASEAN is a critical component of SE Asian stability, partnership with the US and should be a united front in protesting Chinese intrusions into the South China Sea.</li>
<li>A high-profile spat with Philippine president Duterte was an unfortunate distraction and an unhelpful development for the Philippines which benefits from strong U.S. support.</li>
<li>Thailand and Malaysia look like the best opportunities in ASEAN in the medium-term.</li>
<li>BUY…</li>
</ul>


Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos.
ASEAN is a critical component of SE Asian stability, partnership with the US and should be a united front in protesting Chinese intrusions into the South China Sea.
A high-profile spat with Philippine president Duterte was an unfortunate distraction and an unhelpful development for the Philippines which benefits from strong U.S. support.
Thailand and Malaysia look like the best opportunities in ASEAN in the medium-term.
BUY…


Takeaways from ASEAN - Investment Opportunities

Malaysia

Hap Seng Consolidated Berhad is an investment holding company.  The Company, through its subsidiaries, operates oil palm and cocoa plantations, trades heavy equipment and motor vehicles, fabricates and sells commercial trailers and tankers, provides leasing and money lending, and manufactures agricultural fertilizers, agro-chemicals, building materials, and plantation supplies.

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Hap Seng Consolidated (HAP MK)

SGX's MOE Sector Sustains 4Q16 Momentum into 2017

§ The SGX Maritime & Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in...

Singapore Exchange Ltd (SGX)

HAP: Property and Palm Farms Aid Price Momentum

Good price momentum and low debt levels relative to its sector New residential, commercial and landed property developments happening through 2016...

A. Stotz Investment Research

HAP: Property and Palm Farms Grow Profitability

Relatively strong analyst recommendation, low correlation with Western stock markets, and share price is less volatile relative to its sector New...

A. Stotz Investment Research

Takeaways from ASEAN - Investment Opportunities

Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos. ASEAN is a critical component of SE Asian stability, partnership with...

David Riedel

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SGX's MOE Sector Sustains 4Q16 Momentum into 2017

§ The SGX Maritime & Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in...

Singapore Exchange Ltd (SGX)

Over 100 Firms Conducted Share Buybacks Totaling S$826M in 2016

In the 2016 calendar year, more than 100 companies were involved in share buybacks, with the buyback considerations amounting to S$826 million....

Singapore Exchange Ltd (SGX)

HAP: Property and Palm Farms Aid Price Momentum

Good price momentum and low debt levels relative to its sector New residential, commercial and landed property developments happening through 2016...

A. Stotz Investment Research

HAP: Property and Palm Farms Grow Profitability

Relatively strong analyst recommendation, low correlation with Western stock markets, and share price is less volatile relative to its sector New...

A. Stotz Investment Research

Takeaways from ASEAN - Investment Opportunities

Obama continues the 'pivot to Asia' by attending the ASEAN meeting in Laos. ASEAN is a critical component of SE Asian stability, partnership with...

David Riedel