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.

Equity Bottom-Up





Dasin Retail Trust topped Low Volatility factor exposure rankings of more than 100 actively traded Singapore stocks for the 12 months ending 30 June 2020. The 40 stocks with the highest rankings (i.e. lowest volatility) generated comparatively less declines than the STI over the past three months, 2020 YTD and past three years.   
	 
	
The 40 stocks with the lowest volatility included 19 Real Estate stocks that averaged 8% declines in the 2020 year to 21 Sep, on S$17 million in net institutional inflow. Since the 9 June STI high, the 19 Real Estate stocks averaged a 3% decline, bringing their average three year total return to 5%.  
	 
	Eight Real Estate stocks also made up the 10 of the 40 Low Volatility factor exposure stocks with the highest net institutional inflow proportionate to market capitalisation in the 2020 year to 21 Sep. Together the eight stocks averaged a 2% total return since 9 June, and a 3% total return in the 2020 year to 21 Sep.  

 

As detailed in the recent Factor Investing in Singapore Report by Nicolas Rabener, five classic equity factors that enjoy  broad support from the global research community include Value, Size, Momentum, Low Volatility, and Quality.  
The Factor Investing in Singapore Report (click here for full report), which was completed in collaboration with Singapore Exchange, ranked more than 100 stocks according to the Low Volatility Factor. The five stocks that saw the lowest volatility for the 12 months through to 30 June 2020 included Dasin Retail Trust, Bukit Sembawang Estates, Haw Par Corp, Wing Tai Holdings and Oversea-Chinese Banking Corp Of the five stocks Business Trust Dasin Retail Trust has performed the most defensively with a 1% total return in the 2020 year to 21 September. The industry standard is to take one or three years in price history for gauging the Low Volatility factor.



      
    
    Comparative Total Returns


The Factor Investing in Singapore report also noted that based on long term stock market and economic data in the United States – Low Volatility stocks tended to outperform in both economic slowdowns (along with Momentum and Quality) and economic recessions (along with Quality and Value). Low Volatility stocks were not observed to outperform in recovery and growth phases.  Real Estate Stocks with Low Volatility Draw Institutional Inflows in 2020 YTD    
As many as 19 of the 40 stocks represent the Real Estate sector, which is in-line with the number of Real Estate stocks represented by the group of more than 100 stocks.  
Moreover, as many as eight Real Estate stocks made up the 10 of the 40 Low Volatility factor exposure stocks with the highest net institutional inflow proportionate to market capitalisation in the 2020 year to 21 September. Together the eight stocks averaged a 2% total return since 9 June, and a 3% total return in the 2020 year to 21 September. 




			10 of the 40 stocks with most Low Volatility factor exposure (for 12M ending 30 June 2020) with highest Net Insti Flow proportionate to current market cap
			
			
			Code
			
			
			Mkt Cap (S$M)
			
			
			YTD Total Return %
			
			
			9 June 2020  - 21 Sep 2020 Total Return %
			
			
			Three Year Total Return %
			
			
			Net Insti Inflow YTD (S$M)
			
			
			Net Insti Inflow YTD /Current  Mkt Cap 
			
		


			VENTURE CORP
			
			
			V03
			
			
			5,536
			
			
			23.2
			
			
			24
			
			
			27
			
			
			227.1
			
			
			4.1%
			
		


			ASCENDAS REAL ESTATE INV TRT
			
			
			A17U
			
			
			11,802
			
			
			13.2
			
			
			2
			
			
			49
			
			
			382.1
			
			
			3.2%
			
		


			WING TAI HOLDINGS 
			
			
			W05
			
			
			1,345
			
			
			-13.4
			
			
			-5
			
			
			-12
			
			
			28.2
			
			
			2.1%
			
		


			PARKWAYLIFE REAL ESTATE
			
			
			C2PU
			
			
			2,541
			
			
			30.2
			
			
			21
			
			
			81
			
			
			39.9
			
			
			1.6%
			
		


			KEPPEL DC REIT
			
			
			AJBU
			
			
			4,834
			
			
			45.7
			
			
			25
			
			
			163
			
			
			67.7
			
			
			1.4%
			
		


			CAPITALAND COMMERCIAL TRUST
			
			
			C61U
			
			
			6,681
			
			
			-9.6
			
			
			-6
			
			
			20
			
			
			68.3
			
			
			1.0%
			
		


			HONG FOK CORP 
			
			
			H30
			
			
			534
			
			
			-19.1
			
			
			-11
			
			
			-17
			
			
			4.0
			
			
			0.7%
			
		


			KEPPEL REIT
			
			
			K71U
			
			
			3,773
			
			
			-7.1
			
			
			-6
			
			
			9
			
			
			20.8
			
			
			0.6%
			
		


			SINGAPORE TECH ENGINEERING
			
			
			S63
			
			
			10,626
			
			
			-9.4
			
			
			-3
			
			
			11
			
			
			52.2
			
			
			0.5%
			
		


			UOL GROUP 
			
			
			U14
			
			
			5,636
			
			
			-17.7
			
			
			-7
			
			
			-12
			
			
			19.5
			
			
			0.3%
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 21 September 2020).

 

After the next three stocks recipient to the highest net institutional inflow proportionate to market capitalisation in the 2020 year to 21 September, were all Real Estate stocks as well – PropNex, Dasin Retail Trust and OUE.   Ranking Stocks by Low Volatility Factor Exposure  
The table below provides the list of 40 stocks that were amongst the largest and most traded Singapore stocks that demonstrated Low Volatility exposure for the aforementioned period.




			Stocks with most Low Volatility factor exposure (for 12M ending 30 June 2020)
			
			
			Code
			
			
			Mkt Cap (S$M)
			
			
			YTD Total Return %
			
			
			9 June 2020  - 21 Sep 2020 Total Return %
			
			
			Three Year Total Return %
			
			
			30 Day Volatility %
			
			
			12M Volatility (to 21 Sep) %
			
			
			Net Insti Inflow YTD (S$M)
			
		


			DASIN RETAIL TRUST
			
			
			CEDU
			
			
			617
			
			
			0.7
			
			
			-2
			
			
			22
			
			
			21
			
			
			16
			
			
			1.3
			
		


			BUKIT SEMBAWANG ESTATES
			
			
			B61
			
			
			945
			
			
			-19.7
			
			
			-6
			
			
			-36
			
			
			8
			
			
			17
			
			
			-6.3
			
		


			HAW PAR CORP
			
			
			H02
			
			
			2,057
			
			
			-25.0
			
			
			-12
			
			
			-12
			
			
			18
			
			
			22
			
			
			-40.1
			
		


			WING TAI HOLDINGS
			
			
			W05
			
			
			1,345
			
			
			-13.4
			
			
			-5
			
			
			-12
			
			
			18
			
			
			24
			
			
			28.2
			
		


			OVERSEA-CHINESE BANKING CORP
			
			
			O39
			
			
			37,312
			
			
			-18.9
			
			
			-11
			
			
			-13
			
			
			12
			
			
			25
			
			
			-871.2
			
		


			KOUFU GROUP
			
			
			VL6
			
			
			366
			
			
			-11.7
			
			
			-1
			
			
			13
			
			
			16
			
			
			24
			
			
			-7.6
			
		


			SINGAPORE POST
			
			
			S08
			
			
			1,474
			
			
			-28.4
			
			
			-17
			
			
			-42
			
			
			17
			
			
			26
			
			
			-13.3
			
		


			NETLINK NBN TRUST
			
			
			CJLU
			
			
			3,761
			
			
			4.7
			
			
			-2
			
			
			36
			
			
			8
			
			
			25
			
			
			-12.0
			
		


			UNITED OVERSEAS BANK
			
			
			U11
			
			
			32,053
			
			
			-23.2
			
			
			-10
			
			
			-5
			
			
			12
			
			
			26
			
			
			-1,445.0
			
		


			ASIAN PAY TELEVISION TRUST
			
			
			S7OU
			
			
			226
			
			
			-20.7
			
			
			0
			
			
			-67
			
			
			21
			
			
			25
			
			
			-1.7
			
		


			RAFFLES MEDICAL GROUP
			
			
			BSL
			
			
			1,482
			
			
			-18.6
			
			
			-13
			
			
			-23
			
			
			16
			
			
			27
			
			
			-6.3
			
		


			UOL GROUP
			
			
			U14
			
			
			5,636
			
			
			-17.7
			
			
			-7
			
			
			-12
			
			
			17
			
			
			27
			
			
			19.5
			
		


			SINGAPORE TELECOMMUNICATIONS
			
			
			Z74
			
			
			36,087
			
			
			-32.9
			
			
			-15
			
			
			-30
			
			
			14
			
			
			26
			
			
			-807.6
			
		


			OUE
			
			
			LJ3
			
			
			1,027
			
			
			-20.1
			
			
			-5
			
			
			-32
			
			
			15
			
			
			27
			
			
			2.1
			
		


			DBS GROUP HOLDINGS
			
			
			D05
			
			
			50,757
			
			
			-19.4
			
			
			-12
			
			
			14
			
			
			14
			
			
			28
			
			
			-1,391.5
			
		


			SHENG SIONG GROUP
			
			
			OV8
			
			
			2,466
			
			
			36.4
			
			
			10
			
			
			95
			
			
			25
			
			
			29
			
			
			-14.8
			
		


			PROPNEX
			
			
			OYY
			
			
			216
			
			
			21.6
			
			
			13
			
			
			5
			
			
			32
			
			
			27
			
			
			0.7
			
		


			KEPPEL CORP
			
			
			BN4
			
			
			7,615
			
			
			-36.6
			
			
			-32
			
			
			-28
			
			
			39
			
			
			31
			
			
			-107.5
			
		


			GUOCOLAND
			
			
			F17
			
			
			1,728
			
			
			-25.5
			
			
			-6
			
			
			-29
			
			
			19
			
			
			29
			
			
			-10.4
			
		


			OLAM INTERNATIONAL
			
			
			O32
			
			
			4,026
			
			
			-26.4
			
			
			-13
			
			
			-28
			
			
			32
			
			
			29
			
			
			-34.2
			
		


			PARKWAYLIFE REAL ESTATE
			
			
			C2PU
			
			
			2,541
			
			
			30.2
			
			
			21
			
			
			81
			
			
			32
			
			
			31
			
			
			39.9
			
		


			HONG FOK CORP
			
			
			H30
			
			
			534
			
			
			-19.1
			
			
			-11
			
			
			-17
			
			
			24
			
			
			30
			
			
			4.0
			
		


			YANLORD LAND GROUP
			
			
			Z25
			
			
			2,163
			
			
			-2.3
			
			
			4
			
			
			-32
			
			
			22
			
			
			29
			
			
			-9.5
			
		


			SPH REIT
			
			
			SK6U
			
			
			2,432
			
			
			-17.0
			
			
			-1
			
			
			2
			
			
			10
			
			
			30
			
			
			-2.0
			
		


			CHIP ENG SENG CORP
			
			
			C29
			
			
			337
			
			
			-25.4
			
			
			-19
			
			
			-34
			
			
			31
			
			
			32
			
			
			-1.7
			
		


			CAPITALAND
			
			
			C31
			
			
			14,021
			
			
			-25.0
			
			
			-11
			
			
			-17
			
			
			14
			
			
			31
			
			
			-132.7
			
		


			FRASERS PROPERTY
			
			
			TQ5
			
			
			3,453
			
			
			-28.7
			
			
			-14
			
			
			-36
			
			
			21
			
			
			31
			
			
			-6.8
			
		


			SINGAPORE TECH ENGINEERING
			
			
			S63
			
			
			10,626
			
			
			-9.4
			
			
			-3
			
			
			11
			
			
			21
			
			
			31
			
			
			52.2
			
		


			KEPPEL INFRASTRUCTURE TRUST
			
			
			A7RU
			
			
			2,720
			
			
			6.5
			
			
			3
			
			
			23
			
			
			10
			
			
			31
			
			
			-2.5
			
		


			STARHUB
			
			
			CC3
			
			
			2,061
			
			
			-13.1
			
			
			-12
			
			
			-44
			
			
			18
			
			
			30
			
			
			-2.9
			
		


			HONGKONG LAND HOLDINGS
			
			
			H78
			
			
			11,829
			
			
			-30.6
			
			
			-15
			
			
			-43
			
			
			25
			
			
			30
			
			
			-125.7
			
		


			ASCENDAS REAL ESTATE INV TRT
			
			
			A17U
			
			
			11,802
			
			
			13.2
			
			
			2
			
			
			49
			
			
			14
			
			
			34
			
			
			382.1
			
		


			KEPPEL DC REIT
			
			
			AJBU
			
			
			4,834
			
			
			45.7
			
			
			25
			
			
			163
			
			
			22
			
			
			33
			
			
			67.7
			
		


			AIMS APAC REIT
			
			
			O5RU
			
			
			841
			
			
			-12.5
			
			
			-3
			
			
			4
			
			
			15
			
			
			34
			
			
			-16.6
			
		


			SINGAPORE AIRLINES
			
			
			C6L
			
			
			10,140
			
			
			-46.3
			
			
			-21
			
			
			-48
			
			
			26
			
			
			35
			
			
			-617.0
			
		


			COMFORTDELGRO CORP
			
			
			C52
			
			
			3,163
			
			
			-36.4
			
			
			-9
			
			
			-16
			
			
			24
			
			
			34
			
			
			-319.7
			
		


			KEPPEL REIT
			
			
			K71U
			
			
			3,773
			
			
			-7.1
			
			
			-6
			
			
			9
			
			
			19
			
			
			34
			
			
			20.8
			
		


			CAPITALAND COMMERCIAL TRUST
			
			
			C61U
			
			
			6,681
			
			
			-9.6
			
			
			-6
			
			
			20
			
			
			23
			
			
			35
			
			
			68.3
			
		


			VENTURE CORP
			
			
			V03
			
			
			5,536
			
			
			23.2
			
			
			24
			
			
			27
			
			
			28
			
			
			33
			
			
			227.1
			
		


			DAIRY FARM INTL HLDGS
			
			
			D01
			
			
			7,187
			
			
			-27.3
			
			
			-22
			
			
			-42
			
			
			24
			
			
			32
			
			
			-61.6
			
		


			Average
			
			
			 
			
			
			 
			
			
			-12
			
			
			-6
			
			
			-3
			
			
			20
			
			
			29
			
			
			 
			
		

 Source: SGX StockFacts, Refinitiv and Bloomberg (Data as of 21 September 2020). Note returns for Koufu Group and PropNex taken from respective IPO dates.

 

In the Spotlight: Factor Investing in Singapore Webinar  As detailed in the recent Factor Investing in Singapore Report by Nicolas Rabener (click here for full report), Low Volatility is one of five common Factors used by modern day analysts to characterise stocks. Nicolas Rabener is the Founder &amp; CEO of FactorResearch. The FactorResearch team provides quantitative solutions for factor investing in equity markets globally.  To watch FactorResearch’s 11 August webinar with the SGX Academy that delved deeper into the performance of classic equity factors in Singapore, such as value, growth, size, momentum, volatility, quality – click here.



Less Volatile Real Estate Stocks Draw Institutional Inflows in 2020 YTD

Yangzijiang Shipbuilding / Equity Bottom-Up

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
Singapore’s five most traded Industrial Stocks are all STI stocks and have made up 10% of the day-to-day combined turnover of all stocks listed in Singapore in the 2020 YTD and span transportation, conglomerate and shipbuilding companies. 
	 </li>
	<li>
Since the STI formed its 9 June high, through to 15 September, the most defensive of the five Industrial stocks was Yangzijiang Shipbuilding Holdings which declined 3.4% while the STI declined 9.5%. Yangzijiang was also recipient to S$21 million in net institutional inflow over the period. 
	 </li>
	<li>Yangzijiang reported a 34% YoY decline in 1HFY20 net profit attributable to shareholders (with a 17% YoY decline in 2QFY20). Despite temporary shutdowns in Feb to early March and challenging market conditions, the Group's new order wins of US$517 million for 1HFY20 was more than double that of 1HFY19.  </li>
</ul>
 

Singapore’s five most traded Industrial Stocks are all stocks of the Straits Times Index and have made up 10% of the day-to-day combined turnover of all stocks listed on Singapore Exchange in the 2020 year through to 15 September.  The five companies (sort by the most actively traded) are Singapore Airlines, ComfortDelGro Corporation, Jardine Matheson Holdings, Keppel Corporation And Yangzijiang Shipbuilding Holdings. All five have recently reported earnings, with results and outlooks of the companies detailed below. Singapore Airlines

<ul>
<li>SIA reported a net loss of S$1.1 billion for the fiscal first quarter ended 30 June 2020, compared with a net profit of S$111 million in the year-ago period</li>
	<li>1Q Group revenue declined 79.3% YoY to S$851 million; revenues were dominated by cargo contributions on the back of strong demand for airfreight</li>
	<li>Passenger carriage sank by 99.4% for SIA, 99.8% for SilkAir and 99.9% for Scoot, resulting in a 99.5% decline for the Group</li>
	<li>The recovery trajectory in international air travel is slower than initially expected
	<ul>
<li>Industry experts, including IATA and ICAO, expect that it will take between two to four years for passenger traffic numbers to return to pre-pandemic levels</li>
	</ul>
</li>
	<li>Our current view is that, by the end of FY20/21, the Group’s passenger capacity may reach less than half of its pre-COVID-19 levels</li>
	<li>We are reviewing the potential shape and size of our network over the longer term given COVID-19 and its impact on our passenger traffic and revenue, which will provide better clarity on the fleet size and mix the Group will need
	<ul>
<li>This review – expected to be completed by half-year – is likely to lead to a material impairment of the carrying values of older generation aircraft, particularly the A380 aircraft, which would account for approx $1 billion</li>
	</ul>
</li>
	<li>Global airfreight capacity is anticipated to remain constrained in the near term due to significantly lower bellyhold cargo capacity worldwide, which may help to sustain the current cargo load factors
	<ul>
<li>With progressive reopening of economies and as manufacturing resumes, there is likely to be a gradual pickup in general cargo demand even as urgent movement of medical supplies recede</li>
		<li>We will continue to optimise the usage of our freighters to capture demand opportunities and supplement our cargo capacity through the deployment of cargo-only passenger flights when justified</li>
	</ul>
</li>
	<li>The Group continues to pursue cost management measures and will explore additional means to shore up liquidity as necessary
	<ul>
<li>Fresh liquidity from the recent rights issue will boost our financial position to tackle COVID-19 challenges</li>
	</ul>
</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/6B16X1096MX5ZAC5/625476_bu-q1fy2021.pdf">here</a> for full business update.

 

ComfortDelGro Corporation

<ul>
<li>Revenue for the first six months ended 30 June 2020 fell 20.8% YoY to S$1.53 billion, battered by the global shutdown brought on by COVID-19</li>
	<li>The Group reported a half-year loss of S$6.0 million, compared to a net profit of $146.3 million in the previous period; without government reliefs totalling S$60.1 million, the Group would have recorded a net loss of S$66.1 million</li>
	<li>The full economic impact of COVID-19 is still unfolding, the scale and duration of which remains uncertain</li>
	<li>Governments have provided significant temporary relief for the near-term but the sustainability of such reliefs is uncertain</li>
	<li>The future global economy post-COVID-19 will be different, arising from socio-economic factors such as work from home arrangements and changes to supply chain management</li>
	<li>With the challenging outlook, revenues are expected to remain depressed and margins under pressure</li>
	<li>The Group is monitoring the situation and adapting to changing circumstances by ensuring its service levels are maintained while refining its internal cost structures and operational efficiencies</li>
	<li>Notwithstanding the current uncertainties, with a strong balance sheet the Group remains committed to its long-term mobility strategy and continues to transform and build its capabilities, while looking for growth opportunities in overseas markets</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/OPCJPYPDHXO2GNLE/627824_COMFORTDELGRO%20-%20Media%20Release-CDG%20Results%20for%20Q2FY2020.pdf">here</a> for full results release.

 

Jardine Matheson Holdings

<ul>
<li>For the six months ended 30 June 2020, Jardine Matheson reported underlying profit of US$373 million, down 49% YoY</li>
	<li>Revenue was 21% lower at US$15.9 billion, while revenue, including 100% of associates and joint ventures, fell 11% to US$44.9 billion</li>
	<li>The Group’s performance and profitability in 1H2020 were significantly impacted by COVID-19 and the restrictions imposed to contain it</li>
	<li>Greater China was mainly affected in 1Q, while Southeast Asia felt the impact of the pandemic increasingly in 2Q</li>
	<li>The Group’s balance sheet and funding position remain strong – as at 30 June 2020, it had liquidity of US$13.9 billion, consisting of US$7.6 billion in cash reserves and US$6.3 billion in unused, committed debt facilities</li>
	<li>The pandemic continues to create uncertainty and volatility and trading conditions in 2H are expected to continue to be challenging</li>
	<li>While there were some signs of recovery in certain of the Group’s businesses in 2Q, the possibility of further waves of the pandemic make it difficult to predict performance in 2H</li>
	<li>The Group is focused both on driving operational performance across its businesses, and on identifying and taking the potential opportunities which are emerging from the pandemic to drive future growth</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/NGPW617YW0XH30TZ/625723_JMH.pdf">here</a> for full results release.

 

Keppel Corporation

<ul>
<li>Keppel Corp reported a net loss of S$537 million for the half year ended 30 June 2020, compared to a net profit of S$356 million for 1H 2019, after S$930 million of impairments mainly related to Keppel Offshore &amp; Marine’s (Keppel O&amp;M) stranded assets, receivables, stocks and share of impairment provisions from Floatel</li>
	<li>Excluding impairments, the Group would have registered net profit of S$393 million for 1H 2020, 5% higher YoY</li>
	<li>The Group’s 1H2020 revenue of S$3.2 billion was slightly lower compared to the S$3.3 billion achieved in 1H2019</li>
	<li>Lower contributions from property trading projects in China, power and gas sales, environmental engineering projects and asset management were partially offset by higher revenues from O&amp;M projects and the consolidation of M1 from March 2019</li>
	<li>Against this challenging backdrop, further rightsizing will be required at Keppel O&amp;M to ensure that its fixed overhead costs can be brought down in line with the realities for the industry
	<ul>
<li>To this end, the CEO and management of Keppel O&amp;M have volunteered to take a base salary reduction of between 5% and 10% as a demonstration of collective resolve and to set the tone from the top</li>
		<li>In solidarity with Keppel O&amp;M, the senior executive management of Keppel Corp will also take a base salary reduction of between 5% and 10%, while the directors of Keppel Corp and Keppel O&amp;M will take a 10% reduction in their annual fees</li>
	</ul>
</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/ZDNE80O3L950DWSO/625697_1.%20KCL%202Q2020%20-%20Financial%20Statements.pdf">here</a> for full results release.

 

Yangzijiang Shipbuilding

<ul>
<li>Total revenue fell 32% YoY to RMB4.8 billion for the second quarter ended 30 June 2020, primarily due to the lower revenue from trading business</li>
	<li>Core shipbuilding revenue of RMB3.0 billion for 2Q was comparable to the year-ago quarter's RMB3.1 billion, with gross margin improving from 18% to 22%</li>
	<li>Net profit attributable to shareholders for 2Q 2020 was RMB774 million, down 17% YoY</li>
	<li>Since April 2020, the Group’s operations have resumed full capacity, and it has fully made up for lost time due to the temporary shutdown in February to early March</li>
	<li>Vessel deliveries were on schedule, including several New Panamax dry bulkers completed and delivered by YAMIC
	<ul>
<li>In July 2020, the Group delivered a 12,600TEU containership, the largest containership ever built in its history</li>
	</ul>
</li>
	<li>COVID-19 has weighed on the price of new vessels and charter rates, and further dampened ship-owners’ sentiment and the outlook for the shipbuilding industry</li>
	<li>Global new shipbuilding orders for 1H2020 has declined to the lowest level since 1996 to 5.7 million CGT
	<ul>
<li>Outstanding order book to fleet ratio also decreased further to 7.8% at the end of June 2020 compared to 9.4% at the beginning of 2020</li>
	</ul>
</li>
	<li>Despite the challenging market conditions, the Group’s new order wins of US$517 million for 1H2020 was more than double that of 1H2019
	<ul>
<li>These new orders for the 15 vessels included two 14,000TEU dual-fuel containerships and two 690FEU LNG-tank carriers</li>
		<li>As at 30 June 2020, the Group had an outstanding order book of US$2.6 billion for 62 vessels, and was ranked No. 2 in China and No. 7 in the world by outstanding orderbook</li>
		<li>These orders will keep the Group’s yard facilities at a healthy utilisation rate till early 2022 and provide a stable revenue stream for at least the next 1.5 years</li>
	</ul>
</li>
</ul>
 Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/7ZM2D0CQWVKWLWP1/626403_Announcement_2Q2020_FINAL.pdf">here</a> for full results release.
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Singapore’s five most traded Industrial Stocks are all STI stocks and have made up 10% of the day-to-day combined turnover of all stocks listed in Singapore in the 2020 YTD and span transportation, conglomerate and shipbuilding companies. 
	 
	
Since the STI formed its 9 June high, through to 15 September, the most defensive of the five Industrial stocks was Yangzijiang Shipbuilding Holdings which declined 3.4% while the STI declined 9.5%. Yangzijiang was also recipient to S$21 million in net institutional inflow over the period. 
	 
	Yangzijiang reported a 34% YoY decline in 1HFY20 net profit attributable to shareholders (with a 17% YoY decline in 2QFY20). Despite temporary shutdowns in Feb to early March and challenging market conditions, the Group's new order wins of US$517 million for 1HFY20 was more than double that of 1HFY19.  

 

Singapore’s five most traded Industrial Stocks are all stocks of the Straits Times Index and have made up 10% of the day-to-day combined turnover of all stocks listed on Singapore Exchange in the 2020 year through to 15 September.  The five companies (sort by the most actively traded) are Singapore Airlines, ComfortDelGro Corporation, Jardine Matheson Holdings, Keppel Corporation And Yangzijiang Shipbuilding Holdings. All five have recently reported earnings, with results and outlooks of the companies detailed below.  Singapore Airlines


SIA reported a net loss of S$1.1 billion for the fiscal first quarter ended 30 June 2020, compared with a net profit of S$111 million in the year-ago period
	1Q Group revenue declined 79.3% YoY to S$851 million; revenues were dominated by cargo contributions on the back of strong demand for airfreight
	Passenger carriage sank by 99.4% for SIA, 99.8% for SilkAir and 99.9% for Scoot, resulting in a 99.5% decline for the Group
	The recovery trajectory in international air travel is slower than initially expected
	
Industry experts, including IATA and ICAO, expect that it will take between two to four years for passenger traffic numbers to return to pre-pandemic levels
	

	Our current view is that, by the end of FY20/21, the Group’s passenger capacity may reach less than half of its pre-COVID-19 levels
	We are reviewing the potential shape and size of our network over the longer term given COVID-19 and its impact on our passenger traffic and revenue, which will provide better clarity on the fleet size and mix the Group will need
	
This review – expected to be completed by half-year – is likely to lead to a material impairment of the carrying values of older generation aircraft, particularly the A380 aircraft, which would account for approx $1 billion
	

	Global airfreight capacity is anticipated to remain constrained in the near term due to significantly lower bellyhold cargo capacity worldwide, which may help to sustain the current cargo load factors
	
With progressive reopening of economies and as manufacturing resumes, there is likely to be a gradual pickup in general cargo demand even as urgent movement of medical supplies recede
		We will continue to optimise the usage of our freighters to capture demand opportunities and supplement our cargo capacity through the deployment of cargo-only passenger flights when justified
	

	The Group continues to pursue cost management measures and will explore additional means to shore up liquidity as necessary
	
Fresh liquidity from the recent rights issue will boost our financial position to tackle COVID-19 challenges
	


 Click here for full business update.

 

ComfortDelGro Corporation


Revenue for the first six months ended 30 June 2020 fell 20.8% YoY to S$1.53 billion, battered by the global shutdown brought on by COVID-19
	The Group reported a half-year loss of S$6.0 million, compared to a net profit of $146.3 million in the previous period; without government reliefs totalling S$60.1 million, the Group would have recorded a net loss of S$66.1 million
	The full economic impact of COVID-19 is still unfolding, the scale and duration of which remains uncertain
	Governments have provided significant temporary relief for the near-term but the sustainability of such reliefs is uncertain
	The future global economy post-COVID-19 will be different, arising from socio-economic factors such as work from home arrangements and changes to supply chain management
	With the challenging outlook, revenues are expected to remain depressed and margins under pressure
	The Group is monitoring the situation and adapting to changing circumstances by ensuring its service levels are maintained while refining its internal cost structures and operational efficiencies
	Notwithstanding the current uncertainties, with a strong balance sheet the Group remains committed to its long-term mobility strategy and continues to transform and build its capabilities, while looking for growth opportunities in overseas markets

 Click here for full results release.

 

Jardine Matheson Holdings


For the six months ended 30 June 2020, Jardine Matheson reported underlying profit of US$373 million, down 49% YoY
	Revenue was 21% lower at US$15.9 billion, while revenue, including 100% of associates and joint ventures, fell 11% to US$44.9 billion
	The Group’s performance and profitability in 1H2020 were significantly impacted by COVID-19 and the restrictions imposed to contain it
	Greater China was mainly affected in 1Q, while Southeast Asia felt the impact of the pandemic increasingly in 2Q
	The Group’s balance sheet and funding position remain strong – as at 30 June 2020, it had liquidity of US$13.9 billion, consisting of US$7.6 billion in cash reserves and US$6.3 billion in unused, committed debt facilities
	The pandemic continues to create uncertainty and volatility and trading conditions in 2H are expected to continue to be challenging
	While there were some signs of recovery in certain of the Group’s businesses in 2Q, the possibility of further waves of the pandemic make it difficult to predict performance in 2H
	The Group is focused both on driving operational performance across its businesses, and on identifying and taking the potential opportunities which are emerging from the pandemic to drive future growth

 Click here for full results release.

 

Keppel Corporation


Keppel Corp reported a net loss of S$537 million for the half year ended 30 June 2020, compared to a net profit of S$356 million for 1H 2019, after S$930 million of impairments mainly related to Keppel Offshore &amp; Marine’s (Keppel O&amp;M) stranded assets, receivables, stocks and share of impairment provisions from Floatel
	Excluding impairments, the Group would have registered net profit of S$393 million for 1H 2020, 5% higher YoY
	The Group’s 1H2020 revenue of S$3.2 billion was slightly lower compared to the S$3.3 billion achieved in 1H2019
	Lower contributions from property trading projects in China, power and gas sales, environmental engineering projects and asset management were partially offset by higher revenues from O&amp;M projects and the consolidation of M1 from March 2019
	Against this challenging backdrop, further rightsizing will be required at Keppel O&amp;M to ensure that its fixed overhead costs can be brought down in line with the realities for the industry
	
To this end, the CEO and management of Keppel O&amp;M have volunteered to take a base salary reduction of between 5% and 10% as a demonstration of collective resolve and to set the tone from the top
		In solidarity with Keppel O&amp;M, the senior executive management of Keppel Corp will also take a base salary reduction of between 5% and 10%, while the directors of Keppel Corp and Keppel O&amp;M will take a 10% reduction in their annual fees
	


 Click here for full results release.

 

Yangzijiang Shipbuilding


Total revenue fell 32% YoY to RMB4.8 billion for the second quarter ended 30 June 2020, primarily due to the lower revenue from trading business
	Core shipbuilding revenue of RMB3.0 billion for 2Q was comparable to the year-ago quarter's RMB3.1 billion, with gross margin improving from 18% to 22%
	Net profit attributable to shareholders for 2Q 2020 was RMB774 million, down 17% YoY
	Since April 2020, the Group’s operations have resumed full capacity, and it has fully made up for lost time due to the temporary shutdown in February to early March
	Vessel deliveries were on schedule, including several New Panamax dry bulkers completed and delivered by YAMIC
	
In July 2020, the Group delivered a 12,600TEU containership, the largest containership ever built in its history
	

	COVID-19 has weighed on the price of new vessels and charter rates, and further dampened ship-owners’ sentiment and the outlook for the shipbuilding industry
	Global new shipbuilding orders for 1H2020 has declined to the lowest level since 1996 to 5.7 million CGT
	
Outstanding order book to fleet ratio also decreased further to 7.8% at the end of June 2020 compared to 9.4% at the beginning of 2020
	

	Despite the challenging market conditions, the Group’s new order wins of US$517 million for 1H2020 was more than double that of 1H2019
	
These new orders for the 15 vessels included two 14,000TEU dual-fuel containerships and two 690FEU LNG-tank carriers
		As at 30 June 2020, the Group had an outstanding order book of US$2.6 billion for 62 vessels, and was ranked No. 2 in China and No. 7 in the world by outstanding orderbook
		These orders will keep the Group’s yard facilities at a healthy utilisation rate till early 2022 and provide a stable revenue stream for at least the next 1.5 years
	


 Click here for full results release.



Yangzijiang Most Defensive of SG’s Most Active Industrials Since 9 June 

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<ul>
<li>
In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019. 
	 </li>
	<li>
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.   
	 </li>
	<li>The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.</li>
</ul>
  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click <a href="https://www.sgx.com/research-education/market-updates/20200804-buyback-consideration-modern-low-earnings-take-centre">here</a> for more) and up from S$12.6 million in June (click <a href="https://www.sgx.com/research-education/market-updates/20200701-more-80-singapore-stocks-conducted-buybacks-1h20">here</a> for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August. 
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%. 
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-09/Capture.PNG' alt='Buyback Consideration' />
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-09/Capture%201.PNG' alt='Buyback Consideration' />
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Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year. As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco. The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stocks
			</td>
			<td>
			Number of Shares/units Authorised for Purchase in Current Mandate
			</td>
			<td>
			Total Number of Shares/units Purchased in August 2020
			</td>
			<td>
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			</td>
			<td>
			Average Price Paid S$
			</td>
			<td>
			Cumulative Number of Shares/units purchased in Mandate to date
			</td>
		</tr>
<tr>
<td>
			SINGAPORE TECHNOLOGIES ENGINEERING
			</td>
			<td>
			62,429,441
			</td>
			<td>
			2,000,000
			</td>
			<td>
			$6,834,114
			</td>
			<td>
			$3.417
			</td>
			<td>
			5,000,000
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORPORATION
			</td>
			<td>
			36,410,340
			</td>
			<td>
			1,120,600
			</td>
			<td>
			$5,198,660
			</td>
			<td>
			$4.639
			</td>
			<td>
			1,120,600
			</td>
		</tr>
<tr>
<td>
			GLOBAL INVESTMENTS
			</td>
			<td>
			161,476,125
			</td>
			<td>
			6,800,000
			</td>
			<td>
			$933,582
			</td>
			<td>
			$0.137
			</td>
			<td>
			11,000,800
			</td>
		</tr>
<tr>
<td>
			AEM HOLDINGS
			</td>
			<td>
			27,331,270
			</td>
			<td>
			145,000
			</td>
			<td>
			$592,621
			</td>
			<td>
			$4.087
			</td>
			<td>
			145,000
			</td>
		</tr>
<tr>
<td>
			FIRST RESOURCES
			</td>
			<td>
			158,268,446
			</td>
			<td>
			418,400
			</td>
			<td>
			$545,419
			</td>
			<td>
			$1.304
			</td>
			<td>
			418,400
			</td>
		</tr>
<tr>
<td>
			STRACO CORPORATION
			</td>
			<td>
			86,213,958
			</td>
			<td>
			550,000
			</td>
			<td>
			$273,354
			</td>
			<td>
			$0.497
			</td>
			<td>
			550,000
			</td>
		</tr>
<tr>
<td>
			SINGAPORE O&amp;G
			</td>
			<td>
			47,680,300
			</td>
			<td>
			803,724
			</td>
			<td>
			$196,268
			</td>
			<td>
			$0.244
			</td>
			<td>
			1,999,990
			</td>
		</tr>
<tr>
<td>
			GKE CORPORATION
			</td>
			<td>
			78,853,189
			</td>
			<td>
			1,500,000
			</td>
			<td>
			$118,742
			</td>
			<td>
			$0.079
			</td>
			<td>
			10,857,800
			</td>
		</tr>
<tr>
<td>
			AVARGA
			</td>
			<td>
			94,710,834
			</td>
			<td>
			539,800
			</td>
			<td>
			$81,101
			</td>
			<td>
			$0.150
			</td>
			<td>
			539,800
			</td>
		</tr>
<tr>
<td>
			CHINA SUNSINE CHEMICAL HOLDINGS
			</td>
			<td>
			97,226,160
			</td>
			<td>
			210,000
			</td>
			<td>
			$74,532
			</td>
			<td>
			$0.355
			</td>
			<td>
			210,000
			</td>
		</tr>
<tr>
<td>
			YHI INTERNATIONAL
			</td>
			<td>
			29,229,581
			</td>
			<td>
			200,000
			</td>
			<td>
			$65,077
			</td>
			<td>
			$0.325
			</td>
			<td>
			200,000
			</td>
		</tr>
<tr>
<td>
			HRNETGROUP
			</td>
			<td>
			100,652,263
			</td>
			<td>
			128,700
			</td>
			<td>
			$63,618
			</td>
			<td>
			$0.494
			</td>
			<td>
			128,700
			</td>
		</tr>
<tr>
<td>
			EUROSPORTS GLOBAL
			</td>
			<td>
			26,220,160
			</td>
			<td>
			300,000
			</td>
			<td>
			$49,787
			</td>
			<td>
			$0.166
			</td>
			<td>
			1,333,900
			</td>
		</tr>
<tr>
<td>
			JAPAN FOODS HOLDING
			</td>
			<td>
			17,360,290
			</td>
			<td>
			100,000
			</td>
			<td>
			$29,671
			</td>
			<td>
			$0.297
			</td>
			<td>
			235,700
			</td>
		</tr>
<tr>
<td>
			MDR
			</td>
			<td>
			89,039,757
			</td>
			<td>
			300,900
			</td>
			<td>
			$26,361
			</td>
			<td>
			$0.088
			</td>
			<td>
			300,900
			</td>
		</tr>
<tr>
<td>
			BAN LEONG TECHNOLOGIES
			</td>
			<td>
			11,392,300
			</td>
			<td>
			62,500
			</td>
			<td>
			$15,929
			</td>
			<td>
			$0.255
			</td>
			<td>
			62,500
			</td>
		</tr>
<tr>
<td>
			CHOO CHIANG HOLDINGS
			</td>
			<td>
			20,800,000
			</td>
			<td>
			46,800
			</td>
			<td>
			$9,862
			</td>
			<td>
			$0.211
			</td>
			<td>
			55,800
			</td>
		</tr>
<tr>
<td>
			INTRACO
			</td>
			<td>
			10,292,587
			</td>
			<td>
			5,000
			</td>
			<td>
			$1,253
			</td>
			<td>
			$0.251
			</td>
			<td>
			5,000
			</td>
		</tr>
<tr>
<td>
			Total
			</td>
			<td>
			 
			</td>
			<td>
			15,231,424
			</td>
			<td>
			$15,109,950
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments. 
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click <a href="http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/company_announcements">here</a>). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.
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In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019.  
	 
	
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.    
	 
	The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.

  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click here for more) and up from S$12.6 million in June (click here for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August.  
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%.  
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.



      
    
    Buyback Consideration

      
    
    Buyback Consideration


Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year.  As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco.  The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.




			Stocks
			
			
			Number of Shares/units Authorised for Purchase in Current Mandate
			
			
			Total Number of Shares/units Purchased in August 2020
			
			
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			
			
			Average Price Paid S$
			
			
			Cumulative Number of Shares/units purchased in Mandate to date
			
		


			SINGAPORE TECHNOLOGIES ENGINEERING
			
			
			62,429,441
			
			
			2,000,000
			
			
			$6,834,114
			
			
			$3.417
			
			
			5,000,000
			
		


			KEPPEL CORPORATION
			
			
			36,410,340
			
			
			1,120,600
			
			
			$5,198,660
			
			
			$4.639
			
			
			1,120,600
			
		


			GLOBAL INVESTMENTS
			
			
			161,476,125
			
			
			6,800,000
			
			
			$933,582
			
			
			$0.137
			
			
			11,000,800
			
		


			AEM HOLDINGS
			
			
			27,331,270
			
			
			145,000
			
			
			$592,621
			
			
			$4.087
			
			
			145,000
			
		


			FIRST RESOURCES
			
			
			158,268,446
			
			
			418,400
			
			
			$545,419
			
			
			$1.304
			
			
			418,400
			
		


			STRACO CORPORATION
			
			
			86,213,958
			
			
			550,000
			
			
			$273,354
			
			
			$0.497
			
			
			550,000
			
		


			SINGAPORE O&amp;G
			
			
			47,680,300
			
			
			803,724
			
			
			$196,268
			
			
			$0.244
			
			
			1,999,990
			
		


			GKE CORPORATION
			
			
			78,853,189
			
			
			1,500,000
			
			
			$118,742
			
			
			$0.079
			
			
			10,857,800
			
		


			AVARGA
			
			
			94,710,834
			
			
			539,800
			
			
			$81,101
			
			
			$0.150
			
			
			539,800
			
		


			CHINA SUNSINE CHEMICAL HOLDINGS
			
			
			97,226,160
			
			
			210,000
			
			
			$74,532
			
			
			$0.355
			
			
			210,000
			
		


			YHI INTERNATIONAL
			
			
			29,229,581
			
			
			200,000
			
			
			$65,077
			
			
			$0.325
			
			
			200,000
			
		


			HRNETGROUP
			
			
			100,652,263
			
			
			128,700
			
			
			$63,618
			
			
			$0.494
			
			
			128,700
			
		


			EUROSPORTS GLOBAL
			
			
			26,220,160
			
			
			300,000
			
			
			$49,787
			
			
			$0.166
			
			
			1,333,900
			
		


			JAPAN FOODS HOLDING
			
			
			17,360,290
			
			
			100,000
			
			
			$29,671
			
			
			$0.297
			
			
			235,700
			
		


			MDR
			
			
			89,039,757
			
			
			300,900
			
			
			$26,361
			
			
			$0.088
			
			
			300,900
			
		


			BAN LEONG TECHNOLOGIES
			
			
			11,392,300
			
			
			62,500
			
			
			$15,929
			
			
			$0.255
			
			
			62,500
			
		


			CHOO CHIANG HOLDINGS
			
			
			20,800,000
			
			
			46,800
			
			
			$9,862
			
			
			$0.211
			
			
			55,800
			
		


			INTRACO
			
			
			10,292,587
			
			
			5,000
			
			
			$1,253
			
			
			$0.251
			
			
			5,000
			
		


			Total
			
			
			 
			
			
			15,231,424
			
			
			$15,109,950
			
			
			 
			
			
			 
			
		

Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments.  
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click here). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.



11 Companies Commence New Share Buyback Mandates in August

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For the past 12 weeks, the 10 S-REITs recipient to the Sector’s highest net institutional inflows (proportionate to market capitalisation) included seven of the S-REIT Sector’s best performers over the period, including Keppel DC REIT which has been amongst the 25 strongest performing global REITs in the 2020 YTD. 
	 </li>
	<li>
These 10 S-REITs averaged a 6% total return from 9 June through to 28 August, whilst the remaining S-REITs averaged a 9% decline. The iEdge S-REIT Leaders Index generated a 3% decline over the 12 weeks, in-line with the global REIT market.  
	 </li>
	<li>
Sabana REIT saw the S-REITs’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 Aug, the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.
</li>
</ul>
 

Globally there are more than 800 stocks that make up the REIT Sector, with a combined market capitalisation of US$1.8 trillion (S$2.4 trillion). The FTSE EPRA/NAREIT Global REIT Index represents approximately two-thirds of the S$1.8 trillion combined market capitalisation and has generated a declined a 17% decline in the 2020 year to 28 August. Like most equity benchmarks, the Index formed its post-23 March high on 9 June which coincided with the beginnings of the second wave of COVID-19 across the United States. Similarly, the iEdge S-REIT Leaders Index formed its post-23 March high on 9 June, and has since declined 3%. Over the 12 week period the S-REIT sector was recipient to S$147 million in net institutional outflows. A total of 13 trusts of the S-REIT Sector saw net institutional inflows over the 12 weeks. The 10 trusts with the highest net institutional inflows between 10 June to 28 June, proportionate to current market capitalisation included seven of the best performing REITs over the period. Together the 10 trusts generated an average gain of 6% over the 12 weeks, whilst the remaining REITs averaged a 9% decline. 
Sabana REIT saw the S-REIT Sectors’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 August (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/OZZOXHVNDL7FV4HU/94f78e53d56f79823f6693002a11cab7be59d2c671523099a4385830a84e4205">here</a>), the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor. 
The table below sorts the S-REIT Sector to the highest net institutional inflows between proportionate to current market capitalisation between 10 June and 28 August 2020.

<table class="table table-striped"><tbody>
<tr>
<td>S-REIT Sector: REITS, Stapled Trusts and Business Trusts </td>
			<td>SGX Code</td>
			<td>Market Cap S$M</td>
			<td>Net Institutional Flow 10 June - 28 Aug / Mkt Cap</td>
			<td>Total Return 9 June - 28 August </td>
			<td>Total Return YTD</td>
		</tr>
<tr>
<td>Sabana REIT</td>
			<td>M1GU</td>
			<td>389.6</td>
			<td>1.00%</td>
			<td>-1%</td>
			<td>-17%</td>
		</tr>
<tr>
<td>Frasers L&amp;C Tr</td>
			<td>BUOU</td>
			<td>4607.8</td>
			<td>0.60%</td>
			<td>14%</td>
			<td>13%</td>
		</tr>
<tr>
<td>A-REIT</td>
			<td>A17U</td>
			<td>11983</td>
			<td>0.50%</td>
			<td>3%</td>
			<td>15%</td>
		</tr>
<tr>
<td>Mapletree Log Tr</td>
			<td>M44U</td>
			<td>7850.6</td>
			<td>0.40%</td>
			<td>8%</td>
			<td>22%</td>
		</tr>
<tr>
<td>SPH REIT</td>
			<td>SK6U</td>
			<td>2362.5</td>
			<td>0.40%</td>
			<td>-4%</td>
			<td>-19%</td>
		</tr>
<tr>
<td>Keppel Pac Oak REIT</td>
			<td>CMOU</td>
			<td>920.7</td>
			<td>0.40%</td>
			<td>4%</td>
			<td>-1%</td>
		</tr>
<tr>
<td>ARA LOGOS Log Tr</td>
			<td>K2LU</td>
			<td>691.6</td>
			<td>0.30%</td>
			<td>14%</td>
			<td>-6%</td>
		</tr>
<tr>
<td>Keppel DC REIT</td>
			<td>AJBU</td>
			<td>4719.4</td>
			<td>0.20%</td>
			<td>22%</td>
			<td>42%</td>
		</tr>
<tr>
<td>CapitaCom Trust</td>
			<td>C61U</td>
			<td>6333.5</td>
			<td>0.10%</td>
			<td>-10%</td>
			<td>-14%</td>
		</tr>
<tr>
<td>ParkwayLife REIT</td>
			<td>C2PU</td>
			<td>2268.8</td>
			<td>0.10%</td>
			<td>8%</td>
			<td>16%</td>
		</tr>
<tr>
<td>CDL H Trust</td>
			<td>J85</td>
			<td>1281</td>
			<td>0.10%</td>
			<td>-11%</td>
			<td>-32%</td>
		</tr>
<tr>
<td>Mapletree Ind Tr</td>
			<td>ME8U</td>
			<td>7138.6</td>
			<td>0.00%</td>
			<td>9%</td>
			<td>21%</td>
		</tr>
<tr>
<td>Ascott Trust</td>
			<td>HMN</td>
			<td>2747.3</td>
			<td>0.00%</td>
			<td>-19%</td>
			<td>-30%</td>
		</tr>
<tr>
<td>Far East H Trust</td>
			<td>Q5T</td>
			<td>1057.5</td>
			<td>0.00%</td>
			<td>-1%</td>
			<td>-24%</td>
		</tr>
<tr>
<td>Frasers H Trust</td>
			<td>ACV</td>
			<td>835.7</td>
			<td>0.00%</td>
			<td>-18%</td>
			<td>-38%</td>
		</tr>
<tr>
<td>Dasin Retail Tr**</td>
			<td>CEDU</td>
			<td>616.7</td>
			<td>0.00%</td>
			<td>-2%</td>
			<td>1%</td>
		</tr>
<tr>
<td>BHG Retail REIT</td>
			<td>BMGU</td>
			<td>295.5</td>
			<td>0.00%</td>
			<td>-9%</td>
			<td>-13%</td>
		</tr>
<tr>
<td>Mapletree NAC Tr</td>
			<td>RW0U</td>
			<td>3064.8</td>
			<td>-0.10%</td>
			<td>-4%</td>
			<td>-16%</td>
		</tr>
<tr>
<td>IREIT Global</td>
			<td>UD1U</td>
			<td>446.1</td>
			<td>-0.10%</td>
			<td>-3%</td>
			<td>-8%</td>
		</tr>
<tr>
<td>OUE Com REIT</td>
			<td>TS0U</td>
			<td>2030.5</td>
			<td>-0.20%</td>
			<td>-7%</td>
			<td>-30%</td>
		</tr>
<tr>
<td>EC World REIT</td>
			<td>BWCU</td>
			<td>550.7</td>
			<td>-0.20%</td>
			<td>-3%</td>
			<td>-4%</td>
		</tr>
<tr>
<td>Elite Com REIT GBP</td>
			<td>MXNU</td>
			<td>399</td>
			<td>-0.20%</td>
			<td>-1%</td>
			<td>N/A</td>
		</tr>
<tr>
<td>Mapletree Com Tr</td>
			<td>N2IU</td>
			<td>6395.9</td>
			<td>-0.30%</td>
			<td>-10%</td>
			<td>-18%</td>
		</tr>
<tr>
<td>Frasers Cpt Tr</td>
			<td>J69U</td>
			<td>2769.3</td>
			<td>-0.30%</td>
			<td>-5%</td>
			<td>-11%</td>
		</tr>
<tr>
<td>Soilbuild Biz REIT</td>
			<td>SV3U</td>
			<td>519.9</td>
			<td>-0.40%</td>
			<td>-1%</td>
			<td>-16%</td>
		</tr>
<tr>
<td>Keppel REIT</td>
			<td>K71U</td>
			<td>3568.9</td>
			<td>-0.50%</td>
			<td>-11%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Cromwell REIT EUR</td>
			<td>CNNU</td>
			<td>1819.5</td>
			<td>-0.50%</td>
			<td>3%</td>
			<td>-6%</td>
		</tr>
<tr>
<td>ESR-REIT</td>
			<td>J91U</td>
			<td>1361.5</td>
			<td>-0.50%</td>
			<td>-8%</td>
			<td>-24%</td>
		</tr>
<tr>
<td>Lendlease REIT</td>
			<td>JYEU</td>
			<td>749.9</td>
			<td>-0.50%</td>
			<td>-8%</td>
			<td>-28%</td>
		</tr>
<tr>
<td>Prime US REIT USD</td>
			<td>OXMU</td>
			<td>1119.3</td>
			<td>-0.60%</td>
			<td>-5%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Sasseur REIT</td>
			<td>CRPU</td>
			<td>919.1</td>
			<td>-0.60%</td>
			<td>-1%</td>
			<td>-8%</td>
		</tr>
<tr>
<td>Utd Hampshire REIT USD</td>
			<td>ODBU</td>
			<td>365.3</td>
			<td>-0.70%</td>
			<td>-8%</td>
			<td>N/A</td>
		</tr>
<tr>
<td>Lippo Malls Tr</td>
			<td>D5IU</td>
			<td>345.4</td>
			<td>-0.70%</td>
			<td>-22%</td>
			<td>-45%</td>
		</tr>
<tr>
<td>ARA H Trust USD</td>
			<td>XZL</td>
			<td>273.7</td>
			<td>-0.70%</td>
			<td>-24%</td>
			<td>-57%</td>
		</tr>
<tr>
<td>CapitaMall Trust</td>
			<td>C38U</td>
			<td>7011.3</td>
			<td>-0.80%</td>
			<td>-14%</td>
			<td>-21%</td>
		</tr>
<tr>
<td>First REIT</td>
			<td>AW9U</td>
			<td>430.4</td>
			<td>-0.80%</td>
			<td>-23%</td>
			<td>-43%</td>
		</tr>
<tr>
<td>Ascendas-iTrust**</td>
			<td>CY6U</td>
			<td>1514.7</td>
			<td>-0.90%</td>
			<td>-10%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Manulife REIT USD</td>
			<td>BTOU</td>
			<td>1588.6</td>
			<td>-1.00%</td>
			<td>-9%</td>
			<td>-21%</td>
		</tr>
<tr>
<td>Suntec REIT</td>
			<td>T82U</td>
			<td>3920.9</td>
			<td>-1.30%</td>
			<td>-11%</td>
			<td>-22%</td>
		</tr>
<tr>
<td>Starhill Global REIT</td>
			<td>P40U</td>
			<td>954.8</td>
			<td>-1.30%</td>
			<td>-24%</td>
			<td>-38%</td>
		</tr>
<tr>
<td>AIMS APAC REIT</td>
			<td>O5RU</td>
			<td>833.9</td>
			<td>-1.70%</td>
			<td>-4%</td>
			<td>-13%</td>
		</tr>
<tr>
<td>CapitaR China Tr</td>
			<td>AU8U</td>
			<td>1406.3</td>
			<td>-3.00%</td>
			<td>-14%</td>
			<td>-25%</td>
		</tr>
<tr>
<td>Average</td>
			<td> </td>
			<td> </td>
			<td> </td>
			<td>-5%</td>
			<td>-14%</td>
		</tr>
</tbody></table>
 ** note Business Trust. Source: SGX, Bloomberg, Refinitiv (Data as of 28 August 2020). Note table sort by highest net institutional buys to highest net institutional sells proportionate to current market capitalisation.

 

By comparison, the 10 trusts of the S-REIT sector that saw the highest net institutional inflow proportionate to market capitalisation following the major market lows of 23 March through to the post-low high of 9 June included First REIT, Ascendas REIT, Frasers Logistics &amp; Commercial Trust, Mapletree Logistics Trust, Soilbuild Business Space REIT, Keppel REIT, EC World REIT, Keppel Pacific Oak REIT, Ascott Trust and SPH REIT. During that period, the 10 trusts averaged a 54% Total Return compared to the remaining trusts of the S-REIT Sector gaining 45%.
</body></html>





For the past 12 weeks, the 10 S-REITs recipient to the Sector’s highest net institutional inflows (proportionate to market capitalisation) included seven of the S-REIT Sector’s best performers over the period, including Keppel DC REIT which has been amongst the 25 strongest performing global REITs in the 2020 YTD.  
	 
	
These 10 S-REITs averaged a 6% total return from 9 June through to 28 August, whilst the remaining S-REITs averaged a 9% decline. The iEdge S-REIT Leaders Index generated a 3% decline over the 12 weeks, in-line with the global REIT market.   
	 
	
Sabana REIT saw the S-REITs’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 Aug, the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.


 

Globally there are more than 800 stocks that make up the REIT Sector, with a combined market capitalisation of US$1.8 trillion (S$2.4 trillion). The FTSE EPRA/NAREIT Global REIT Index represents approximately two-thirds of the S$1.8 trillion combined market capitalisation and has generated a declined a 17% decline in the 2020 year to 28 August. Like most equity benchmarks, the Index formed its post-23 March high on 9 June which coincided with the beginnings of the second wave of COVID-19 across the United States.  Similarly, the iEdge S-REIT Leaders Index formed its post-23 March high on 9 June, and has since declined 3%. Over the 12 week period the S-REIT sector was recipient to S$147 million in net institutional outflows. A total of 13 trusts of the S-REIT Sector saw net institutional inflows over the 12 weeks. The 10 trusts with the highest net institutional inflows between 10 June to 28 June, proportionate to current market capitalisation included seven of the best performing REITs over the period. Together the 10 trusts generated an average gain of 6% over the 12 weeks, whilst the remaining REITs averaged a 9% decline.  
Sabana REIT saw the S-REIT Sectors’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 August (click here), the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.  
The table below sorts the S-REIT Sector to the highest net institutional inflows between proportionate to current market capitalisation between 10 June and 28 August 2020.



S-REIT Sector: REITS, Stapled Trusts and Business Trusts 
			SGX Code
			Market Cap S$M
			Net Institutional Flow 10 June - 28 Aug / Mkt Cap
			Total Return 9 June - 28 August 
			Total Return YTD
		

Sabana REIT
			M1GU
			389.6
			1.00%
			-1%
			-17%
		

Frasers L&amp;C Tr
			BUOU
			4607.8
			0.60%
			14%
			13%
		

A-REIT
			A17U
			11983
			0.50%
			3%
			15%
		

Mapletree Log Tr
			M44U
			7850.6
			0.40%
			8%
			22%
		

SPH REIT
			SK6U
			2362.5
			0.40%
			-4%
			-19%
		

Keppel Pac Oak REIT
			CMOU
			920.7
			0.40%
			4%
			-1%
		

ARA LOGOS Log Tr
			K2LU
			691.6
			0.30%
			14%
			-6%
		

Keppel DC REIT
			AJBU
			4719.4
			0.20%
			22%
			42%
		

CapitaCom Trust
			C61U
			6333.5
			0.10%
			-10%
			-14%
		

ParkwayLife REIT
			C2PU
			2268.8
			0.10%
			8%
			16%
		

CDL H Trust
			J85
			1281
			0.10%
			-11%
			-32%
		

Mapletree Ind Tr
			ME8U
			7138.6
			0.00%
			9%
			21%
		

Ascott Trust
			HMN
			2747.3
			0.00%
			-19%
			-30%
		

Far East H Trust
			Q5T
			1057.5
			0.00%
			-1%
			-24%
		

Frasers H Trust
			ACV
			835.7
			0.00%
			-18%
			-38%
		

Dasin Retail Tr**
			CEDU
			616.7
			0.00%
			-2%
			1%
		

BHG Retail REIT
			BMGU
			295.5
			0.00%
			-9%
			-13%
		

Mapletree NAC Tr
			RW0U
			3064.8
			-0.10%
			-4%
			-16%
		

IREIT Global
			UD1U
			446.1
			-0.10%
			-3%
			-8%
		

OUE Com REIT
			TS0U
			2030.5
			-0.20%
			-7%
			-30%
		

EC World REIT
			BWCU
			550.7
			-0.20%
			-3%
			-4%
		

Elite Com REIT GBP
			MXNU
			399
			-0.20%
			-1%
			N/A
		

Mapletree Com Tr
			N2IU
			6395.9
			-0.30%
			-10%
			-18%
		

Frasers Cpt Tr
			J69U
			2769.3
			-0.30%
			-5%
			-11%
		

Soilbuild Biz REIT
			SV3U
			519.9
			-0.40%
			-1%
			-16%
		

Keppel REIT
			K71U
			3568.9
			-0.50%
			-11%
			-12%
		

Cromwell REIT EUR
			CNNU
			1819.5
			-0.50%
			3%
			-6%
		

ESR-REIT
			J91U
			1361.5
			-0.50%
			-8%
			-24%
		

Lendlease REIT
			JYEU
			749.9
			-0.50%
			-8%
			-28%
		

Prime US REIT USD
			OXMU
			1119.3
			-0.60%
			-5%
			-12%
		

Sasseur REIT
			CRPU
			919.1
			-0.60%
			-1%
			-8%
		

Utd Hampshire REIT USD
			ODBU
			365.3
			-0.70%
			-8%
			N/A
		

Lippo Malls Tr
			D5IU
			345.4
			-0.70%
			-22%
			-45%
		

ARA H Trust USD
			XZL
			273.7
			-0.70%
			-24%
			-57%
		

CapitaMall Trust
			C38U
			7011.3
			-0.80%
			-14%
			-21%
		

First REIT
			AW9U
			430.4
			-0.80%
			-23%
			-43%
		

Ascendas-iTrust**
			CY6U
			1514.7
			-0.90%
			-10%
			-12%
		

Manulife REIT USD
			BTOU
			1588.6
			-1.00%
			-9%
			-21%
		

Suntec REIT
			T82U
			3920.9
			-1.30%
			-11%
			-22%
		

Starhill Global REIT
			P40U
			954.8
			-1.30%
			-24%
			-38%
		

AIMS APAC REIT
			O5RU
			833.9
			-1.70%
			-4%
			-13%
		

CapitaR China Tr
			AU8U
			1406.3
			-3.00%
			-14%
			-25%
		

Average
			 
			 
			 
			-5%
			-14%
		

 ** note Business Trust. Source: SGX, Bloomberg, Refinitiv (Data as of 28 August 2020). Note table sort by highest net institutional buys to highest net institutional sells proportionate to current market capitalisation.

 

By comparison, the 10 trusts of the S-REIT sector that saw the highest net institutional inflow proportionate to market capitalisation following the major market lows of 23 March through to the post-low high of 9 June included First REIT, Ascendas REIT, Frasers Logistics &amp; Commercial Trust, Mapletree Logistics Trust, Soilbuild Business Space REIT, Keppel REIT, EC World REIT, Keppel Pacific Oak REIT, Ascott Trust and SPH REIT. During that period, the 10 trusts averaged a 54% Total Return compared to the remaining trusts of the S-REIT Sector gaining 45%.



S-REITs Most Sought by Institutions Since 9 June

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As far back as he can remember, the twin touchstones of Paul Tham’s life have been wisdom and learning. 
Growing up, a familiar mantra was one expounded by the Book of Proverbs in the Bible – “Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding”. 
“My godfather taught me the importance of wisdom and understanding,” the CEO of the manager of SGX-listed Keppel REIT recalled. “Both are tied to two key skills – the willingness to learn, as well as the ability to learn continuously – and involve lots of hard work.” 
Driven by a passion to build and create, Tham began his career as a structural engineer in New York, after graduating with a Bachelor of Science degree in Civil &amp; Environmental Engineering from Cornell University. From for-profit buildings, he moved to non-profit work, which included the construction of school and church buildings. 
“I was picking up different skills every day,” recalled Tham, who also holds a Masters in Business Administration from Singapore Management University. 
“In one of the volunteer projects to build a school in upstate New York, we ended up doing most of the construction work ourselves – driving forklifts and operating small excavators. That was one of the most satisfying projects I was involved in.” 
His next stop – Bain &amp; Company. In his role as management consultant, Tham worked with multinational companies in Asia Pacific on a wide range of functions, including financial performance management and growth strategies. There, he experienced a steep learning curve. 
“Management consulting teaches you to learn continuously. You’re working on new projects, reading research reports, and asking questions all the time. You have to work hard to pick up knowledge on new industries and markets constantly,” he added. 
“And the fastest way to learn is to tap on the expertise and experience of others. The advantage is immediate – you gain wisdom from someone else’s experience and learning, which you can then apply to your own life and work.” 
In 2014, Tham joined Keppel Corporation’s Group Strategy &amp; Development unit, where he played a key role in the formation of Keppel Capital, eventually becoming Keppel Capital’s Chief Financial Officer. The 38-year-old was appointed Deputy Chief Executive Officer of the manager of Keppel REIT in 2018, and assumed his current appointment as CEO a year later. Portfolio Optimisation 
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts across the region. It has the objective of generating stable income and long-term growth for unitholders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and pan-Asia. 
The REIT has assets under management of approximately S$8 billion in Singapore, the key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul in South Korea. 
Keppel REIT is sponsored by Keppel Land Ltd, and managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital – Asia’s premier asset manager with a diversified, global portfolio in real estate, infrastructure and data centre properties. 
During his two years in Keppel REIT, Tham has implemented key strategies to put the REIT on a steady growth trajectory. 
The first is portfolio optimisation, which allows the REIT to achieve long-term sustainable returns for its unitholders. This includes capturing value through the divestment of lower yielding assets, which in turn increases the manager’s financial flexibility to fund growth through reinvestments, continue its unit buyback programme, distribute capital gains, or pare down debt. 
“Portfolio optimisation for us is really to improve income resilience and portfolio yield. Over the last two years, we’ve divested about S$1.1 billion worth of assets,” Tham said, pointing to the paring of a 20% stake in Ocean Financial Centre in December 2018, the purchase of Seoul’s T Tower in May 2019 – marking the REIT’s first foray into South Korea – and the sale of Bugis Junction Towers last November. 
“The focus is to enhance DPU, and if you look at our recent results, it seems to be working, with Keppel REIT seeing the first year-on-year increase in DPU in 2019 after five years of decline,” he noted, referring to distributions per unit, a metric closely watched by unitholders. 
For the year ended 31 December 2019, Keppel REIT’s DPU edged higher to 5.58 Singapore cents from 5.56 cents the previous year. Between 2013 and 2018, its DPU had registered year-on-year declines. 
The second prong of Tham’s strategy involves boosting the REIT’s capital efficiency by managing both debt and equity. In mid-2018, Keppel REIT became the first REIT in Singapore to run a DPU-accretive, unit buyback program. As at end-2019, the REIT had purchased and cancelled 95.3 million units. 
“We’ve seen the benefits in our first-half 2020 financial results, where distributable income was largely similar, but DPU rose due to a smaller unit base.” 
The REIT has also reduced its overall cost of debt. “We’ve restructured some of our loans, launched convertible bonds, all in an effort to push down borrowing cost,” he added. 
As at 30 June 2020, all the REIT’s 2020 loans have been refinanced. All-in interest rate was also lower at 2.48% per annum versus 2.86% for the same period last year, while aggregate leverage was 36.3%, with a weighted average term to maturity of 3.6 years. Interest cover stood at 3.5 times, with 79% of its borrowings pegged to fixed rates. Resilient and Stable 
Looking ahead, Keppel REIT will remain a Singapore-centric REIT, Tham said. About 80% of its assets under management (AUM) is in Singapore’s prime Central Business District (CBD). 
“There will be a shift over time as we raise our overseas exposure, such as in Australia and South Korea, but it will be marginal, for example, lifting it to 25%, or even 30%, from 20%.” 
And an overseas footprint has boosted resilience. “Investing in assets across Australia and South Korea enhances our ability to deliver sustainable returns over time through changing property cycles in these different markets,” he said. 
Australian leases, which tend to stretch five to 10 years versus Singapore’s three to five years, also provide added support. “These longer leases with annual rental escalations offer more stability, and increase the REIT’s ability to grow DPU, even if one market is experiencing a downcycle,” he added. 
Meanwhile, the coronavirus outbreak has created headwinds and offered meaningful lessons, Tham noted. 
“COVID-19 has been challenging for retail and hospitality assets, but for an office landlord like us with a small retail component, there’s been minimal impact,” he said. “Nonetheless, there’s a fair amount of uncertainty due to the global recession and rising geopolitical tensions, so our main focus is proactive engagement with our tenants.” 
At one end of the spectrum, technology-related tenants are still expanding, with their growth fuelled by digitalisation trends that accelerated in the wake of the pandemic. At the other end, hospitality and travel-related businesses are struggling. 
“From a leasing standpoint, we try to accommodate their requirements as much as possible – making sure additional space is available for those who need it, and being flexible on lease negotiations with others to retain tenants in our buildings.” 
As at 30 June 2020, Keppel REIT’s tenant support measures stood at an estimated S$12.5 million. These include the full pass-through of property tax rebates and cash grants from the Singapore government. It has also allowed S$1.6 million of rents to be deferred. 
Its portfolio performance remains bolstered by a high committed occupancy rate of 98.6%, as well as long weighted average lease expiry of about 4.6 years and 6.5 years for the overall portfolio and top 10 tenants respectively. For the first six months of 2020, the REIT had a tenant retention rate of 71%. Focus on Future-Proofing 
Looking ahead, future-proofing the REIT’s commercial spaces is key, Tham said. 
“We need to ensure our buildings have the best-in-class infrastructure, such as improving indoor air quality with advanced filtration systems, boosting standards of cleanliness, and using technology to reduce manpower requirements and human interactions,” he added. 
This can be seen from its robot – RoboGuard – that patrols the premises of Ocean Financial Centre to enforce safe-distancing measures. 
“We’re also harnessing technology and automation for other key areas, such as lifts, turnstiles and toilets, and exploring the use of contactless doors within our buildings.” 
Longer term, how tenants use their office space will also evolve, and Keppel REIT needs to stay ahead of such emerging trends, Tham said. 
“Physical offices will remain a necessity, although the form and functions of the office will evolve. Many firms will likely incorporate work-from-home protocols in their future planning. And employees and tenants will want more flexibility from their office space going forward,” he added. 
“Some companies may need less space, but many functions will still require space for social interaction, client engagements and collaborations, especially if you’re a customer-facing business or in the creative industry.” 
There may also be a reversal of densification. “Space for each employee may be increased to incorporate social distancing within an office layout, reversing the trend of higher density over the last two decades,” he added. 
The resulting impact on office demand, therefore, will likely be a measured one, as tenants re-assess their needs along with the terms of their existing leases, which are typically three to five years long. 
“It will become more important to have the ‘right’ office space. If companies reduce their footprint, they will be able to pay more for Grade A premium space, and demand top-notch infrastructure – buildings that are well-networked, well-located, with high hygiene standards,” Tham pointed out. 
In tandem with these considerations, the repositioning of assets has emerged, and will continue to gain momentum. “At the end of the day, owning the right assets will be instrumental to landlords surviving, and thriving,” he added. 
There’s also the potential for supply deferment, as ongoing new projects may be delayed by social distancing restrictions at construction sites. “If demand for commercial buildings moves down slightly, but at the same time, supply moves down as well, net-net, the sector could remain relatively stable over time.” 
Despite the evolving industry, Tham sleeps like a log. “Having three young kids at home means I can fall asleep in a heartbeat – nothing keeps me awake!” laughed the father of two boys and a girl, aged 10 months to nine years. 
“But seriously, to be able to stay worry-free, all the credit goes to my team – they’re doing a really great job,” he said. “Over the years, I have learnt more from them than they from me.” Keppel REIT 
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts pan‐Asia. Keppel REIT’s objective is to generate stable income and long‐term growth for unitholders by owning and investing in a portfolio of quality income‐producing commercial real estate and real estate‐related assets in Singapore and pan‐Asia. The REIT has assets under management of approximately S$8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea. Keppel REIT is sponsored by Keppel Land Ltd, one of Asia's leading property companies. It is managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital Holdings Pte Ltd. Keppel Capital is a premier asset manager in Asia with a diversified portfolio in real estate, infrastructure and data centre properties in key global markets.

 
The company website is: <a href="www.keppelreit.com">www.keppelreit.com</a>. 
Click <a href="https://www.sgx.com/securities/equities/K71U">here</a> for the company's StockFacts page. 
For the six months ended 30 June 2020 financial results, click <a href="https://links.sgx.com/FileOpen/Keppel%20REIT%202Q20%20Financial%20Results.ashx?App=Announcement&amp;FileID=624206">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="///C:/Users/tanje/Desktop/Working%20Files/kopi-C/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    KeppelREIT-CEO


As far back as he can remember, the twin touchstones of Paul Tham’s life have been wisdom and learning.  
Growing up, a familiar mantra was one expounded by the Book of Proverbs in the Bible – “Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding”.  
“My godfather taught me the importance of wisdom and understanding,” the CEO of the manager of SGX-listed Keppel REIT recalled. “Both are tied to two key skills – the willingness to learn, as well as the ability to learn continuously – and involve lots of hard work.”  
Driven by a passion to build and create, Tham began his career as a structural engineer in New York, after graduating with a Bachelor of Science degree in Civil &amp; Environmental Engineering from Cornell University. From for-profit buildings, he moved to non-profit work, which included the construction of school and church buildings.  
“I was picking up different skills every day,” recalled Tham, who also holds a Masters in Business Administration from Singapore Management University.  
“In one of the volunteer projects to build a school in upstate New York, we ended up doing most of the construction work ourselves – driving forklifts and operating small excavators. That was one of the most satisfying projects I was involved in.”  
His next stop – Bain &amp; Company. In his role as management consultant, Tham worked with multinational companies in Asia Pacific on a wide range of functions, including financial performance management and growth strategies. There, he experienced a steep learning curve.  
“Management consulting teaches you to learn continuously. You’re working on new projects, reading research reports, and asking questions all the time. You have to work hard to pick up knowledge on new industries and markets constantly,” he added.  
“And the fastest way to learn is to tap on the expertise and experience of others. The advantage is immediate – you gain wisdom from someone else’s experience and learning, which you can then apply to your own life and work.”  
In 2014, Tham joined Keppel Corporation’s Group Strategy &amp; Development unit, where he played a key role in the formation of Keppel Capital, eventually becoming Keppel Capital’s Chief Financial Officer. The 38-year-old was appointed Deputy Chief Executive Officer of the manager of Keppel REIT in 2018, and assumed his current appointment as CEO a year later.  Portfolio Optimisation  
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts across the region. It has the objective of generating stable income and long-term growth for unitholders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and pan-Asia.  
The REIT has assets under management of approximately S$8 billion in Singapore, the key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul in South Korea.  
Keppel REIT is sponsored by Keppel Land Ltd, and managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital – Asia’s premier asset manager with a diversified, global portfolio in real estate, infrastructure and data centre properties.  
During his two years in Keppel REIT, Tham has implemented key strategies to put the REIT on a steady growth trajectory.  
The first is portfolio optimisation, which allows the REIT to achieve long-term sustainable returns for its unitholders. This includes capturing value through the divestment of lower yielding assets, which in turn increases the manager’s financial flexibility to fund growth through reinvestments, continue its unit buyback programme, distribute capital gains, or pare down debt.  
“Portfolio optimisation for us is really to improve income resilience and portfolio yield. Over the last two years, we’ve divested about S$1.1 billion worth of assets,” Tham said, pointing to the paring of a 20% stake in Ocean Financial Centre in December 2018, the purchase of Seoul’s T Tower in May 2019 – marking the REIT’s first foray into South Korea – and the sale of Bugis Junction Towers last November.  
“The focus is to enhance DPU, and if you look at our recent results, it seems to be working, with Keppel REIT seeing the first year-on-year increase in DPU in 2019 after five years of decline,” he noted, referring to distributions per unit, a metric closely watched by unitholders.  
For the year ended 31 December 2019, Keppel REIT’s DPU edged higher to 5.58 Singapore cents from 5.56 cents the previous year. Between 2013 and 2018, its DPU had registered year-on-year declines.  
The second prong of Tham’s strategy involves boosting the REIT’s capital efficiency by managing both debt and equity. In mid-2018, Keppel REIT became the first REIT in Singapore to run a DPU-accretive, unit buyback program. As at end-2019, the REIT had purchased and cancelled 95.3 million units.  
“We’ve seen the benefits in our first-half 2020 financial results, where distributable income was largely similar, but DPU rose due to a smaller unit base.”  
The REIT has also reduced its overall cost of debt. “We’ve restructured some of our loans, launched convertible bonds, all in an effort to push down borrowing cost,” he added.  
As at 30 June 2020, all the REIT’s 2020 loans have been refinanced. All-in interest rate was also lower at 2.48% per annum versus 2.86% for the same period last year, while aggregate leverage was 36.3%, with a weighted average term to maturity of 3.6 years. Interest cover stood at 3.5 times, with 79% of its borrowings pegged to fixed rates.  Resilient and Stable  
Looking ahead, Keppel REIT will remain a Singapore-centric REIT, Tham said. About 80% of its assets under management (AUM) is in Singapore’s prime Central Business District (CBD).  
“There will be a shift over time as we raise our overseas exposure, such as in Australia and South Korea, but it will be marginal, for example, lifting it to 25%, or even 30%, from 20%.”  
And an overseas footprint has boosted resilience. “Investing in assets across Australia and South Korea enhances our ability to deliver sustainable returns over time through changing property cycles in these different markets,” he said.  
Australian leases, which tend to stretch five to 10 years versus Singapore’s three to five years, also provide added support. “These longer leases with annual rental escalations offer more stability, and increase the REIT’s ability to grow DPU, even if one market is experiencing a downcycle,” he added.  
Meanwhile, the coronavirus outbreak has created headwinds and offered meaningful lessons, Tham noted.  
“COVID-19 has been challenging for retail and hospitality assets, but for an office landlord like us with a small retail component, there’s been minimal impact,” he said. “Nonetheless, there’s a fair amount of uncertainty due to the global recession and rising geopolitical tensions, so our main focus is proactive engagement with our tenants.”  
At one end of the spectrum, technology-related tenants are still expanding, with their growth fuelled by digitalisation trends that accelerated in the wake of the pandemic. At the other end, hospitality and travel-related businesses are struggling.  
“From a leasing standpoint, we try to accommodate their requirements as much as possible – making sure additional space is available for those who need it, and being flexible on lease negotiations with others to retain tenants in our buildings.”  
As at 30 June 2020, Keppel REIT’s tenant support measures stood at an estimated S$12.5 million. These include the full pass-through of property tax rebates and cash grants from the Singapore government. It has also allowed S$1.6 million of rents to be deferred.  
Its portfolio performance remains bolstered by a high committed occupancy rate of 98.6%, as well as long weighted average lease expiry of about 4.6 years and 6.5 years for the overall portfolio and top 10 tenants respectively. For the first six months of 2020, the REIT had a tenant retention rate of 71%.  Focus on Future-Proofing   
Looking ahead, future-proofing the REIT’s commercial spaces is key, Tham said.  
“We need to ensure our buildings have the best-in-class infrastructure, such as improving indoor air quality with advanced filtration systems, boosting standards of cleanliness, and using technology to reduce manpower requirements and human interactions,” he added.  
This can be seen from its robot – RoboGuard – that patrols the premises of Ocean Financial Centre to enforce safe-distancing measures.  
“We’re also harnessing technology and automation for other key areas, such as lifts, turnstiles and toilets, and exploring the use of contactless doors within our buildings.”  
Longer term, how tenants use their office space will also evolve, and Keppel REIT needs to stay ahead of such emerging trends, Tham said.  
“Physical offices will remain a necessity, although the form and functions of the office will evolve. Many firms will likely incorporate work-from-home protocols in their future planning. And employees and tenants will want more flexibility from their office space going forward,” he added.  
“Some companies may need less space, but many functions will still require space for social interaction, client engagements and collaborations, especially if you’re a customer-facing business or in the creative industry.”  
There may also be a reversal of densification. “Space for each employee may be increased to incorporate social distancing within an office layout, reversing the trend of higher density over the last two decades,” he added.  
The resulting impact on office demand, therefore, will likely be a measured one, as tenants re-assess their needs along with the terms of their existing leases, which are typically three to five years long.  
“It will become more important to have the ‘right’ office space. If companies reduce their footprint, they will be able to pay more for Grade A premium space, and demand top-notch infrastructure – buildings that are well-networked, well-located, with high hygiene standards,” Tham pointed out.  
In tandem with these considerations, the repositioning of assets has emerged, and will continue to gain momentum. “At the end of the day, owning the right assets will be instrumental to landlords surviving, and thriving,” he added.  
There’s also the potential for supply deferment, as ongoing new projects may be delayed by social distancing restrictions at construction sites. “If demand for commercial buildings moves down slightly, but at the same time, supply moves down as well, net-net, the sector could remain relatively stable over time.”  
Despite the evolving industry, Tham sleeps like a log. “Having three young kids at home means I can fall asleep in a heartbeat – nothing keeps me awake!” laughed the father of two boys and a girl, aged 10 months to nine years.  
“But seriously, to be able to stay worry-free, all the credit goes to my team – they’re doing a really great job,” he said. “Over the years, I have learnt more from them than they from me.”   Keppel REIT  
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts pan‐Asia. Keppel REIT’s objective is to generate stable income and long‐term growth for unitholders by owning and investing in a portfolio of quality income‐producing commercial real estate and real estate‐related assets in Singapore and pan‐Asia. The REIT has assets under management of approximately S$8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea. Keppel REIT is sponsored by Keppel Land Ltd, one of Asia's leading property companies. It is managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital Holdings Pte Ltd. Keppel Capital is a premier asset manager in Asia with a diversified portfolio in real estate, infrastructure and data centre properties in key global markets.

 
The company website is: www.keppelreit.com.  
Click here for the company's StockFacts page.  
For the six months ended 30 June 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



Singapore

Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

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