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.





Real Estate, Manufacturing and Food &amp; Beverage stocks made up close to half of Singapore’s top 200 stocks by turnover in the first 5 months of 2019. The stocks representing tech–laden Manufacturing were the best performers in 2019 YTD and preceding two years, with F&amp;B the best performer in 2016. 
	 
	
Distinct drivers of the three sectors included interest rate outlooks and property prices for Real Estate, technological advancements, value chain integration and global trade for Manufacturing while incomes, tastes, preferences and tourism drove Food &amp; Beverage sales.  
	 
	
Real estate stocks showed the most consistency in returns, with the least standard deviation amongst the individual stock performances, followed by food &amp; beverage stocks, with the individual manufacturing stocks showing the most performance deviation in past years.  
	 
	Returns amongst the relevant 23 manufacturing stocks have been more constant in the 2019 YTD, with the 18% average total return generated by  19 gainers and four decliners, and a median total return of 19%. Hi-P Int, Frencken &amp; Sunpower led the manufacturers over the 23 weeks. 

As 2019 rapidly approaches the halftime mark of 30 June, clear drivers of investor sentiment in the year thus far have included concerns of global growth deceleration at home and abroad, resumption of trade frictions amongst the world’s two largest economies in early May, and a more dovish outlook for US interest rates.

In Singapore, the Straits Times index (“STI”) has generated  a total return of 6.8% in the 2019 year-to-date, in-line with the FTSE ASEAN All Share Index which has gained 7.4%. 

Looking beyond the STI, the 200 most actively traded stocks have generated an average total return of 8.0%. This does not include the average total returns of RHT Health Trust, Memtech International and Indofood Agri Resources which averaged 89.2% gains on premium cash offers for these businesses.

60 Real Estate Stocks Amongst Top 200 Stocks by Turnover 

Singapore’s strong property and infrastructure fundamentals have provided beachheads for Singapore’s listed Real Estate Sector. For the first five months of 2019, the 60 Real Estate stocks amongst the 200 most active traded stocks by turnover accounted for the most day-to-day market turnover, which was followed by Financial Services. As discussed recently (click here) this year Singapore REITs have attracted investment flows from global funds which has included private equity funds.

The 23 manufacturing stocks that were amongst the 200 stocks by turnover accounted for the most day-to-day turnover after the 11 financial services stocks. After Real Estate’s 60 stocks, the 23 manufacturing stocks led by the likes of Yangzijiang Shipbuilding, Venture Corporation and Singapore Tech Engineering, contributed the next most number of stocks in the top 200 by turnover. Note these manufacturing stocks do not include Food Manufacturers or Processors, and span diverse business from advanced electronics to healthcare products.

With Food and Beverage (“F&amp;B”) contributing 14 stocks to the top 200 by turnover, and the next highest number of stocks after Manufacturing, the three sectors of Real Estate, Manufacturing and F&amp;B together made up 97 stocks. This was close to half the top 200 stocks by turnover. The average total returns of the three genres of stocks over recent years are illustrated in the chart below. 

      
    
    Total Returns of Three Genres
The average total returns illustrated above were built on various levels of consistency across the performances of each of the Sector’s stocks. For instance, the 60 real estate stocks showed the most consistency, with the least standard deviation amongst the individual stock performances in all four time periods.

This was followed by F&amp;B, which saw more consistency in the performances across its relevant 14 stocks than Manufacturing over the past three years ending 2018. As noted above, Singapore manufacturing stocks span a wide range of industries, with the diversification exponentiated by the geographical reach of these businesses. This was a contributing factor to the individual manufacturing stocks showing the most performance deviation over the preceding three years.  However, in the 2019 year to date, performances across manufacturing stocks have seen marginally less deviation than the F&amp;B stocks. 

The comparative performances of the relevant stocks are tabled below, with each table sorted by stocks with the most turnover over the first five months of 2019.  The 60 real estate stocks maintain a combined market capitalisation of S$175 billion, the 23 manufacturing stocks maintain a total market capitalisation of S$35 billion and the 14 F&amp;B stocks maintain a total market capitalisation of S$60 billion. Note the designated F&amp;B stocks do not include Palm Oil producers.




			Real Estate
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			ASCENDAS REAL ESTATE INV TRT
			
			
			A17U
			
			
			4.6
			
			
			27.4
			
			
			0.3
			
			
			18.7
			
		


			CAPITALAND
			
			
			C31
			
			
			-7.2
			
			
			20.1
			
			
			-9.0
			
			
			13.4
			
		


			CAPITALAND COMMERCIAL TRUST
			
			
			C61U
			
			
			16.6
			
			
			42.1
			
			
			-5.0
			
			
			19.3
			
		


			CAPITALAND MALL TRUST
			
			
			C38U
			
			
			3.0
			
			
			19.5
			
			
			12.7
			
			
			16.3
			
		


			MAPLETREE LOGISTICS TRUST
			
			
			M44U
			
			
			10.8
			
			
			38.7
			
			
			1.5
			
			
			24.9
			
		


			HONGKONG LAND HOLDINGS
			
			
			H78
			
			
			-4.8
			
			
			5.5
			
			
			-6.1
			
			
			10.8
			
		


			CITY DEVELOPMENTS
			
			
			C09
			
			
			10.3
			
			
			53.1
			
			
			-33.8
			
			
			12.9
			
		


			SUNTEC REIT
			
			
			T82U
			
			
			13.2
			
			
			37.6
			
			
			-12.8
			
			
			9.5
			
		


			MAPLETREE COMMERCIAL TRUST
			
			
			N2IU
			
			
			14.9
			
			
			23.0
			
			
			7.6
			
			
			25.5
			
		


			UOL GROUP
			
			
			U14
			
			
			-1.5
			
			
			51.2
			
			
			-28.8
			
			
			18.7
			
		


			MAPLETREE NORTH ASIA COMMERC
			
			
			RW0U
			
			
			11.7
			
			
			38.3
			
			
			-1.1
			
			
			22.9
			
		


			KEPPEL REIT
			
			
			K71U
			
			
			17.0
			
			
			30.1
			
			
			-5.2
			
			
			11.3
			
		


			MAPLETREE INDUSTRIAL TRUST
			
			
			ME8U
			
			
			15.8
			
			
			32.2
			
			
			-0.7
			
			
			15.5
			
		


			FRASERS LOGISTICS &amp; INDUSTRI
			
			
			BUOU
			
			
			0.0
			
			
			34.0
			
			
			-4.2
			
			
			19.1
			
		


			KEPPEL DC REIT
			
			
			AJBU
			
			
			26.1
			
			
			27.0
			
			
			-0.7
			
			
			24.6
			
		


			FRASERS CENTREPOINT TRUST
			
			
			J69U
			
			
			9.1
			
			
			24.8
			
			
			2.2
			
			
			20.3
			
		


			ASCOTT RESIDENCE TRUST
			
			
			A68U
			
			
			2.4
			
			
			20.2
			
			
			-6.1
			
			
			22.6
			
		


			FRASERS COMMERCIAL TRUST
			
			
			ND8U
			
			
			7.0
			
			
			27.1
			
			
			-1.7
			
			
			17.7
			
		


			CDL HOSPITALITY TRUSTS
			
			
			J85
			
			
			8.7
			
			
			39.9
			
			
			-8.6
			
			
			13.6
			
		


			YANLORD LAND GROUP
			
			
			Z25
			
			
			33.1
			
			
			25.6
			
			
			-21.6
			
			
			7.9
			
		


			CAPITALAND RETAIL CHINA TRUS
			
			
			AU8U
			
			
			-1.0
			
			
			29.4
			
			
			-12.5
			
			
			16.3
			
		


			ESR-REIT
			
			
			J91U
			
			
			3.6
			
			
			12.0
			
			
			-1.8
			
			
			12.7
			
		


			CROMWELL EUROPEAN REIT
			
			
			CNNU
			
			
			0.0
			
			
			0.0
			
			
			-13.3
			
			
			16.0
			
		


			STARHILL GLOBAL REIT
			
			
			P40U
			
			
			4.7
			
			
			11.6
			
			
			-6.5
			
			
			13.7
			
		


			YING LI INTERNATIONAL REAL E
			
			
			5DM
			
			
			-10.2
			
			
			1.3
			
			
			-23.2
			
			
			20.7
			
		


			CACHE LOGISTICS TRUST
			
			
			K2LU
			
			
			-3.5
			
			
			19.0
			
			
			-12.2
			
			
			12.4
			
		


			FAR EAST HOSPITALITY TRUST
			
			
			Q5T
			
			
			-3.1
			
			
			27.9
			
			
			-10.8
			
			
			9.8
			
		


			MANULIFE US REAL ESTATE INV
			
			
			BTOU
			
			
			0.0
			
			
			18.3
			
			
			-7.2
			
			
			18.5
			
		


			ASCENDAS INDIA TRUST
			
			
			CY6U
			
			
			23.3
			
			
			19.1
			
			
			0.2
			
			
			27.7
			
		


			OUE HOSPITALITY TRUST
			
			
			SK7
			
			
			-1.1
			
			
			38.2
			
			
			-16.0
			
			
			6.6
			
		


			SASSEUR REAL ESTATE INVESTME
			
			
			CRPU
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			31.7
			
		


			OXLEY HOLDINGS
			
			
			5UX
			
			
			1.0
			
			
			71.9
			
			
			-44.7
			
			
			8.0
			
		


			SPH REIT
			
			
			SK6U
			
			
			5.4
			
			
			16.8
			
			
			0.6
			
			
			7.8
			
		


			APAC REALTY
			
			
			CLN
			
			
			0.0
			
			
			0.0
			
			
			-46.4
			
			
			27.8
			
		


			HONG FOK CORP
			
			
			H30
			
			
			-2.4
			
			
			38.2
			
			
			-19.9
			
			
			23.9
			
		


			ASCENDAS HOSPITALITY TRUST
			
			
			Q1P
			
			
			2.9
			
			
			30.8
			
			
			-3.6
			
			
			25.8
			
		


			LIPPO MALLS INDONESIA RETAIL
			
			
			D5IU
			
			
			27.3
			
			
			17.5
			
			
			-50.6
			
			
			28.6
			
		


			WING TAI HOLDINGS
			
			
			W05
			
			
			-6.1
			
			
			47.1
			
			
			-11.8
			
			
			5.2
			
		


			KEPPEL-KBS US REIT
			
			
			CMOU
			
			
			0.0
			
			
			0.0
			
			
			-23.9
			
			
			28.3
			
		


			FRASERS HOSPITALITY TRUST
			
			
			ACV
			
			
			-1.8
			
			
			29.3
			
			
			-4.7
			
			
			4.6
			
		


			AIMS APAC REIT
			
			
			O5RU
			
			
			3.4
			
			
			13.5
			
			
			3.9
			
			
			10.1
			
		


			ACCORDIA GOLF TRUST
			
			
			ADQU
			
			
			31.0
			
			
			17.0
			
			
			-21.1
			
			
			11.1
			
		


			OUE COMMERCIAL REAL ESTATE I
			
			
			TS0U
			
			
			14.6
			
			
			11.0
			
			
			-22.6
			
			
			9.3
			
		


			SOILBUILD BUSINESS SPACE REI
			
			
			SV3U
			
			
			-8.7
			
			
			14.2
			
			
			-6.2
			
			
			8.9
			
		


			OUE
			
			
			LJ3
			
			
			0.5
			
			
			8.2
			
			
			-22.2
			
			
			12.2
			
		


			FRASERS PROPERTY
			
			
			TQ5
			
			
			-1.2
			
			
			39.0
			
			
			-17.4
			
			
			15.1
			
		


			SABANA SHARIAH COMP IND REIT
			
			
			M1GU
			
			
			-33.5
			
			
			12.2
			
			
			6.8
			
			
			18.2
			
		


			TUAN SING HOLDINGS
			
			
			T24
			
			
			-10.6
			
			
			60.8
			
			
			-18.9
			
			
			2.3
			
		


			GUOCOLAND
			
			
			F17
			
			
			4.4
			
			
			28.1
			
			
			-16.3
			
			
			10.0
			
		


			EC WORLD REIT
			
			
			BWCU
			
			
			0.0
			
			
			8.0
			
			
			-1.2
			
			
			16.1
			
		


			DASIN RETAIL TRUST
			
			
			CEDU
			
			
			0.0
			
			
			0.0
			
			
			7.3
			
			
			5.4
			
		


			BUKIT SEMBAWANG ESTATES
			
			
			B61
			
			
			6.7
			
			
			47.1
			
			
			-7.0
			
			
			-1.4
			
		


			IREIT GLOBAL
			
			
			UD1U
			
			
			12.9
			
			
			17.3
			
			
			0.8
			
			
			8.1
			
		


			HO BEE LAND
			
			
			H13
			
			
			3.8
			
			
			24.3
			
			
			0.1
			
			
			4.5
			
		


			PROPNEX
			
			
			OYY
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			18.2
			
		


			UNITED INDUSTRIAL CORP
			
			
			U06
			
			
			-2.8
			
			
			20.6
			
			
			-16.8
			
			
			8.9
			
		


			FORTUNE REIT
			
			
			F25U
			
			
			17.5
			
			
			8.0
			
			
			-0.4
			
			
			23.6
			
		


			BOUSTEAD SINGAPORE
			
			
			F9D
			
			
			-0.6
			
			
			9.8
			
			
			-3.4
			
			
			-2.5
			
		


			SINGHAIYI GROUP
			
			
			5H0
			
			
			-13.4
			
			
			30.7
			
			
			-22.5
			
			
			11.8
			
		


			CENTURION CORP
			
			
			OU8
			
			
			-10.7
			
			
			65.9
			
			
			-16.5
			
			
			1.1
			
		


			Average:
			
			
			 
			
			
			4.1
			
			
			24.7
			
			
			-10.0
			
			
			14.7
			
		

 




			Manufacturing
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			-22.3
			
			
			86.3
			
			
			-11.4
			
			
			19.2
			
		


			VENTURE CORP
			
			
			V03
			
			
			28.0
			
			
			115.4
			
			
			-29.1
			
			
			19.1
			
		


			SINGAPORE TECH ENGINEERING
			
			
			S63
			
			
			12.3
			
			
			5.0
			
			
			11.8
			
			
			20.3
			
		


			AEM HOLDINGS
			
			
			AWX
			
			
			195.3
			
			
			498.6
			
			
			1.5
			
			
			22.4
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			-19.3
			
			
			34.9
			
			
			-15.9
			
			
			-1.9
			
		


			HI-P INTERNATIONAL
			
			
			H17
			
			
			4.6
			
			
			326.5
			
			
			-50.8
			
			
			57.1
			
		


			VALUETRONICS HOLDINGS
			
			
			BN2
			
			
			34.3
			
			
			103.5
			
			
			-22.8
			
			
			-2.3
			
		


			SUNPOWER GROUP
			
			
			5GD
			
			
			57.4
			
			
			-11.6
			
			
			-27.6
			
			
			53.0
			
		


			CREATIVE TECHNOLOGY
			
			
			C76
			
			
			-11.9
			
			
			10.9
			
			
			254.2
			
			
			0.5
			
		


			FRENCKEN GROUP
			
			
			E28
			
			
			30.3
			
			
			132.4
			
			
			-18.9
			
			
			53.9
			
		


			HAW PAR CORP
			
			
			H02
			
			
			14.9
			
			
			27.2
			
			
			7.9
			
			
			18.8
			
		


			SUNNINGDALE TECH
			
			
			BHQ
			
			
			22.4
			
			
			83.6
			
			
			-21.9
			
			
			-2.8
			
		


			FU YU CORP
			
			
			F13
			
			
			27.2
			
			
			6.6
			
			
			10.1
			
			
			13.2
			
		


			SARINE TECHNOLOGIES
			
			
			U77
			
			
			20.9
			
			
			-42.4
			
			
			-52.0
			
			
			-29.2
			
		


			RIVERSTONE HOLDINGS
			
			
			AP4
			
			
			-25.0
			
			
			25.6
			
			
			7.9
			
			
			-17.9
			
		


			INNOTEK
			
			
			M14
			
			
			48.6
			
			
			32.7
			
			
			18.3
			
			
			30.0
			
		


			MANUFACTURING INTEGRATION TE
			
			
			M11
			
			
			-25.7
			
			
			48.3
			
			
			18.1
			
			
			22.0
			
		


			CHUAN HUP HOLDINGS
			
			
			C33
			
			
			-15.7
			
			
			37.5
			
			
			-3.7
			
			
			32.1
			
		


			JEP HOLDINGS
			
			
			1J4
			
			
			-31.0
			
			
			86.2
			
			
			-3.6
			
			
			12.6
			
		


			HANWELL HOLDINGS
			
			
			DM0
			
			
			-9.4
			
			
			31.3
			
			
			-43.6
			
			
			41.5
			
		


			MIYOSHI
			
			
			M03
			
			
			19.0
			
			
			62.8
			
			
			-39.6
			
			
			4.9
			
		


			AVARGA
			
			
			U09
			
			
			64.7
			
			
			1.8
			
			
			-23.4
			
			
			20.7
			
		


			HALCYON AGRI CORP
			
			
			5VJ
			
			
			-8.3
			
			
			-5.7
			
			
			-29.8
			
			
			24.4
			
		


			Average:
			
			
			 
			
			
			17.9
			
			
			73.8
			
			
			-2.8
			
			
			17.9
			
		

 




			F&amp;B
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			THAI BEVERAGE PCL
			
			
			Y92
			
			
			27.2
			
			
			11.3
			
			
			-31.7
			
			
			40.8
			
		


			WILMAR INTERNATIONAL
			
			
			F34
			
			
			25.0
			
			
			-12.1
			
			
			4.3
			
			
			10.8
			
		


			SATS
			
			
			S58
			
			
			30.9
			
			
			10.9
			
			
			-7.2
			
			
			8.2
			
		


			JAPFA
			
			
			UD2
			
			
			94.0
			
			
			-42.8
			
			
			44.6
			
			
			-19.6
			
		


			OLAM INTERNATIONAL
			
			
			O32
			
			
			12.2
			
			
			6.5
			
			
			-15.9
			
			
			15.7
			
		


			KOUFU GROUP
			
			
			VL6
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			14.8
			
		


			SINO GRANDNESS FOOD INDUSTRY
			
			
			T4B
			
			
			-33.8
			
			
			-8.9
			
			
			-38.2
			
			
			-61.0
			
		


			DELFI
			
			
			P34
			
			
			12.0
			
			
			-35.1
			
			
			-5.3
			
			
			-6.8
			
		


			QAF
			
			
			Q01
			
			
			37.8
			
			
			-16.4
			
			
			-45.0
			
			
			36.5
			
		


			JUMBO GROUP
			
			
			42R
			
			
			49.4
			
			
			-9.6
			
			
			-31.4
			
			
			1.7
			
		


			FRASER AND NEAVE
			
			
			F99
			
			
			2.8
			
			
			26.0
			
			
			-32.1
			
			
			4.4
			
		


			BREADTALK GROUP
			
			
			CTN
			
			
			5.4
			
			
			52.1
			
			
			-1.6
			
			
			-2.5
			
		


			JB FOODS
			
			
			BEW
			
			
			32.0
			
			
			69.2
			
			
			38.7
			
			
			11.3
			
		


			KIMLY
			
			
			1D0
			
			
			0.0
			
			
			0.0
			
			
			-30.6
			
			
			2.8
			
		


			Average:
			
			
			 
			
			
			21.1
			
			
			3.7
			
			
			-10.8
			
			
			4.1
			
		

Source: SGX StockFacts, Bloomberg (Data as of 11 June 2019). Note TR = Total Return which assumes dividends are reinvested.

Distinct drivers of the three sectors included interest rate outlooks and property prices for real estate, technological advancements, value chain integration and global trade for manufacturing while incomes, tastes, preferences and tourism drive F&amp;B sales.



Real Estate, Manufacturing and F&B Shares on the Move in 1H19    

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
The iEdge SG MOE Index is a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore. The Index comprises 12 constituents, with a combined market cap of about S$30 billion. 
	 </li>
	<li>
In the YTD, the five, best-performing Index constituents were: Yangzijiang Shipbuilding (+14.4%), Marco Polo Marine (+5.3%), Sembcorp Marine (+5.2%), COSCO Shipping (+4.5%), and Keppel Corp (+3.7%). They have averaged a total return of +6.6% over the period. 
	 </li>
	<li>The five Index constituents that posted the strongest price rebound from their 52W lows were: Yangzijiang Shipbuilding (70.2%), Vallianz (26.7%), Mermaid Maritime (12.5%), COSCO Shipping (9.7%), and Sembcorp Marine (8.7%). They have averaged a 25.6% rebound from their respective 12M troughs, in line with the YTD rebound in oil prices.</li>
</ul>
 

The iEdge SG MOE Index is a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore. Constituents in the Index include shipyard operators, shipping companies as well as those providing port and offshore services. The Index comprises 12 constituents with a combined market capitalisation of about S$30 billion.

The components with the five biggest weights – Yangzijiang Shipbuilding (15.21%), Sembcorp Marine (11.04%), Hutchison Port Holdings Trust (10.73%), Keppel Corp (10.59%), and COSCO Shipping International (10.55%) – account for more than half the Index’s weighting.

Singapore’s offshore and marine industry has been battered by a slump in oil prices over the past few years, cutbacks in exploration and production (E&amp;P) spending, weak charter rates and delayed projects. This has forced a number of players to cut costs and restructure debt.

However, since the start of 2019, WTI crude has gained nearly 30%, and is set for its strongest advance since 2009. The Organization of Petroleum Exporting Countries (OPEC) and its partners – known as OPEC+ – have reduced output, while US sanctions on Iran and Venezuela have tightened supplies. Over the weekend, OPEC+ met in Azerbaijan to monitor their crude supply reduction pact, and said they would exceed commitments in the coming months. On Sunday, Saudi Arabia signalled that producers may need to extend their 1.2 million barrels per day of supply curbs past June into the second half of the year.
<figure>
 <img src="https://api2.sgx.com/sites/default/files/2019-03/WTI%20CRUDE_0.PNG" alt="WTI crude">
 </figure>
 <div class="content-caption">WTI crude</div>
In the 2019 year-to-date, the five, best-performing Index constituents were: Yangzijiang Shipbuilding (+14.4%), Marco Polo Marine (+5.3%), Sembcorp Marine (+5.2%), COSCO Shipping International (+4.5%), and Keppel Corp (+3.7%). They averaged a total return of +6.6% in the YTD, bringing their one-year and three-year total returns to -22.5% and -4.4%.

The table details the 12 constituents of the iEdge SG MOE Index, sorted by YTD total return.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Total Return YTD (%)
			</td>
			<td>
			Total Return 1Y (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			P/E (x)
			</td>
			<td>
			P/B (x)
			</td>
		</tr>
<tr>
<td>
			YANGZIJIANG SHIPBUILDING
			</td>
			<td>
			BS6
			</td>
			<td>
			14.4
			</td>
			<td>
			14.7
			</td>
			<td>
			59.9
			</td>
			<td>
			7.4
			</td>
			<td>
			1.0
			</td>
		</tr>
<tr>
<td>
			MARCO POLO MARINE
			</td>
			<td>
			5LY
			</td>
			<td>
			5.3
			</td>
			<td>
			-52.4
			</td>
			<td>
			-89.6
			</td>
			<td>
			0.4
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			SEMBCORP MARINE
			</td>
			<td>
			S51
			</td>
			<td>
			5.2
			</td>
			<td>
			-22.9
			</td>
			<td>
			0.3
			</td>
			<td>
			NA
			</td>
			<td>
			1.5
			</td>
		</tr>
<tr>
<td>
			COSCO SHIPPING INTL
			</td>
			<td>
			F83
			</td>
			<td>
			4.5
			</td>
			<td>
			-33.7
			</td>
			<td>
			-9.2
			</td>
			<td>
			59.5
			</td>
			<td>
			1.5
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORP 
			</td>
			<td>
			BN4
			</td>
			<td>
			3.7
			</td>
			<td>
			-18.2
			</td>
			<td>
			16.7
			</td>
			<td>
			12.1
			</td>
			<td>
			1.0
			</td>
		</tr>
<tr>
<td>
			HUTCHISON PORT HOLDINGS TRUST
			</td>
			<td>
			NS8U
			</td>
			<td>
			1.6
			</td>
			<td>
			-20.8
			</td>
			<td>
			-40.6
			</td>
			<td>
			NA
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			SEMBCORP INDUSTRIES
			</td>
			<td>
			U96
			</td>
			<td>
			-0.8
			</td>
			<td>
			-17.1
			</td>
			<td>
			-9.8
			</td>
			<td>
			15.2
			</td>
			<td>
			0.7
			</td>
		</tr>
<tr>
<td>
			MERMAID MARITIME
			</td>
			<td>
			DU4
			</td>
			<td>
			-1.1
			</td>
			<td>
			-44.5
			</td>
			<td>
			-16.5
			</td>
			<td>
			NA
			</td>
			<td>
			0.3
			</td>
		</tr>
<tr>
<td>
			EZION HOLDINGS
			</td>
			<td>
			5ME
			</td>
			<td>
			-6.5
			</td>
			<td>
			-78.2
			</td>
			<td>
			-92.1
			</td>
			<td>
			NA
			</td>
			<td>
			-0.4
			</td>
		</tr>
<tr>
<td>
			AUSGROUP LTD
			</td>
			<td>
			5GJ
			</td>
			<td>
			-12.5
			</td>
			<td>
			-46.7
			</td>
			<td>
			-76.0
			</td>
			<td>
			6.1
			</td>
			<td>
			0.9
			</td>
		</tr>
<tr>
<td>
			NORDIC GROUP
			</td>
			<td>
			MR7
			</td>
			<td>
			-21.3
			</td>
			<td>
			-43.9
			</td>
			<td>
			88.5
			</td>
			<td>
			10.7
			</td>
			<td>
			1.5
			</td>
		</tr>
<tr>
<td>
			VALLIANZ HOLDING
			</td>
			<td>
			WPC
			</td>
			<td>
			-36.0
			</td>
			<td>
			-50.8
			</td>
			<td>
			-86.2
			</td>
			<td>
			7.5
			</td>
			<td>
			0.3
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 15 March 2019)

The five Index constituents that posted the strongest price recovery from their 52-week lows were: Yangzijiang Shipbuilding (70.2%), Vallianz Holdings (26.7%), Mermaid Maritime (12.5%), COSCO Shipping (9.7%), and Sembcorp Marine (8.7%). These five stocks have averaged a 25.6% rebound from their respective 12-month troughs.

The table details the 12 constituents of the iEdge SG MOE Index, sorted by percentage price gain from 52-week lows.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Index Weight (%)
			</td>
			<td>
			Market Cap (S$M)
			</td>
			<td>
			Last Price (S$)
			</td>
			<td>
			52W Low Price (S$)
			</td>
			<td>
			52W Low Date
			</td>
			<td>
			% Chg vs 52W Low
			</td>
		</tr>
<tr>
<td>
			YANGZIJIANG SHIPBUILDING
			</td>
			<td>
			BS6
			</td>
			<td>
			15.21
			</td>
			<td>
			5,721
			</td>
			<td>
			1.43
			</td>
			<td>
			0.84
			</td>
			<td>
			07/18/2018
			</td>
			<td>
			70.2
			</td>
		</tr>
<tr>
<td>
			VALLIANZ HOLDINGS
			</td>
			<td>
			WPC
			</td>
			<td>
			2.88
			</td>
			<td>
			109
			</td>
			<td>
			0.19
			</td>
			<td>
			0.15
			</td>
			<td>
			10/29/2018
			</td>
			<td>
			26.7
			</td>
		</tr>
<tr>
<td>
			MERMAID MARITIME
			</td>
			<td>
			DU4
			</td>
			<td>
			6.75
			</td>
			<td>
			120
			</td>
			<td>
			0.09
			</td>
			<td>
			0.08
			</td>
			<td>
			03/11/2019
			</td>
			<td>
			12.5
			</td>
		</tr>
<tr>
<td>
			COSCO SHIPPING INTL
			</td>
			<td>
			F83
			</td>
			<td>
			10.55
			</td>
			<td>
			773
			</td>
			<td>
			0.34
			</td>
			<td>
			0.31
			</td>
			<td>
			12/26/2018
			</td>
			<td>
			9.7
			</td>
		</tr>
<tr>
<td>
			SEMBCORP MARINE
			</td>
			<td>
			S51
			</td>
			<td>
			11.04
			</td>
			<td>
			3,363
			</td>
			<td>
			1.62
			</td>
			<td>
			1.49
			</td>
			<td>
			12/26/2018
			</td>
			<td>
			8.7
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORP 
			</td>
			<td>
			BN4
			</td>
			<td>
			10.59
			</td>
			<td>
			11,074
			</td>
			<td>
			6.13
			</td>
			<td>
			5.67
			</td>
			<td>
			12/26/2018
			</td>
			<td>
			8.1
			</td>
		</tr>
<tr>
<td>
			HUTCHISON PORT HOLDINGS TRUST
			</td>
			<td>
			NS8U
			</td>
			<td>
			10.73
			</td>
			<td>
			2,835
			</td>
			<td>
			0.32
			</td>
			<td>
			0.30
			</td>
			<td>
			03/01/2019
			</td>
			<td>
			6.7
			</td>
		</tr>
<tr>
<td>
			SEMBCORP INDUSTRIES
			</td>
			<td>
			U96
			</td>
			<td>
			10.52
			</td>
			<td>
			4,550
			</td>
			<td>
			2.52
			</td>
			<td>
			2.43
			</td>
			<td>
			12/26/2018
			</td>
			<td>
			3.7
			</td>
		</tr>
<tr>
<td>
			EZION HOLDINGS
			</td>
			<td>
			5ME
			</td>
			<td>
			6.57
			</td>
			<td>
			160
			</td>
			<td>
			0.04
			</td>
			<td>
			0.04
			</td>
			<td>
			11/22/2018
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			NORDIC GROUP
			</td>
			<td>
			MR7
			</td>
			<td>
			4.66
			</td>
			<td>
			124
			</td>
			<td>
			0.31
			</td>
			<td>
			0.31
			</td>
			<td>
			03/12/2019
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			AUSGROUP LTD
			</td>
			<td>
			5GJ
			</td>
			<td>
			5.22
			</td>
			<td>
			88
			</td>
			<td>
			0.03
			</td>
			<td>
			0.03
			</td>
			<td>
			03/08/2019
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			MARCO POLO MARINE
			</td>
			<td>
			5LY
			</td>
			<td>
			5.29
			</td>
			<td>
			70
			</td>
			<td>
			0.02
			</td>
			<td>
			0.02
			</td>
			<td>
			12/26/2018
			</td>
			<td>
			0.0
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 15 March 2019)
</body></html>





The iEdge SG MOE Index is a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore. The Index comprises 12 constituents, with a combined market cap of about S$30 billion. 
	 
	
In the YTD, the five, best-performing Index constituents were: Yangzijiang Shipbuilding (+14.4%), Marco Polo Marine (+5.3%), Sembcorp Marine (+5.2%), COSCO Shipping (+4.5%), and Keppel Corp (+3.7%). They have averaged a total return of +6.6% over the period. 
	 
	The five Index constituents that posted the strongest price rebound from their 52W lows were: Yangzijiang Shipbuilding (70.2%), Vallianz (26.7%), Mermaid Maritime (12.5%), COSCO Shipping (9.7%), and Sembcorp Marine (8.7%). They have averaged a 25.6% rebound from their respective 12M troughs, in line with the YTD rebound in oil prices.

 

The iEdge SG MOE Index is a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore. Constituents in the Index include shipyard operators, shipping companies as well as those providing port and offshore services. The Index comprises 12 constituents with a combined market capitalisation of about S$30 billion.

The components with the five biggest weights – Yangzijiang Shipbuilding (15.21%), Sembcorp Marine (11.04%), Hutchison Port Holdings Trust (10.73%), Keppel Corp (10.59%), and COSCO Shipping International (10.55%) – account for more than half the Index’s weighting.

Singapore’s offshore and marine industry has been battered by a slump in oil prices over the past few years, cutbacks in exploration and production (E&amp;P) spending, weak charter rates and delayed projects. This has forced a number of players to cut costs and restructure debt.

However, since the start of 2019, WTI crude has gained nearly 30%, and is set for its strongest advance since 2009. The Organization of Petroleum Exporting Countries (OPEC) and its partners – known as OPEC+ – have reduced output, while US sanctions on Iran and Venezuela have tightened supplies. Over the weekend, OPEC+ met in Azerbaijan to monitor their crude supply reduction pact, and said they would exceed commitments in the coming months. On Sunday, Saudi Arabia signalled that producers may need to extend their 1.2 million barrels per day of supply curbs past June into the second half of the year.

      
    
    WTI crude
In the 2019 year-to-date, the five, best-performing Index constituents were: Yangzijiang Shipbuilding (+14.4%), Marco Polo Marine (+5.3%), Sembcorp Marine (+5.2%), COSCO Shipping International (+4.5%), and Keppel Corp (+3.7%). They averaged a total return of +6.6% in the YTD, bringing their one-year and three-year total returns to -22.5% and -4.4%.

The table details the 12 constituents of the iEdge SG MOE Index, sorted by YTD total return.




			Name
			
			
			SGX Code
			
			
			Total Return YTD (%)
			
			
			Total Return 1Y (%)
			
			
			Total Return 3Y (%)
			
			
			P/E (x)
			
			
			P/B (x)
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			14.4
			
			
			14.7
			
			
			59.9
			
			
			7.4
			
			
			1.0
			
		


			MARCO POLO MARINE
			
			
			5LY
			
			
			5.3
			
			
			-52.4
			
			
			-89.6
			
			
			0.4
			
			
			0.6
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			5.2
			
			
			-22.9
			
			
			0.3
			
			
			NA
			
			
			1.5
			
		


			COSCO SHIPPING INTL
			
			
			F83
			
			
			4.5
			
			
			-33.7
			
			
			-9.2
			
			
			59.5
			
			
			1.5
			
		


			KEPPEL CORP 
			
			
			BN4
			
			
			3.7
			
			
			-18.2
			
			
			16.7
			
			
			12.1
			
			
			1.0
			
		


			HUTCHISON PORT HOLDINGS TRUST
			
			
			NS8U
			
			
			1.6
			
			
			-20.8
			
			
			-40.6
			
			
			NA
			
			
			0.6
			
		


			SEMBCORP INDUSTRIES
			
			
			U96
			
			
			-0.8
			
			
			-17.1
			
			
			-9.8
			
			
			15.2
			
			
			0.7
			
		


			MERMAID MARITIME
			
			
			DU4
			
			
			-1.1
			
			
			-44.5
			
			
			-16.5
			
			
			NA
			
			
			0.3
			
		


			EZION HOLDINGS
			
			
			5ME
			
			
			-6.5
			
			
			-78.2
			
			
			-92.1
			
			
			NA
			
			
			-0.4
			
		


			AUSGROUP LTD
			
			
			5GJ
			
			
			-12.5
			
			
			-46.7
			
			
			-76.0
			
			
			6.1
			
			
			0.9
			
		


			NORDIC GROUP
			
			
			MR7
			
			
			-21.3
			
			
			-43.9
			
			
			88.5
			
			
			10.7
			
			
			1.5
			
		


			VALLIANZ HOLDING
			
			
			WPC
			
			
			-36.0
			
			
			-50.8
			
			
			-86.2
			
			
			7.5
			
			
			0.3
			
		

Source: Bloomberg &amp; StockFacts (data as of 15 March 2019)

The five Index constituents that posted the strongest price recovery from their 52-week lows were: Yangzijiang Shipbuilding (70.2%), Vallianz Holdings (26.7%), Mermaid Maritime (12.5%), COSCO Shipping (9.7%), and Sembcorp Marine (8.7%). These five stocks have averaged a 25.6% rebound from their respective 12-month troughs.

The table details the 12 constituents of the iEdge SG MOE Index, sorted by percentage price gain from 52-week lows.




			Name
			
			
			SGX Code
			
			
			Index Weight (%)
			
			
			Market Cap (S$M)
			
			
			Last Price (S$)
			
			
			52W Low Price (S$)
			
			
			52W Low Date
			
			
			% Chg vs 52W Low
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			15.21
			
			
			5,721
			
			
			1.43
			
			
			0.84
			
			
			07/18/2018
			
			
			70.2
			
		


			VALLIANZ HOLDINGS
			
			
			WPC
			
			
			2.88
			
			
			109
			
			
			0.19
			
			
			0.15
			
			
			10/29/2018
			
			
			26.7
			
		


			MERMAID MARITIME
			
			
			DU4
			
			
			6.75
			
			
			120
			
			
			0.09
			
			
			0.08
			
			
			03/11/2019
			
			
			12.5
			
		


			COSCO SHIPPING INTL
			
			
			F83
			
			
			10.55
			
			
			773
			
			
			0.34
			
			
			0.31
			
			
			12/26/2018
			
			
			9.7
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			11.04
			
			
			3,363
			
			
			1.62
			
			
			1.49
			
			
			12/26/2018
			
			
			8.7
			
		


			KEPPEL CORP 
			
			
			BN4
			
			
			10.59
			
			
			11,074
			
			
			6.13
			
			
			5.67
			
			
			12/26/2018
			
			
			8.1
			
		


			HUTCHISON PORT HOLDINGS TRUST
			
			
			NS8U
			
			
			10.73
			
			
			2,835
			
			
			0.32
			
			
			0.30
			
			
			03/01/2019
			
			
			6.7
			
		


			SEMBCORP INDUSTRIES
			
			
			U96
			
			
			10.52
			
			
			4,550
			
			
			2.52
			
			
			2.43
			
			
			12/26/2018
			
			
			3.7
			
		


			EZION HOLDINGS
			
			
			5ME
			
			
			6.57
			
			
			160
			
			
			0.04
			
			
			0.04
			
			
			11/22/2018
			
			
			0.0
			
		


			NORDIC GROUP
			
			
			MR7
			
			
			4.66
			
			
			124
			
			
			0.31
			
			
			0.31
			
			
			03/12/2019
			
			
			0.0
			
		


			AUSGROUP LTD
			
			
			5GJ
			
			
			5.22
			
			
			88
			
			
			0.03
			
			
			0.03
			
			
			03/08/2019
			
			
			0.0
			
		


			MARCO POLO MARINE
			
			
			5LY
			
			
			5.29
			
			
			70
			
			
			0.02
			
			
			0.02
			
			
			12/26/2018
			
			
			0.0
			
		

Source: Bloomberg &amp; StockFacts (data as of 15 March 2019)



Five Best Performers of SGX MOE Index Average 7% YTD Gain

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
WTI crude has advanced nearly 15% since the start of 2019 as OPEC and its allies began cutting production to ease worries over a supply glut, and the US government slapped sanctions on Venezuela’s state-owned oil firm PdVSA. 
	 </li>
	<li>
In the YTD, Singapore’s three biggest shipyard stocks have averaged a total return of +6.2%, bringing their 1Y and 3Y total returns to -24.1% and +41.3% respectively. In comparison, the benchmark STI has registered a total return of +4.4% in the same period. 
	 </li>
	<li>
Following crude’s rally, these three largest shipyard plays are now trading marginally above par value at an average P/B ratio of 1.2x. Their share prices have also recovered in tandem with higher oil prices – rebounding an average 27% from their 52W lows. 
	 </li>
</ul>
SGX lists a total of 12 shipyard stocks, which are classified under the Industrials Sector. Among these, the three largest operators are Keppel Corp, Yangzijiang Shipbuilding, and Sembcorp Marine. They have a combined market capitalisation of nearly S$20 billion.

iEdge SG MOE Index

Shipyard stocks are well-represented in SGX’s iEdge SG MOE Index – a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore.

The Index comprises 13 constituents, which have a combined market capitalisation of nearly S$30 billion. Constituents of the Index include shipyard operators, shipping companies and companies providing offshore services. Yangzijiang Shipbuilding has the second highest weighting in the Index, at 6.94%, while Sembcorp Marine has a weighting of 5.16%, followed by Keppel Corp with 5.10%.

Crude Price Rally

Over the past few years, Singapore’s offshore and marine industry has been battered by a slump in oil prices, cutbacks in exploration and production (E&amp;P) spending, weak charter rates and delayed projects. This has forced a number of players to cut costs and restructure debt.

Offshore and marine stocks, including shipyard operators, are seen as a proxy to higher crude prices. WTI crude has advanced nearly 15% since the start of 2019 as the Organization of Petroleum Exporting Countries (OPEC) and its allies began cutting production to ease worries over a supply glut, and after the US government slapped sanctions on Venezuela’s state-owned oil firm PdVSA earlier this week. However, analysts expect price volatility to continue, due to ongoing trade tensions and concerns over China’s slowing economic growth.
<figure>
 <img src="https://api2.sgx.com/sites/default/files/2019-01/12.PNG" alt="WTI Crude Oil">
 </figure>
 <div class="content-caption">WTI Crude Oil</div>
Prices, Valuations Rebound

In the 2019 year-to-date, Singapore’s three biggest shipyard stocks – Keppel Corp, Yangzijiang Shipbuilding and Sembcorp Marine – have averaged a total return of +6.2%, bringing their one-year and three-year total returns to -24.1% and +41.3% respectively. In comparison, the benchmark Straits Times Index has registered a total return of +4.4% in the YTD.

The table below details SGX’s three largest shipyard operators, sorted by YTD total returns.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Market Cap (S$ mln)
			</td>
			<td>
			Total Return YTD (%)
			</td>
			<td>
			Total Return 1Y (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			P/B (x)
			</td>
			<td>
			P/B 5Y Avg (x)
			</td>
			<td>
			ROE (%)
			</td>
		</tr>
<tr>
<td>
			YANGZIJIANG SHIPBUILDING
			</td>
			<td>
			BS6
			</td>
			<td>
			5,366.2
			</td>
			<td>
			8.0
			</td>
			<td>
			-11.5
			</td>
			<td>
			64.8
			</td>
			<td>
			1.0
			</td>
			<td>
			0.9
			</td>
			<td>
			11.6
			</td>
		</tr>
<tr>
<td>
			SEMBCORP MARINE
			</td>
			<td>
			S51
			</td>
			<td>
			3,425.3
			</td>
			<td>
			5.8
			</td>
			<td>
			-35.8
			</td>
			<td>
			13.4
			</td>
			<td>
			1.5
			</td>
			<td>
			1.7
			</td>
			<td>
			-4.7
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORP
			</td>
			<td>
			BN4
			</td>
			<td>
			11,110.0
			</td>
			<td>
			4.9
			</td>
			<td>
			-24.9
			</td>
			<td>
			45.6
			</td>
			<td>
			1.0
			</td>
			<td>
			1.1
			</td>
			<td>
			8.3
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			6.2
			</td>
			<td>
			-24.1
			</td>
			<td>
			41.3
			</td>
			<td>
			1.2
			</td>
			<td>
			1.2
			</td>
			<td>
			5.1
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 25 January 2019)

Following the rally in crude prices, SGX’s three largest shipyard stocks are now trading marginally above par value at an average price-to-book (P/B) ratio of 1.2x. In particular, Keppel Corp and Yangzijiang Shipbuilding are trading at 1.0x, compared with their five-year P/B averages of 1.1x and 0.9x respectively, while Sembcorp Marine is trading at 1.5x, compared with its five-year P/B average of 1.7x.

The share prices of the three largest shipyard operators have also recovered in tandem with higher oil prices – rebounding an average of 26.5% from their 52-week lows. Keppel Corp and Sembcorp Marine have recovered 9.3% and 9.4% respectively from their 12-month troughs, while Yangzijiang Shipbuilding has registered a 60.7% price gain from its 52-week low.

The table below details the 52-week low prices, dates and percentage changes from current price levels of the three largest shipyard operators, sorted by market capitalisation.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Market Cap (S$ mln)
			</td>
			<td>
			Last Price
			</td>
			<td>
			Price Chg vs 52W Low (%)
			</td>
			<td>
			52W Low
			</td>
			<td>
			52W Low Date
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORP
			</td>
			<td>
			BN4
			</td>
			<td>
			11,110.0
			</td>
			<td>
			6.20
			</td>
			<td>
			9.3
			</td>
			<td>
			5.67
			</td>
			<td>
			26-Dec-18
			</td>
		</tr>
<tr>
<td>
			YANGZIJIANG SHIPBUILDING
			</td>
			<td>
			BS6
			</td>
			<td>
			5,366.2
			</td>
			<td>
			1.35
			</td>
			<td>
			60.7
			</td>
			<td>
			0.84
			</td>
			<td>
			18-Jul-18
			</td>
		</tr>
<tr>
<td>
			SEMBCORP MARINE
			</td>
			<td>
			S51
			</td>
			<td>
			3,425.3
			</td>
			<td>
			1.63
			</td>
			<td>
			9.4
			</td>
			<td>
			1.49
			</td>
			<td>
			26-Dec-18
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			26.5
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 25 January 2019)

P/B ratios are one of the valuation metrics used to value the MOE Sector, especially when earnings may be depressed or negative, which could result in abnormal or unavailable price-to-earnings (P/E) ratios. Aside from analysts’ expectations and earnings estimates, investors should also look out for other key indicators for the sector, such as order book momentum, positive operating cash flows, and balance sheet strength.

Gradual Sector Recovery 

Analysts have noted that although the worst appears to be over for Singapore shipyards, the industry recovery remains protracted.

“The overall conventional shipping market is expected to remain on a recovery path, albeit gradual. Global order book-to-fleet ratio has dropped to a low of less than 10%, implying moderating new supply going forward,” DBS Research noted in a sector strategy <a href="https://www.dbs.com.sg/treasures/aics/templatedata/article/generic/data/en/GR/112018/181126_insights_pitch_on_value.xml">report</a> published on 26 November 2018.

On the scrapping side, the new Ballast Water Management Convention rule with its two-year gestation period – which took effect in September 2017 – should continue to drive demolition of old vessels, but demand growth will still remain slow, given lower global economic growth and continuing trade tensions, the bank said in the report.

“Against this backdrop, we expect shipbuilding consolidation to continue, and the market to improve with a moderate uptick in orders,” the report added.
</body></html>





WTI crude has advanced nearly 15% since the start of 2019 as OPEC and its allies began cutting production to ease worries over a supply glut, and the US government slapped sanctions on Venezuela’s state-owned oil firm PdVSA. 
	 
	
In the YTD, Singapore’s three biggest shipyard stocks have averaged a total return of +6.2%, bringing their 1Y and 3Y total returns to -24.1% and +41.3% respectively. In comparison, the benchmark STI has registered a total return of +4.4% in the same period. 
	 
	
Following crude’s rally, these three largest shipyard plays are now trading marginally above par value at an average P/B ratio of 1.2x. Their share prices have also recovered in tandem with higher oil prices – rebounding an average 27% from their 52W lows. 
	 

SGX lists a total of 12 shipyard stocks, which are classified under the Industrials Sector. Among these, the three largest operators are Keppel Corp, Yangzijiang Shipbuilding, and Sembcorp Marine. They have a combined market capitalisation of nearly S$20 billion.

iEdge SG MOE Index

Shipyard stocks are well-represented in SGX’s iEdge SG MOE Index – a free-float, market capitalisation-weighted index that measures the performance of listed maritime and offshore (MOE) companies in Singapore.

The Index comprises 13 constituents, which have a combined market capitalisation of nearly S$30 billion. Constituents of the Index include shipyard operators, shipping companies and companies providing offshore services. Yangzijiang Shipbuilding has the second highest weighting in the Index, at 6.94%, while Sembcorp Marine has a weighting of 5.16%, followed by Keppel Corp with 5.10%.

Crude Price Rally

Over the past few years, Singapore’s offshore and marine industry has been battered by a slump in oil prices, cutbacks in exploration and production (E&amp;P) spending, weak charter rates and delayed projects. This has forced a number of players to cut costs and restructure debt.

Offshore and marine stocks, including shipyard operators, are seen as a proxy to higher crude prices. WTI crude has advanced nearly 15% since the start of 2019 as the Organization of Petroleum Exporting Countries (OPEC) and its allies began cutting production to ease worries over a supply glut, and after the US government slapped sanctions on Venezuela’s state-owned oil firm PdVSA earlier this week. However, analysts expect price volatility to continue, due to ongoing trade tensions and concerns over China’s slowing economic growth.

      
    
    WTI Crude Oil
Prices, Valuations Rebound

In the 2019 year-to-date, Singapore’s three biggest shipyard stocks – Keppel Corp, Yangzijiang Shipbuilding and Sembcorp Marine – have averaged a total return of +6.2%, bringing their one-year and three-year total returns to -24.1% and +41.3% respectively. In comparison, the benchmark Straits Times Index has registered a total return of +4.4% in the YTD.

The table below details SGX’s three largest shipyard operators, sorted by YTD total returns.




			Name
			
			
			SGX Code
			
			
			Market Cap (S$ mln)
			
			
			Total Return YTD (%)
			
			
			Total Return 1Y (%)
			
			
			Total Return 3Y (%)
			
			
			P/B (x)
			
			
			P/B 5Y Avg (x)
			
			
			ROE (%)
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			5,366.2
			
			
			8.0
			
			
			-11.5
			
			
			64.8
			
			
			1.0
			
			
			0.9
			
			
			11.6
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			3,425.3
			
			
			5.8
			
			
			-35.8
			
			
			13.4
			
			
			1.5
			
			
			1.7
			
			
			-4.7
			
		


			KEPPEL CORP
			
			
			BN4
			
			
			11,110.0
			
			
			4.9
			
			
			-24.9
			
			
			45.6
			
			
			1.0
			
			
			1.1
			
			
			8.3
			
		


			Average
			
			
			 
			
			
			 
			
			
			6.2
			
			
			-24.1
			
			
			41.3
			
			
			1.2
			
			
			1.2
			
			
			5.1
			
		

Source: Bloomberg &amp; StockFacts (data as of 25 January 2019)

Following the rally in crude prices, SGX’s three largest shipyard stocks are now trading marginally above par value at an average price-to-book (P/B) ratio of 1.2x. In particular, Keppel Corp and Yangzijiang Shipbuilding are trading at 1.0x, compared with their five-year P/B averages of 1.1x and 0.9x respectively, while Sembcorp Marine is trading at 1.5x, compared with its five-year P/B average of 1.7x.

The share prices of the three largest shipyard operators have also recovered in tandem with higher oil prices – rebounding an average of 26.5% from their 52-week lows. Keppel Corp and Sembcorp Marine have recovered 9.3% and 9.4% respectively from their 12-month troughs, while Yangzijiang Shipbuilding has registered a 60.7% price gain from its 52-week low.

The table below details the 52-week low prices, dates and percentage changes from current price levels of the three largest shipyard operators, sorted by market capitalisation.




			Name
			
			
			SGX Code
			
			
			Market Cap (S$ mln)
			
			
			Last Price
			
			
			Price Chg vs 52W Low (%)
			
			
			52W Low
			
			
			52W Low Date
			
		


			KEPPEL CORP
			
			
			BN4
			
			
			11,110.0
			
			
			6.20
			
			
			9.3
			
			
			5.67
			
			
			26-Dec-18
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			5,366.2
			
			
			1.35
			
			
			60.7
			
			
			0.84
			
			
			18-Jul-18
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			3,425.3
			
			
			1.63
			
			
			9.4
			
			
			1.49
			
			
			26-Dec-18
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			26.5
			
			
			 
			
			
			 
			
		

Source: Bloomberg &amp; StockFacts (data as of 25 January 2019)

P/B ratios are one of the valuation metrics used to value the MOE Sector, especially when earnings may be depressed or negative, which could result in abnormal or unavailable price-to-earnings (P/E) ratios. Aside from analysts’ expectations and earnings estimates, investors should also look out for other key indicators for the sector, such as order book momentum, positive operating cash flows, and balance sheet strength.

Gradual Sector Recovery 

Analysts have noted that although the worst appears to be over for Singapore shipyards, the industry recovery remains protracted.

“The overall conventional shipping market is expected to remain on a recovery path, albeit gradual. Global order book-to-fleet ratio has dropped to a low of less than 10%, implying moderating new supply going forward,” DBS Research noted in a sector strategy report published on 26 November 2018.

On the scrapping side, the new Ballast Water Management Convention rule with its two-year gestation period – which took effect in September 2017 – should continue to drive demolition of old vessels, but demand growth will still remain slow, given lower global economic growth and continuing trade tensions, the bank said in the report.

“Against this backdrop, we expect shipbuilding consolidation to continue, and the market to improve with a moderate uptick in orders,” the report added.



Rising Crude Prices Lift Singapore’s Largest Shipyard Stocks

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Long Term Returns of Temasek’s Major SGX-listed Investments

The Home Grown Leaders of Singapore’s Industrials Sector

Singapore

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

Frencken Group Limited designs, develops, and produces complex and advanced modules and systems, based on precision mechanics, hardware and software.

Hong Leong Asia Limited manufactures and fabricates precast concrete products, trades and distributes steel and cement products,  The Company also manufactures and distributes refrigerators and freezers, assembles air-conditioners and diesel engines as well as manufactures and sells metal drums and containers, plastic packaging related products, and container components.

China Yuchai International Limited is a holding company.  Through its subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), manufactures, assembles, and sells diesel engines in China.

China Yuchai International Limited (CYD US)

COSCO SHIPPING International (Singapore) Co., Ltd. provides ship building and repairing and marine engineering services. The Company offers bulk, liquefied natural gas, and special purpose carriers, as well as oil tankers. COSCO SHIPPING International serves customers worldwide.

COSCO SHIPPING International (Singapore) (COS SP)

InnoTek Ltd., through its subsidiaries, manufactures metal components.  The Company offers metal stamping, commercial tool and die fabrications, sub-assembly work and frame manufacturing.  InnoTek primarily serves customers in Japan and Europe.

World Precision Machinery Limited manufactures and supplies stamping machines and related metal components. The Company's other products include bending, cutting and CNC punching machines.

Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. The Company's businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces.

Fu Yu Corporation Limited manufactures and sells precision plastic injection molds and plastic components.  The Company also manufactures and sells plastic, aluminum parts, electronic products, and equipment for medical use.

Grand Banks Yachts Limited, through its subsidiaries, builds and sells diesel-powered cruisers, and purchases and sells new and used yachts and boats. The Company also provides yacht repair and maintenance services, promotional and technical services, and manufactures and sells fiberglass yachts.

Terex Corporation is a diversified global manufacturer operating in four business segments: aerial work platforms; construction; cranes; and materials processing.  Terex manufactures a broad range of equipment for use in various industries including the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.

Avic Heavy Machinery Co., Ltd. develops, manufactures, and markets hydraulic pumps and motors, Rzeppa constant velocity joints, and other  related products.

EnPro Industries, Inc. designs, develops, manufactures, and markets proprietary engineered industrial products.  The Company's products include sealing products, metal polymer bearing products, air compressor systems and vacuum pumps, diesel and natural gas engines, and specialized tooling.  EnPro sells its products to customers located around the world.

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

Timken India Limited provides friction management solutions for a wide range of industry applications across the globe; from agriculture to construction, from heavy industrial applications to automobiles and from rail to related products. Timken provides a complete package solution for bearings and roll-shop maintenance.

Tian Di Science & Technology Co., Ltd. develops and manufactures mining automation control systems, mining machines, coal preparation equipment, and materials and equipment used for underground engineering. The Company also provides technical services and undertakes underground special construction projects.

Tian Di Science & Technology Co., (600582 CH)

HOSHIZAKI ELECTRIC CORPORATION manufactures and sells commercial use kitchen equipment such as freezers, refrigerators, food/beverage dispensers.  The Company has sales subsidiaries across Japan as well as overseas.

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

Sainty Marine Corp Ltd is a ship builder, designer, ship trader and heavy cargo ocean transporter.  The Company is based in Nanjing, China. Sainty Marine is also involved in financing support and technical services.

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

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Rising Crude Prices Lift Singapore’s Largest Shipyard Stocks

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The Home Grown Leaders of Singapore’s Industrials Sector

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