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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

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DBS shares listed on the Stock Exchange of Malaysia and Singapore 50 years ago tomorrow, on 29 Nov 1968. DBS Group Holdings is now South East Asia’s largest capitalised primary- listed stock with a market capitalisation of S$61 billion. 
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Singapore’s three listed Banks, DBS, OCBC &amp; UOB have averaged long term annualised total returns of 10% over the past 30 years, and maintain a significant 9% weighting of the FTSE ASEAN All-Share Index (which has 1122 constituents). 
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	<li>For their 9MFY18 (ending 30 Sep) DBS, OCBC &amp; UOB have averaged 25% YoY net profit growth. Combined, the three banks reported total income (pre allowances, expenses &amp; taxes) of S$24.2 billion for the 9MFY18, up from S$22.1 billion in 9MFY17.</li>
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South East Asia’s largest primary listed stock is DBS Group Holdings (“DBS”) with a market capitalisation of S$61 billion. Its capitalisation ranking is closely followed in size by Indonesia’s Bank Central Asia TBK PT which was founded in 1957, 11 years prior to DBS.

As the DBS 2017 Annual Report highlighted (click <a href="https://www.dbs.com/annualreports/2017/pdfs/DBS-AR17-full.pdf">here</a>) 2018 marks DBS’ 50th anniversary with the tracing of its roots back to 1968, when as the Development Bank of Singapore, it played a key role in financing the industrialisation of a newly independent nation.

Stock History

As highlighted in the Development Bank of Singapore’s Annual Report 1968, its shares received official quotation on the Stock Exchange of Malaysia and Singapore on 29 November 1968. Quotation was once common language for listing as prices were written and quoted on a chalkboard.

The Straits Times Market Correspondent on the morning of 30 November, noted that in its first day DBS was the most active stock with approximately half a million shares turned over. Market commentary (click <a href="http://eresources.nlb.gov.sg/newspapers/Digitised/Article/straitstimes19681130-1.2.108">here</a>) noted the shares saw a modest premium which “was expected as the counter will hardly be expected to develop into a speculative one”. 

The Development Bank of Singapore’s first Annual Report (click <a href="https://www.singaporememory.sg/contents/SMB-92f60852-6853-4b59-802c-4df1803d056c?nextrecord=54&amp;itemtype=all&amp;listtype=partners&amp;id=70&amp;nextrecordmain=54&amp;letter=D&amp;memory=SMB-92f60852-6853-4b59-802c-4df1803d056c">here</a>) also included an overview of its initial development financing and commercial banking operations, lines of credit, management, organisation and staff by its Chairman and President in 1969, Mr Hon Sui Sen.  

Mr Hon played a key role in the development of Singapore’s Financial Sector, and soon after heading the establishment of the Development Bank of Singapore, became Singapore’s Minister of Finance.

Consistent Long Term Returns &amp; Average Dividend Yield of 4.1%

Singapore’s listed Bank Sector consists of DBS, Oversea-Chinese Banking Corporation  ("OCBC") and United Overseas Bank ("UOB"). Together the three banks maintain a combined market capitalisation of S$149 billion.

As tabled below, there has been a degree of consistency in the past long term total returns of the three banks spanning 8.0% average annualised returns over the past five years, to 10.3% average annualised returns over the past 30 years.
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 <img src="https://api2.sgx.com/sites/default/files/2019-01/Capture.PNG" alt="DBS, OCBC, UOB Annualized total returns">
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 <div class="content-caption">DBS, OCBC, UOB Annualized total returns</div>
Total returns take into account price changes and assume dividends are reinvested. According to SGX StockFacts (click <a href="http://www.sgx.com/wps/wcm/connect/sgx_en/home/newsflash/sgx.com/stockfacts">here</a>)DBS currently maintains a dividend yield of 5.1%, OCBC maintains a dividend yield of 3.5% and UOB maintains a dividend yield of 3.8%.

For their 9MFY18 (ending 30 Sep) DBS, OCBC &amp; UOB have averaged 25% YoY net profit growth. Combined, the three banks reported total income (pre allowances, expenses &amp; taxes) of S$24.2 billion for the 9MFY18, up from S$22.1 billion in 9MFY17. For more details click <a href="http://www.sgx.com/wps/wcm/connect/sgx_en/home/newsflash/mu_05112018_5">here</a>.

As illustrated below,  the combined quarterly net interest income for the three banks has gradually grown in recent years and been consistently above S$4.0 billion for each quarter since the end of 2014. This has coincided with gradual increases of local interest rates as represented by the 1-month Swap Offer Rate (“SOR”) and 3-month Singapore Interbank Offered Rate (“SIBOR“).
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 <img src="https://api2.sgx.com/sites/default/files/2019-01/Capture1.PNG" alt="Net Interest Income and Swap Offer Rate(SOR)">
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 <div class="content-caption">Net Interest Income and Swap Offer Rate(SOR)</div>
The three bank stocks are amongst Singapore’s 10 biggest stocks by market capitalisation, in addition to being amongst South East Asia’s biggest. Combined the three stocks maintain a significant 9% weighting of the FTSE ASEAN All-Share Index, in addition to maintain the largest weights within this regional benchmark which is made up of 1122 stocks.
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DBS shares listed on the Stock Exchange of Malaysia and Singapore 50 years ago tomorrow, on 29 Nov 1968. DBS Group Holdings is now South East Asia’s largest capitalised primary- listed stock with a market capitalisation of S$61 billion. 
	 
	
Singapore’s three listed Banks, DBS, OCBC &amp; UOB have averaged long term annualised total returns of 10% over the past 30 years, and maintain a significant 9% weighting of the FTSE ASEAN All-Share Index (which has 1122 constituents). 
	 
	For their 9MFY18 (ending 30 Sep) DBS, OCBC &amp; UOB have averaged 25% YoY net profit growth. Combined, the three banks reported total income (pre allowances, expenses &amp; taxes) of S$24.2 billion for the 9MFY18, up from S$22.1 billion in 9MFY17.

South East Asia’s largest primary listed stock is DBS Group Holdings (“DBS”) with a market capitalisation of S$61 billion. Its capitalisation ranking is closely followed in size by Indonesia’s Bank Central Asia TBK PT which was founded in 1957, 11 years prior to DBS.

As the DBS 2017 Annual Report highlighted (click here) 2018 marks DBS’ 50th anniversary with the tracing of its roots back to 1968, when as the Development Bank of Singapore, it played a key role in financing the industrialisation of a newly independent nation.

Stock History

As highlighted in the Development Bank of Singapore’s Annual Report 1968, its shares received official quotation on the Stock Exchange of Malaysia and Singapore on 29 November 1968. Quotation was once common language for listing as prices were written and quoted on a chalkboard.

The Straits Times Market Correspondent on the morning of 30 November, noted that in its first day DBS was the most active stock with approximately half a million shares turned over. Market commentary (click here) noted the shares saw a modest premium which “was expected as the counter will hardly be expected to develop into a speculative one”. 

The Development Bank of Singapore’s first Annual Report (click here) also included an overview of its initial development financing and commercial banking operations, lines of credit, management, organisation and staff by its Chairman and President in 1969, Mr Hon Sui Sen.  

Mr Hon played a key role in the development of Singapore’s Financial Sector, and soon after heading the establishment of the Development Bank of Singapore, became Singapore’s Minister of Finance.

Consistent Long Term Returns &amp; Average Dividend Yield of 4.1%

Singapore’s listed Bank Sector consists of DBS, Oversea-Chinese Banking Corporation  ("OCBC") and United Overseas Bank ("UOB"). Together the three banks maintain a combined market capitalisation of S$149 billion.

As tabled below, there has been a degree of consistency in the past long term total returns of the three banks spanning 8.0% average annualised returns over the past five years, to 10.3% average annualised returns over the past 30 years.

      
    
    DBS, OCBC, UOB Annualized total returns
Total returns take into account price changes and assume dividends are reinvested. According to SGX StockFacts (click here)DBS currently maintains a dividend yield of 5.1%, OCBC maintains a dividend yield of 3.5% and UOB maintains a dividend yield of 3.8%.

For their 9MFY18 (ending 30 Sep) DBS, OCBC &amp; UOB have averaged 25% YoY net profit growth. Combined, the three banks reported total income (pre allowances, expenses &amp; taxes) of S$24.2 billion for the 9MFY18, up from S$22.1 billion in 9MFY17. For more details click here.

As illustrated below,  the combined quarterly net interest income for the three banks has gradually grown in recent years and been consistently above S$4.0 billion for each quarter since the end of 2014. This has coincided with gradual increases of local interest rates as represented by the 1-month Swap Offer Rate (“SOR”) and 3-month Singapore Interbank Offered Rate (“SIBOR“).

      
    
    Net Interest Income and Swap Offer Rate(SOR)
The three bank stocks are amongst Singapore’s 10 biggest stocks by market capitalisation, in addition to being amongst South East Asia’s biggest. Combined the three stocks maintain a significant 9% weighting of the FTSE ASEAN All-Share Index, in addition to maintain the largest weights within this regional benchmark which is made up of 1122 stocks.



ASEAN’s Biggest Primary-Listed Stock Began Trading 50 Years Ago Tomorrow