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

Equity Bottom-Up

CNMC Goldmine Holdings / Equity Bottom-Up

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Gold spot prices has been on the move YTD, with a 7.9% price gains and is now at US$1,974/oz level. While gold is typically seen as an inflation hedge, rising rates/yields may potentially increase the opportunity cost of holding this asset. 
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Gold prices have risen in 6 out of the 8 last rate hike cycles in the past 50 years. The period of declines were observed in 1983-84 and 1987-89 when low-to-mid double digit declines were observed. 
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	<li>There are two SGX gold mining plays – CNMC Goldmine and Wilton Resources. The duo posted YTD total returns of +22.0% and +33.3% respectively, outperforming STI’s +7.5%. Investors seeking exposure to gold can also look at SPDR Gold Shares ETF (O87/GSD), one of the most actively traded ETF on SGX (top traded ETF for March and April 2022)</li>
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Gold spot price has seen a price gain of 7.9% in the year-to-date at US$1,974/oz. While this is a 4.2% retreat from the last peak in early March this year, the commodity has seen a price gain of 16.7% since the last trough in end March 2021. 
Taking a look at the past major US rate hike cycles (green highlights in chart below) in the past 50 years, gold prices have been observed to rise in 6 out of the past 8 cycles. The only periods of declines were observed in 1983-84 and 1987-89 rate cycles when there were low-to-mid double digit declines. 
While gold has typically been seen as an inflation hedge, rising rates and yields may potentially increase the opportunity cost of holding the commodity.
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 <img src='https://api2.sgx.com/sites/default/files/2022-04/Capture%202.PNG' alt='Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years' />
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 <div class='content-caption'>Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years</div>
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Source: Bloomberg, Refinitiv. As of 14 April 2022. Gold prices based on Refinitiv Gold Spot prices. 
SGX gold mining plays – CNMC Goldmine and Wilton Resources are both engaged in different stages of the gold exploration, development and production cycle. The two plays have seen an average total returns of +22.0% and +33.3% respectively, compared to the STI’s +7.5% in this YTD through to 14 April. CNMC Goldmine – Principally engaged in exploration, mining of gold and processing of mined ore into gold dores. Currently focused on development of its flagship project – the Sokor Gold Field Project located in State of Kelantan, Malaysia. Gold production commenced in July 2010 and since successfully produced &gt;210k ounces (6 metric tonnes) of fine gold. Wilton Resources  – Engaged in the exploration and mining of gold, and production of gold dore in Indonesia. The Group’s Cinemas Gold Project in West Java, Indonesia covers total area of 3,078.5 hectares and estimated to contain c. 2,360 kt of ore reserves (according to its latest Independent Qualified Person’s Report). The Group has resumed the construction of its 500 tonnes per day flotation and carbon-in-leach processing plant. Besides seeking to develop gold deposits, the Group is exploring potential of other mineralized areas of the Ciemas Gold Project to build sustainable value for its stakeholders. 
Apart from the two mining plays, investors can also seek exposure to Gold via the SPDR Gold Shares ETF (stock codes: O87 / GSD), which is amongst the top traded ETF by turnover on SGX. The price of gold bullion maintains low correlations to most other asset classes. The World Gold Council maintain that that including assets with a low correlation to each other assists portfolio managers to reduce overall portfolio risk. 
SPDR Gold Shares ETF saw trading turnover hit a 20-month high in the month of March 2022, and was the top traded ETF in 2 consecutive months (March and April). Globally, the ETF has seen an inflow of c. US$7.7 billion, as of 14 April 2022. 
Following the microstructure changes implemented in January this year, investors can trade the SPDR Gold ETF in single unit, with per trade value at around S$249 (as of 14 April) when trading via its SGD counter (stock code: GSD)

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock Name 
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			2022 YTD total returns %
			</td>
			<td>
			Instis inflows YTD S$M
			</td>
		</tr>
<tr>
<td>
			CNMC Goldmine
			</td>
			<td>
			5TP
			</td>
			<td>
			101
			</td>
			<td>
			22.0
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			Wilton Resources
			</td>
			<td>
			5F7
			</td>
			<td>
			52
			</td>
			<td>
			33.3
			</td>
			<td>
			-0.4
			</td>
		</tr>
<tr>
<td>
			SPDR Gold Shares ETF
			</td>
			<td>
			O87/GSD
			</td>
			<td>
			94,134*
			</td>
			<td>
			9.5**
			</td>
			<td>
			-64.9
			</td>
		</tr>
</tbody></table>
 Source: SGX, Refinitiv, Bloomberg (Data as of 14 April 2022)

Note: Total returns for CNMC Goldmine and Wilton Resources in S$

*Refers to total net assets in S$

**USD total returns
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Gold spot prices has been on the move YTD, with a 7.9% price gains and is now at US$1,974/oz level. While gold is typically seen as an inflation hedge, rising rates/yields may potentially increase the opportunity cost of holding this asset. 
	 
	
Gold prices have risen in 6 out of the 8 last rate hike cycles in the past 50 years. The period of declines were observed in 1983-84 and 1987-89 when low-to-mid double digit declines were observed. 
	 
	There are two SGX gold mining plays – CNMC Goldmine and Wilton Resources. The duo posted YTD total returns of +22.0% and +33.3% respectively, outperforming STI’s +7.5%. Investors seeking exposure to gold can also look at SPDR Gold Shares ETF (O87/GSD), one of the most actively traded ETF on SGX (top traded ETF for March and April 2022)

 

Gold spot price has seen a price gain of 7.9% in the year-to-date at US$1,974/oz. While this is a 4.2% retreat from the last peak in early March this year, the commodity has seen a price gain of 16.7% since the last trough in end March 2021.  
Taking a look at the past major US rate hike cycles (green highlights in chart below) in the past 50 years, gold prices have been observed to rise in 6 out of the past 8 cycles. The only periods of declines were observed in 1983-84 and 1987-89 rate cycles when there were low-to-mid double digit declines.  
While gold has typically been seen as an inflation hedge, rising rates and yields may potentially increase the opportunity cost of holding the commodity.



      
    
    Gold prices have risen in 6 out of the past 8 rate hike cycles in the past 50 years


Source: Bloomberg, Refinitiv. As of 14 April 2022. Gold prices based on Refinitiv Gold Spot prices.  
SGX gold mining plays – CNMC Goldmine and Wilton Resources are both engaged in different stages of the gold exploration, development and production cycle. The two plays have seen an average total returns of +22.0% and +33.3% respectively, compared to the STI’s +7.5% in this YTD through to 14 April.  CNMC Goldmine – Principally engaged in exploration, mining of gold and processing of mined ore into gold dores. Currently focused on development of its flagship project – the Sokor Gold Field Project located in State of Kelantan, Malaysia. Gold production commenced in July 2010 and since successfully produced &gt;210k ounces (6 metric tonnes) of fine gold.  Wilton Resources  – Engaged in the exploration and mining of gold, and production of gold dore in Indonesia. The Group’s Cinemas Gold Project in West Java, Indonesia covers total area of 3,078.5 hectares and estimated to contain c. 2,360 kt of ore reserves (according to its latest Independent Qualified Person’s Report). The Group has resumed the construction of its 500 tonnes per day flotation and carbon-in-leach processing plant. Besides seeking to develop gold deposits, the Group is exploring potential of other mineralized areas of the Ciemas Gold Project to build sustainable value for its stakeholders.  
Apart from the two mining plays, investors can also seek exposure to Gold via the SPDR Gold Shares ETF (stock codes: O87 / GSD), which is amongst the top traded ETF by turnover on SGX. The price of gold bullion maintains low correlations to most other asset classes. The World Gold Council maintain that that including assets with a low correlation to each other assists portfolio managers to reduce overall portfolio risk.  
SPDR Gold Shares ETF saw trading turnover hit a 20-month high in the month of March 2022, and was the top traded ETF in 2 consecutive months (March and April). Globally, the ETF has seen an inflow of c. US$7.7 billion, as of 14 April 2022.  
Following the microstructure changes implemented in January this year, investors can trade the SPDR Gold ETF in single unit, with per trade value at around S$249 (as of 14 April) when trading via its SGD counter (stock code: GSD)




			Stock Name 
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			2022 YTD total returns %
			
			
			Instis inflows YTD S$M
			
		


			CNMC Goldmine
			
			
			5TP
			
			
			101
			
			
			22.0
			
			
			0.6
			
		


			Wilton Resources
			
			
			5F7
			
			
			52
			
			
			33.3
			
			
			-0.4
			
		


			SPDR Gold Shares ETF
			
			
			O87/GSD
			
			
			94,134*
			
			
			9.5**
			
			
			-64.9
			
		

 Source: SGX, Refinitiv, Bloomberg (Data as of 14 April 2022)

Note: Total returns for CNMC Goldmine and Wilton Resources in S$

*Refers to total net assets in S$

**USD total returns



How has Gold Performed in Rate Hike Cycles Historically?