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

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On 24-March, S-REITs lodged one of their five strongest sessions since their inception in 2002, with an 8% gain, after trading at eight years lows on Monday. The iEdge S-REIT Index has declined 28% in the 2020 YTD, following its 28% total return in 2019. 
	 </li>
	<li>
Mortgage REITs (mREITs), which are not traded in Singapore, have led the recent declines in the global REIT market. The FTSE Nareit Mortgage REITs Index has declined 60% in the 2020 YTD, with its 30-day volatility soaring to 118%. 
	 </li>
	<li>Three S-REITs that were recipient to the highest net institutional inflow, proportionate to market value on 24 March, were Manulife US REIT, MIT &amp; MLT. The trio averaged 16.2% price gains on 24 March, bringing their average 2020 YTD decline to 20%.  </li>
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Gains by S-REIT Indices on 24 March indicate the session was amongst the five strongest sessions on record for S-REITS since their inception in 2002. The Straits Times Index (STI) also lodged its strongest gains since 2 April 2009. The session was the strongest day on record for the iEdge S-REIT Index since its inception date of 30 Sep 2010, with its day gains of 8.0% that followed on from the Index trading at February 2012 lows on 23 March.

REIT Volatility Led by US Mortgage REITs

Mortgage REITs (mREITs) differ from S-REITs in that they provide financing for income-producing real estate by purchasing or originating mortgage loans and mortgage-backed securities. According to Nareit, the major difference between mREITs and the standard REIT model is that mREITs don’t own real estate directly, instead they finance real estate and earn income from the interest on these investments. Nareit maintain that mREITs include all tax-qualified REITs with more than 50% of total assets invested in mortgage loans or mortgage-backed securities, secured by interests in real property.

Singapore does not currently list mREITs. 

mREITs have led the recent declines in the global REIT market. Amongst the economic uncertainties that stem from COVID-19, have been concerns on the ability for US Mortgage REITs to service their leverage and restructure loan obligations. This has been a key catalyst for the 60% year-to-date decline of the FTSE Nareit Mortgage REITs Index. The spread between relevant US mortgages (30Y Fannie Mae) and US Treasury Notes (5s/10s) blew out to 2.04% during the 20 March session (from 1.12% at the end of Feb). Following the Federal Reserve’s unlimited Quantitative Announcement on 23 March, the key spread had returned to 1.12% as of last night’s NY close.   

The 60% decline of the FTSE Nareit Mortgage REITs Index has seen the 30-day volatility of the Index soar to 118%. While the FTSE NAREIT Retail Property Sector Index has seen more 30-day volatility, it has seen less than three-quarters the decline of the FTSE Nareit Mortgage REITs Index. 

By comparison, the iEdge S-REIT Index has declined 28% in the 2020 year through to 24 March, following its 28% total return in 2019. Median 30-day volatility for the global REIT market has surged from 18% at the end of 2019, and 17% one year ago, to 89% at present. Global REITs have generated a median decline of 30% for the year through the 2020 year through to 24 March, in-line with the FTSE Nareit Equity REITS Index, FTSE EPRA/NAREIT Developed Index and FTSE EPRA/NAREIT Emerging Index. 

Actively Traded Stocks Recipient to Most Net Institutional Inflows on 24 March 

In Singapore, on 24 March, a trio of heavily traded REITs saw net inflows from both Institutional Investors (excluding market making and liquidity provider activity) and Retail Investors – they were Ascendas REIT, CapitaLand Mall Trust and CapitaLand Commercial Trust. Actively traded companies that were also recipient to both net institutional inflow and outflow were Singapore Tech Engineering, Hong Kong Land Holdings and Jardine Strategic Holdings.

Another three REITs were also amongst the 10 stocks (with daily turnover above S$2 million) that were recipient to the highest net institutional inflow proportionate to their market value on 24 March.  For instance, Manulife US REIT saw S$1.84 million in net institutional inflow on 24 March, which represented as much as 0.12% of its S$1.596 billion market capitalisation. The three of REITs, which also included Mapletree Industrial Trust and Mapletree Logisitics Trust, averaged 16.2% price gains on 24 March, bringing their average 2020 year-to-date decline to 20.1%.

The 10 stocks (with daily turnover above S$2 million) that were recipient to the highest net institutional inflow proportionate to their market value on 24 March are tabled below.

<table class="table table-striped"><tbody>
<tr>
<td>
			10 Stocks with at least S$2M Daily Turnover that saw greatest Net Insti Inflow on 24 March Proportionate to Market Cap 
			</td>
			<td>
			Code
			</td>
			<td>
			Average Daily Turnover in 2020 YTD S$M
			</td>
			<td>
			Mkt Cap S$ Bn
			</td>
			<td>
			Mar 24 Price Change %
			</td>
			<td>
			Net Insti Flow 24 March 2020 

			S$M 
			</td>
			<td>
			Net Insti Flow 24 March 2020 / Mkt Cap
			</td>
			<td>
			Net Insti Flow 2020 YTD  

			S$M
			</td>
			<td>
			YTD Total Return %
			</td>
		</tr>
<tr>
<td>
			VENTURE CORP
			</td>
			<td>
			V03
			</td>
			<td>
			$26
			</td>
			<td>
			$3,960
			</td>
			<td>
			9.6
			</td>
			<td>
			9.09
			</td>
			<td>
			0.23%
			</td>
			<td>
			89.45
			</td>
			<td>
			-15.3
			</td>
		</tr>
<tr>
<td>
			SINGAPORE AIRLINES
			</td>
			<td>
			C6L
			</td>
			<td>
			$21
			</td>
			<td>
			$6,980
			</td>
			<td>
			9.9
			</td>
			<td>
			11.18
			</td>
			<td>
			0.16%
			</td>
			<td>
			-100.08
			</td>
			<td>
			-34.8
			</td>
		</tr>
<tr>
<td>
			MANULIFE US REAL ESTATE INV
			</td>
			<td>
			BTOU
			</td>
			<td>
			$9
			</td>
			<td>
			$1,596
			</td>
			<td>
			25.3
			</td>
			<td>
			1.84
			</td>
			<td>
			0.12%
			</td>
			<td>
			4.02
			</td>
			<td>
			-23.5
			</td>
		</tr>
<tr>
<td>
			SINGAPORE EXCHANGE
			</td>
			<td>
			S68
			</td>
			<td>
			$39
			</td>
			<td>
			$9,192
			</td>
			<td>
			5.8
			</td>
			<td>
			10.57
			</td>
			<td>
			0.11%
			</td>
			<td>
			167.85
			</td>
			<td>
			-2.2
			</td>
		</tr>
<tr>
<td>
			SHENG SIONG GROUP
			</td>
			<td>
			OV8
			</td>
			<td>
			$3
			</td>
			<td>
			$1,654
			</td>
			<td>
			6.8
			</td>
			<td>
			1.78
			</td>
			<td>
			0.11%
			</td>
			<td>
			4.50
			</td>
			<td>
			-11.3
			</td>
		</tr>
<tr>
<td>
			MAPLETREE INDUSTRIAL TRUST
			</td>
			<td>
			ME8U
			</td>
			<td>
			$26
			</td>
			<td>
			$4,710
			</td>
			<td>
			12.0
			</td>
			<td>
			3.96
			</td>
			<td>
			0.08%
			</td>
			<td>
			47.75
			</td>
			<td>
			-16.7
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORP
			</td>
			<td>
			BN4
			</td>
			<td>
			$27
			</td>
			<td>
			$9,551
			</td>
			<td>
			4.6
			</td>
			<td>
			7.56
			</td>
			<td>
			0.08%
			</td>
			<td>
			-6.27
			</td>
			<td>
			-22.6
			</td>
		</tr>
<tr>
<td>
			MAPLETREE LOGISTICS TRUST
			</td>
			<td>
			M44U
			</td>
			<td>
			$33
			</td>
			<td>
			$5,244
			</td>
			<td>
			11.3
			</td>
			<td>
			3.49
			</td>
			<td>
			0.07%
			</td>
			<td>
			36.34
			</td>
			<td>
			-20.1
			</td>
		</tr>
<tr>
<td>
			GOLDEN AGRI-RESOURCES
			</td>
			<td>
			E5H
			</td>
			<td>
			$8
			</td>
			<td>
			$1,752
			</td>
			<td>
			7.0
			</td>
			<td>
			1.15
			</td>
			<td>
			0.07%
			</td>
			<td>
			-5.63
			</td>
			<td>
			-41.3
			</td>
		</tr>
<tr>
<td>
			UOL GROUP
			</td>
			<td>
			U14
			</td>
			<td>
			$14
			</td>
			<td>
			$5,568
			</td>
			<td>
			7.1
			</td>
			<td>
			3.60
			</td>
			<td>
			0.06%
			</td>
			<td>
			21.43
			</td>
			<td>
			-20.7
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			9.9
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			-20.9
			</td>
		</tr>
</tbody></table>
 Note Net Institutional Inflow excludes Market Making and Liquidity Provider Flows

Source: SGX, Bloomberg, Thomson Reuters (Data as of 24 March 2020) 
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On 24-March, S-REITs lodged one of their five strongest sessions since their inception in 2002, with an 8% gain, after trading at eight years lows on Monday. The iEdge S-REIT Index has declined 28% in the 2020 YTD, following its 28% total return in 2019. 
	 
	
Mortgage REITs (mREITs), which are not traded in Singapore, have led the recent declines in the global REIT market. The FTSE Nareit Mortgage REITs Index has declined 60% in the 2020 YTD, with its 30-day volatility soaring to 118%.  
	 
	Three S-REITs that were recipient to the highest net institutional inflow, proportionate to market value on 24 March, were Manulife US REIT, MIT &amp; MLT. The trio averaged 16.2% price gains on 24 March, bringing their average 2020 YTD decline to 20%.  

 

Gains by S-REIT Indices on 24 March indicate the session was amongst the five strongest sessions on record for S-REITS since their inception in 2002. The Straits Times Index (STI) also lodged its strongest gains since 2 April 2009. The session was the strongest day on record for the iEdge S-REIT Index since its inception date of 30 Sep 2010, with its day gains of 8.0% that followed on from the Index trading at February 2012 lows on 23 March.

REIT Volatility Led by US Mortgage REITs

Mortgage REITs (mREITs) differ from S-REITs in that they provide financing for income-producing real estate by purchasing or originating mortgage loans and mortgage-backed securities. According to Nareit, the major difference between mREITs and the standard REIT model is that mREITs don’t own real estate directly, instead they finance real estate and earn income from the interest on these investments. Nareit maintain that mREITs include all tax-qualified REITs with more than 50% of total assets invested in mortgage loans or mortgage-backed securities, secured by interests in real property.

Singapore does not currently list mREITs. 

mREITs have led the recent declines in the global REIT market. Amongst the economic uncertainties that stem from COVID-19, have been concerns on the ability for US Mortgage REITs to service their leverage and restructure loan obligations. This has been a key catalyst for the 60% year-to-date decline of the FTSE Nareit Mortgage REITs Index. The spread between relevant US mortgages (30Y Fannie Mae) and US Treasury Notes (5s/10s) blew out to 2.04% during the 20 March session (from 1.12% at the end of Feb). Following the Federal Reserve’s unlimited Quantitative Announcement on 23 March, the key spread had returned to 1.12% as of last night’s NY close.   

The 60% decline of the FTSE Nareit Mortgage REITs Index has seen the 30-day volatility of the Index soar to 118%. While the FTSE NAREIT Retail Property Sector Index has seen more 30-day volatility, it has seen less than three-quarters the decline of the FTSE Nareit Mortgage REITs Index. 

By comparison, the iEdge S-REIT Index has declined 28% in the 2020 year through to 24 March, following its 28% total return in 2019. Median 30-day volatility for the global REIT market has surged from 18% at the end of 2019, and 17% one year ago, to 89% at present. Global REITs have generated a median decline of 30% for the year through the 2020 year through to 24 March, in-line with the FTSE Nareit Equity REITS Index, FTSE EPRA/NAREIT Developed Index and FTSE EPRA/NAREIT Emerging Index. 

Actively Traded Stocks Recipient to Most Net Institutional Inflows on 24 March 

In Singapore, on 24 March, a trio of heavily traded REITs saw net inflows from both Institutional Investors (excluding market making and liquidity provider activity) and Retail Investors – they were Ascendas REIT, CapitaLand Mall Trust and CapitaLand Commercial Trust. Actively traded companies that were also recipient to both net institutional inflow and outflow were Singapore Tech Engineering, Hong Kong Land Holdings and Jardine Strategic Holdings.

Another three REITs were also amongst the 10 stocks (with daily turnover above S$2 million) that were recipient to the highest net institutional inflow proportionate to their market value on 24 March.  For instance, Manulife US REIT saw S$1.84 million in net institutional inflow on 24 March, which represented as much as 0.12% of its S$1.596 billion market capitalisation. The three of REITs, which also included Mapletree Industrial Trust and Mapletree Logisitics Trust, averaged 16.2% price gains on 24 March, bringing their average 2020 year-to-date decline to 20.1%.

The 10 stocks (with daily turnover above S$2 million) that were recipient to the highest net institutional inflow proportionate to their market value on 24 March are tabled below.




			10 Stocks with at least S$2M Daily Turnover that saw greatest Net Insti Inflow on 24 March Proportionate to Market Cap 
			
			
			Code
			
			
			Average Daily Turnover in 2020 YTD S$M
			
			
			Mkt Cap S$ Bn
			
			
			Mar 24 Price Change %
			
			
			Net Insti Flow 24 March 2020 

			S$M 
			
			
			Net Insti Flow 24 March 2020 / Mkt Cap
			
			
			Net Insti Flow 2020 YTD  

			S$M
			
			
			YTD Total Return %
			
		


			VENTURE CORP
			
			
			V03
			
			
			$26
			
			
			$3,960
			
			
			9.6
			
			
			9.09
			
			
			0.23%
			
			
			89.45
			
			
			-15.3
			
		


			SINGAPORE AIRLINES
			
			
			C6L
			
			
			$21
			
			
			$6,980
			
			
			9.9
			
			
			11.18
			
			
			0.16%
			
			
			-100.08
			
			
			-34.8
			
		


			MANULIFE US REAL ESTATE INV
			
			
			BTOU
			
			
			$9
			
			
			$1,596
			
			
			25.3
			
			
			1.84
			
			
			0.12%
			
			
			4.02
			
			
			-23.5
			
		


			SINGAPORE EXCHANGE
			
			
			S68
			
			
			$39
			
			
			$9,192
			
			
			5.8
			
			
			10.57
			
			
			0.11%
			
			
			167.85
			
			
			-2.2
			
		


			SHENG SIONG GROUP
			
			
			OV8
			
			
			$3
			
			
			$1,654
			
			
			6.8
			
			
			1.78
			
			
			0.11%
			
			
			4.50
			
			
			-11.3
			
		


			MAPLETREE INDUSTRIAL TRUST
			
			
			ME8U
			
			
			$26
			
			
			$4,710
			
			
			12.0
			
			
			3.96
			
			
			0.08%
			
			
			47.75
			
			
			-16.7
			
		


			KEPPEL CORP
			
			
			BN4
			
			
			$27
			
			
			$9,551
			
			
			4.6
			
			
			7.56
			
			
			0.08%
			
			
			-6.27
			
			
			-22.6
			
		


			MAPLETREE LOGISTICS TRUST
			
			
			M44U
			
			
			$33
			
			
			$5,244
			
			
			11.3
			
			
			3.49
			
			
			0.07%
			
			
			36.34
			
			
			-20.1
			
		


			GOLDEN AGRI-RESOURCES
			
			
			E5H
			
			
			$8
			
			
			$1,752
			
			
			7.0
			
			
			1.15
			
			
			0.07%
			
			
			-5.63
			
			
			-41.3
			
		


			UOL GROUP
			
			
			U14
			
			
			$14
			
			
			$5,568
			
			
			7.1
			
			
			3.60
			
			
			0.06%
			
			
			21.43
			
			
			-20.7
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			9.9
			
			
			 
			
			
			 
			
			
			 
			
			
			-20.9
			
		

 Note Net Institutional Inflow excludes Market Making and Liquidity Provider Flows

Source: SGX, Bloomberg, Thomson Reuters (Data as of 24 March 2020) 



S-REITs Lodge One of the Strongest Sessions on Record  

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S-REITs Lodge One of the Strongest Sessions on Record