|24 July 2017|
|STI at Two-Year High, 15% YTD Gain Led by Developers & Banks|
The Straits Times Index (STI) opened this week at 3307, some 426 points, or 14.8% above the 2016 end of year level of 2881. Last week the STI broke above the 3300 level for the first time in two years, with momentum taking the bellwether to an intra-week high of 3331. The STI maintains one of the region’s highest dividend yields, with 2017 year-to-date distributions boosting the STI’s total return to 16.6%.
Comparative Performances of the STI & Dow Jones
The comparative total return of the Dow Jones Industrial Average was 4.2% on a Singapore Dollar (“SGD”) basis. Taking the comparison back to April 2002, when SGX first listed for trading an Exchange Traded Fund (“ETF”) on the STI, the Singapore Index has also performed comparatively stronger than the Dow Jones benchmark. Since mid-April 2002, the SPDR® STI ETF has generated a 197% total return, compared to 125% for the SPDR® Dow Jones Industrial Average ETF Trust, on a SGD basis.
The recent year-to-date total return of the Indices and the annualised long term returns of the ETFs are detailed in the chart below.
Note: Above total returns include dividends
Source: SGX, Bloomberg (ETF performance data of SPDR® STI spans 17 April 2002 to 21 July 2017)
Both the above bellwethers are made up 30 stocks. While the Real Estate Sector, led by Developers, and Banks have been the STI’s strongest sectors in the year-to-date, the strongest sectors of the Dow Jones Industrial Average have been the Materials and the Consumer Discretionary Sectors. Yangzijiang Shipbuilding Holdings has been the STI’s best performing stock in the 2017 YTD, a turnaround from being the STI’s least performer in 2016.
More 2H17 outlooks on STI stocks will be available this week as SIA Engineering Co, Oversea-Chinese Banking Corp, Singapore Airlines, Ascendas REIT, Singapore Exchange, United Overseas Bank are scheduled to report their quarterly earnings.
A guide to the confirmed and expected dates of earning reports is tabled below. To see more details on each stock in SGX StockFacts, click on the stock name.
Source: SGX StockFacts & Bloomberg (data as of 21 July 2017). Note prices and price changes are in USD for Hutchison Port Hldgs Trust, Hongkong Land Hldgs and Jardine Matheson Hldgs.
The SGX also listed for trading another ETF on the STI, the Nikko AM STI ETF in 2009. Since its debut in late February 2009 this ETF generated a total return of 147%. Brokers and banks have also launched Regular Shares Saving plans on the STI ETFs.
The most recent STI-relevant portfolio products to launch are Daily Leverage Certificates (DLCs) on the highly correlated MSCI Singapore Net Total Return Index – click here for more information.
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