Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
October Market Overview
Followers of seasonality need no reminder of past October crashes (1987, 1997/98, 2008) as investors ran for cover and global equity markets took a heavy bashing last month from several headwinds, including the fallout from US-China trade war, peak economic and earnings growth concerns, China slowdown and Fed tightening.
Among the STI component stocks, it was virtually a sea of red with GentingS’pore (-13.7%), Venture Corp (-11.3%), DBS (-10.6%), Keppel Corp (-10.3%) and UOB (-10.2%) all taking big hits. Only two counters, Golden Agri (+1.4%) and Dairy Farm (+0.3%), managed to buck the trend.
Ytd, the STI slumped 11.3% (Sep: -4.3%) and suffered a total loss of 8.2% (Sep: -1%), even after including dividends. On an equal weighted basis, the average decline of STI constituents was 11% (Sep -5.3%), with only 6 out of 30 stocks generating positive returns.
Against this bleak backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks was not spared, tumbling 3.8ppt in Oct to yield an average ytd loss of 4.7%. The only consolation is that it still managed to outperform the STI by 6.3ppt.
Growth List -3.5% YTD
The average total return of the Growth portfolio turned negative for the first time this year as technology stocks, Venture Corp and Valuetronics were further dragged down by the tech selloff in US and worries over supply chain disruptions.
APAC Realty fell to an all-time low post property cooling measures in early July but the 42% share price plunge appears overdone as the residential market shows little signs of collapsing.
Both iFAST and China Sunsine held onto their gains.
Value List -4.6% YTD
The Value portfolio was eroded by the sharp reversal in GentingS’pore, which fell in tandem with its Macau peers, as investors grappled with worries over the sustainability of VIP growth amid fears of China’s consumption slowdown.
Yield List -7.0% YTD
The Yield portfolio slid 3.8ppt last month as Manulife US REIT (-9.5pppt) came under pressure on concerns that a US tax revision could cut its DPU by as much as 30%. However, it is premature to take action on the position as management has argued that its Barbados structure put in place since start of the year is compliant and the US tax authorities has not ruled on the matter yet.
Note: * Including dividends
** Priced in USD
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