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.|
August Market Overview
The Singapore market ceded ground in August, which is traditionally the weakest month of the year, as US President Trump went on the war path with China, Turkey, Canada and EU over trade and other geopolitical matters. This drove down the STI by 3.2% back to near 2017 lows.
There was a wide dispersion in the performance of STI component stocks during the month, with sharp recovery in Yangzijiang(+8.5%), Venture Corp (+7%) and CapitaLand (+5.7%) following their creditable 2Q18 results, while Genting Singapore (-16%), Thai Bev (-15.2%) and Jardine Strategic (-8.8%) were the big losers.
Ytd, the STI is down 5.6% (Jul: -2.4%) with a negative total return of -2.5% (Jul: -0.3%), inclusive of dividends. On an equal weighted basis, the average loss of STI constituents was 7% (Jun: -5.2%), with 60% of 30 stocks still in the red.
Against this backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks also dipped 0.5ppt in Aug, giving a relatively narrower average ytd loss of -1.3%.
Growth List +2.9% YTD
Average total return of the Growth portfolio was eroded by continued weakness in APAC Realty following the property cooling measures in early July.
The performance was also dented by a slide in China Sunsine after management flagged that its selling prices may have peaked. This coupled with the slowing China economy and US tariffs could dampen demand for its products. Nevertheless, the rubber chemical producer remained the top performer in the portfolio.
Heavily battered tech stocks Venture Corp and Valuetronics recovered some of the losses suffered during the Jun/Jul sell-off, which appeared overdone.
Despite turning in robust FY18 earnings, we closed out our position in Health Management Int’l due to increasing competition from opening of new hospitals in Johor as well as anticipated start-up losses from newly acquired StarMed Specialist Centre.
Value List -4.8% YTD
Improved performance of the Value portfolio was supported by the strong rebound in Yangzijiangand extended gains from CapitaLand following its addition in July, while ST Engineering and Boustead remained relatively steady.
Yield List -4.5% YTD
The Yield portfolio was weighed by the cloudy outlook for UMS (slower wafer fab equipment growth) and Asian Pay TV (increased competition) although both still offer appealing dividend yields of 8% and 17.6% respectively.
Note: * Including dividends
** Priced in USD
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