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Singapore’s Most Transparent Companies

Ser Jing - There's More Than Meets the Eye With Steady Dividends (pic)Take a look at the five most transparent companies in Singapore, as deemed by the 2013 Governance & Transparency Index (GTI).

In top spot is Singapore Exchange (SGX: S68), which overtook SingTel (SGX: Z74) for the first time since the index was launched in 2009. Marine titan Keppel Corp (SGX: BN4), with a respectable score of 107, is in third place. The shipbuilder is barely a whisker ahead of Straits Times Index stalwart Sembcorp Industries (SGX: U96) and mid-cap property company Keppel Land (SGX: K17).

Company GTI   Score
Singapore   Exchange 113
SingTel 111
Keppel   Corp 107
Sembcorp   Industries 106
Keppel   Land 104

The Governance & Transparency Index ranks every Singapore-listed company according to a number of key criteria. These include the levels of corporate governance and disclosure standards. Companies get extra brownie points if they have a fully independent audit committee and are able to release timely results. To be included in the rankings, a company must also have reported full-year results before 1 June.

Now take a look at the Total Shareholder Returns of the five companies over the last ten years. The return included both the appreciation in the share price and reinvested dividends.

Company Annual   Return
Singapore   Exchange 27%
Keppel   Corp 23%
Sembcorp   Industries 19%
Keppel   Land 18%
SingTel 16%

With the exception of SingTel, the rankings of the five most transparent companies are closely aligned with the total return that investors have reaped from the five companies. That might be a coincidence but it might also be a reflection of the level of investor confidence in the companies.

Transparency won’t turn an unprofitable company into a profitable one but it can turn a profitable company into a better-governed one. As investors we should be on the lookout for companies with transparent accounts and clear governance that we can count on for the long-term.

Looking at graphs, charts and histograms won’t tell you much about how a business is run. Looking through the Governance & Transparency Index might be a much better place to start.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.