Singapore’s 10 highest yielding mid-cap stocks

My Gateway (92 x 92)With dividends, the FTSE ST Mid Cap Index has generated a marginal 0.1% gain in the 2014 year to-date. Dividends are an important aspect of the Index, with the current indicative yield at 4.5%. The FTSE ST Mid Cap Index is made up of 50 securities, of which 48 maintain an indicative dividend yield. This means including the 30 stocks of the Straits Times Index (STI), 78 of the 80 biggest index stocks in Singapore generate dividend income.

The ten highest indicative dividend yields of the FTSE ST Mid Cap Index constituents are represented by seven Real Estate Investment Trusts (REITs), two stapled trusts and one corporation. The table below details these constituents. The average indicative dividend yield of these 10 securities is 6.8% and average year-to-date total return of the 10 securities is 0.6%.

Short Name SGX Code Market Cap S$M Dvd Freq Dvd 12M Yld – Gross Dvd Ind Yld Total Return YTD Annualised Total Return:Y-3
MAPLETREE INDUST ME8U 2263 Quarterly 7.24 7.44 3.07 17.7
FAR EAST H TRUST Q5T 1368 Quarterly 7.28 7.33 -6.11 N/A
MAPLETREE LOG TR M44U 2530 Quarterly 6.95 7.11 -0.13 12.0
CDL HTRUST J85 1591 Semi-annual 6.73 6.82 2.93 0.3
KEPPEL REIT K71U 3283 Quarterly 5.03 6.71 0.88 6.1
VENTURE CORP LTD V03 2074 Annual 6.62 6.62 -1.69 -1.1
ASCENDAS REAL ES A17U 5189 Quarterly 5.12 6.56 -0.19 9.2
ASCOTT RESIDENCE A68U 1761 Semi-annual 6.62 6.40 -1.20 8.0
STARHILL GLOBAL P40U 1680 Quarterly 6.41 6.31 0.96 13.9
CAPITARETAIL AU8U 1112 Semi-annual 6.52 6.28 7.22 10.6

Source: Bloomberg (data as of 28 February 2014)

The two stapled securities that are included in the table above are CDL HTrust and Far East Hospitality Trust. Singapore Exchange (SGX) lists five stapled trusts – CDL Hospitality Trust (SGX: J85), Ascendas Hospitality Trust (SGX:A17U), Far East Hospitality Trust (SGX:Q5T), OUE Hospitality Trust (SGX: SK7) and Viva Industrial Trust (SGX: T8B). These five securities are referred to as stapled trusts as the one listed security is made up of two trusts – a REIT and a Business Trust. This ‘stapled’ structure can provide efficient tax treatment and asset development and management advantages as rules governing REITs and business trusts specify different thresholds for development and income producing assets.

As an example of a stapled structure – consider CDL Hospitality Trust, which is a stapled group comprising of CDL Hospitality Real Estate Investment Trust, a REIT, and CDL Hospitality Business Trust, a business trust. The REIT part of the stapled security was the first hotel real estate investment trust in Singapore, established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate which is primarily used for hospitality and/or hospitality-related purposes. The business trust part of the stapled security was established primarily as “a master lessee of last resort” and would become active if H-REIT was unable to appoint a master lessee for any of the Hotels in its portfolio at the expiry of the relevant master lease agreement or for a newly acquired hotel. Four of the five stapled securities in Singapore follow this model – that is they are used to hold hospitality assets, with a dormant business trust that kicks in when there is an issue with the master lessee.

Eight of the ten highest indicative dividend yields of the FTSE ST Mid Cap Index are the same as August last year – when the ten highest dividend yields were also noted in the highlight of the week.

The two securities that have since moved into the ten highest indicative yields of the Index are Starhill Global and Capita Retail Commercial Trust. Both these two REITs primarily invest in shopping malls. Property assets of Starhill Global include Wisma Atria and Ngee Ann City in Singapore, in addition to assets in Kuala Lumpur, Perth, Chengdu and Tokyo. Property assets of Capita Retail Commercial Trust include 10 shopping malls in China.

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