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Dividends boost Mid Cap Index YTD return to 1.5%

My Gateway (92 x 92)Last week the Straits Times Index (SGX:^STI) saw its year-to-date price performance return to positive territory. Taking into account dividend distributions, the STI has gained 0.5% since the end of 2013, while the FTSE ST Mid Cap Index outpaced that STI gain with a 1.5% total return over the period. Divided distributions made up two-thirds of the total return of the Mid Cap Index.

With a total market capitalisation of S$111.0 billion, the FTSE ST Mid Cap Index consists of 50 of the next largest capitalised stocks after the 30 stocks of the STI.

The ten largest capitalised stocks of the index consist of four REITs and two Real Estate Holding & Development stocks, while the remaining four belong to the other Industry Classification Benchmark (ICB) subsectors. Note this is based on full market capitalisation, rather than by the free float of the stock – the latter method is used to weight stocks in index. The ten largest stocks by full market capitalisation are detailed in the table below.

Short Name SGX Code Mkt Cap S$B Total Return YTD % Px Chg Pct YTD % Total Return 12M % Dvd Ind Yld %
ASCENDAS REIT A17U 5.4 4.0 2.3 -9.1 6.3
KEPPEL LAND LTD K17 5.2 0.3 0.3 -12.4 3.9
UOL GROUP LTD U14 4.8 0.5 0.5 -9.0 2.4
CAPITACOMMERCIAL C61U 4.3 6.1 3.1 -0.3 5.6
SUNTEC REIT T82U 4.1 10.9 7.8 -1.4 5.1*
YANGZIJIANG SHIP BS6 4.1 -9.3 -9.3 17.0 4.7
FIRST RESOURCES EB5 3.7 10.8 10.8 31.5 1.7
SATS LTD S58 3.4 -5.9 -5.9 4.8 3.6
KEPPEL REIT K71U 3.2 -1.7 -3.4 -11.3 6.9
M1 LTD B2F 3.2 5.5 5.5 22.3 4.0

Source: Bloomberg (Data as of 28 March 2014), *note based on first of two pro rata payments only.

The average indicative dividend yield of the ten stocks detailed above is 4.4%. A number of stocks that make up the FTSE ST Mid Cap Index also make up the FTSE Singapore Index, which according to the latest FTSE Asia Pacific Index report, maintained the highest dividend yield across Asia.

The 10 largest capitalised constitutes of the Mid Cap Index

 As noted above, the ten largest capitalised constituents of the Index include four REITs. The largest capitalised of the four and largest capitalised stock of the Mid Cap Index is Ascendas REIT. The trust owns a portfolio of properties in Singapore comprising Business & Science Parks, Hi-Tech Industrials, Light Industrials and Logistics & Distribution Centres. The indicative divided yield of the trust is currently 6.3% and dividends are distributed on a quarterly basis.

CapitaCommercial Trust (SGX:C61U) is a Singapore-based unit trust established with the objective of owning and investing in real estate and real estate-related assets for commercial purposes. The indicative divided yield of CCT is currently 5.6% and dividends are distributed on a semi-annual basis.

Suntec REIT (SGX:T82U) owns income-producing real estate that is primarily used for retail and/or office purposes. The most recent dividend distribution by Suntec REIT was an advanced distribution for the pro rata period of 1 January 2014 to 26 March 2014 which was pursuant to an issue of new units. Based on the first of two pro rata payments only, the indicative dividend yield of Suntec REIT is 5.1%. Based on the four quarterly payments prior to the recent pro rata payment the indicative dividend yield of Suntec REIT is 5.6%.

Keppel REIT’s (SGX:K71U) objective is to generate stable income and long-term growth for Unit holders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and across Asia. Keppel REIT also distributes dividends on a quarterly basis and currently maintains an indicative yield of 6.9%.

The remaining six largest capitalised companies of that make up the ten largest constituents of the FTSE ST Mid Cap Index are made up of a diversified stream of businesses with just Real Estate Holding & Development maintaining multiple representations.

Keppel Land (SGX:K17) is the property arm of the Keppel Group, one of Singapore’s largest multinational groups with key businesses in offshore and marine, infrastructure, and property. UOL Group develops commercial and residential properties in prime locations both in Singapore and overseas. It also has interests in hotel development and management, retail and investment holding. The two real estate developers maintain similar market capitalisation around S$5 billion and distribute dividends on an annual basis.

Yangzijiang Shipbuilding Holdings (SGX:BS6) produces a range of commercial vessels, including mini bulk carriers, bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels and lifting vessels. YSH maintains an indicative dividend yield of 4.6% and also distributes on annual basis.

First Resources’ primary business activities are cultivating oil palms, harvesting the fresh fruit bunches from those trees and processing crude palm oil and palm kernel which it sells in Indonesia and internationally. Singapore Airport Terminal Services (SATs) is a provider of Airport Services and Food Solutions. Today, its network of ground handling and inflight catering operations spans nearly 40 airports in the Asia Pacific region. First Resources and SATs both distribute dividends on a semi-annual basis.

Finally, M1’s principal activities include the provision of mobile telecommunication services, international call services, mobile retail sales, after-sales support, customer services, research and development of mobile telecommunication products and services and investment holding function. M1 maintains an indicative dividend yield of 4.0% and distributes on a semi-annual basis.

Other Highlights of the FTSE ST Mid Cap Index

 Effective Monday 21 March, Rowsley, OUE Hospitality Trust and Asian Pay Television Trust joined the FTSE ST Mid Cap Index. The inclusions replaced Mandarin Oriental International, Fortune REIT and Hotel Properties.

Among the 50 constituents of the FTSE ST Mid Cap Index, the five most underperforming stocks in the 2014 year to date, in terms of total return, have been Rowsley (-16.9%), Yanlord Land Group (-12.7%), SMRT Corp (-12.1%), Neptune Orient Lines (-11.1%) and Yangzijiang Shipbuilding Holdings (-9.3%).

The five best performing stocks of the FTSE ST Mid Cap Index in the 2014 year to date, also in terms of total return were Oxley Holdings (+25.4%), Vard Holdings (+22.7%), United Engineers (+15.3%), Osim International (+12.6%) and Indofood Agri Resources (+12.4%).

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