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Mid Cap Index generated 6.9% total return over past 7 weeks

My Gateway (92 x 92)Since the end of the first quarter, the FTSE ST Mid Cap Index (SGX: FSTM) has gained 5.4% by price with dividend distributions boosting the total return to 6.9%. A total of 44 of the 50 Mid Cap Index constituents generated a positive return over the period. The Mid Cap Index’s 6.9% total return in the quarter to date was nestled between the performances of the FTSE ST Real Estate Investment Trust (REIT) Index at 7.6% and the Straits Times Index (SGX:^STI) at 3.6%.

While the 50 constituents of the FTSE ST Mid Cap Index include the five stocks of the STI Reserve List, they also include 18 trusts that are part of the FTSE REIT Index. Hence, REITs and stapled property trusts have the largest sectorial impact on the Mid Cap Index. These 18 related constituents made up as much as 46% of the free float capitalisation of the Mid Cap Index as of the end of April. The impact of the REITs and property trusts on the Mid Cap Index has increased over time. Consider that in October 2011, where 14 REITs and stapled property trusts made up 36% of the free float capitalisation of the Mid Cap Index.

Currently, these 18 REITs/stapled property trusts generally consist of the next largest capitalised REITs or property trusts after STI constituent CapitaMall Trust (C38U).  The recent similar price performances of the FTSE ST Mid Cap Index and the FTSE ST REIT Index in the year-to-date are illustrated in the table below.

SGX may 21

Source: Bloomberg (data as of 16 May 2014)

The FTSE ST Mid Cap Index is currently made up of 16 different ICB sectors. Hence, after the ICB-defined REIT sector, the remaining 32 constituents of the FTSE ST Mid Cap Index represent as many as 15 sectors as defined by the Industry Classification Benchmark (ICB).

The ten stocks with the largest weighting in the FTSE ST Mid Cap Index accounted for a total of 45% of the Index weighting as of the end of April. These ten stocks are detailed in the table below. Note just three of the ten stocks are REITs, while four stocks represent industrial sectors, two stocks represent Real Estate Investment & Services and one stock represents Oil & Gas. The average total return of these 10 stocks in the quarter to date was 7.1%.

Name SGX Code Mkt Cap S$M – Price Return QTD Total Return  QTD % Total Return YTD % Dvd Ind Yld % LIVE ICB Sector Name
ASCENDAS REAL ESTATE INV TRT A17U 5742 5.8 7.4 12.2 5.9 Real Estate Investment Trusts
SUNTEC REIT T82U 4488 8.4 8.5 20.3 5.0 Real Estate Investment Trusts
CAPITACOMMERCIAL TRUST C61U 4779 11.1 11.1 17.1 5.0 Real Estate Investment Trusts
UOL GROUP LTD U14 5166 7.9 10.4 11.6 2.2 Real Estate Investment & Services
KEPPEL LAND LTD K17 5426 4.5 8.4 9.0 3.7 Real Estate Investment & Services
YANGZIJIANG SHIPBUILDING BS6 4311 4.2 8.9 -0.7 4.4 Industrial Engineering
EZION HOLDINGS LTD 5ME 2871 1.9 1.9 -0.9 0.05 Oil Equipment, Services & Distribution
SATS LTD S58 3593 5.6 5.6 -0.6 3.4 Industrial Transportation
SINGAPORE POST LTD S08 2766 6.2 6.3 10.1 4.3 Industrial Transportation
VENTURE CORP LTD V03 1967 -4.0 2.6 -0.3 7.0 Electronic & Electrical Equipment

Source: Bloomberg, FTSE Group

As noted above, 44 of the 50 Mid Cap Index constituents generated a positive return over the period. Over the last seven weeks the five best performing constituents, on a total return basis, were SMRT Corp, Bumitama Agri, Mapletree Logistics Trust, Oxley Holdings and United Engineers. The relevant performances are detailed in the table below.  The least performing constituents over the past seven weeks (and total returns) were Super Group (-14.9%), Fragrance Group (-3.5%), ARA Asset Management (-2.1%), Neptune Orient Lines (-2.0%) and Hyflux (-1.2%).

Name SGX Code Mkt Cap S$M Price Return QTD Total Return  QTD % Total Return YTD % Dvd Ind Yld % ICB Sector Name
SMRT CORP LTD S53 2024 30.4 30.4 14.7 1.7 Travel & Leisure
BUMITAMA AGRI LTD P8Z 2206 20.7 20.7 33.5 1.0 Food Producers
MAPLETREE LOGISTICS TRUST M44U 2914 13.9 15.8 16.8 6.4 Real Estate Investment Trusts
OXLEY HOLDINGS LTD 5UX 2314 14.6 15.0 45.3 0.4 Real Estate Investment & Services
UNITED ENGINEERS LTD U04 1439 10.2 12.7 30.0 3.1 Construction & Materials

Source: Bloomberg, FTSE Group

Note that the above table is based on total returns and includes four of the five best performing constituents on a price-alone basis over the period. CapitaCommercial Trust (SGX: C61U) gained 11.1% in price in the quarter to date. The trust maintains a semi-annual dividend distribution policy and had its last dividend ex-date in January. United Engineers (SGX:U04) gained 10.2% on a price-alone basis, however it’s last ex-dividend date was at the end of April, and hence that dividend distribution is included in the total return. United Engineers maintains an annual dividend distribution policy and 30 April was the ex-divided date for a regular distribution of 5 cents per share and a special distributution of 2 cents per share.

Dividends are an important aspect of the FTSE Mid Cap Index as exemplified in the difference between the price return and total return of the index over the past seven weeks. Alongside the 18 REITs and property trusts, another 26 constituents of the Mid Cap Index maintain indicative dividend yields above 1.0%. The indicative dividend yield of the Mid Cap Index is currently 4.5%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.