The Straits Times Index (SGX:^STI) is made up of 30 stocks that include some of Singapore’s largest companies and the region’s biggest businesses. Over the first six months of 2014, the STI generated a total return of 4.4% with Singapore’s mid cap stocks outperforming the large cap stocks. The international environment was shaped by steady growth in ASEAN, ongoing policy adjustments in China and the United States continuing to pullback from unconventional expansionary monetary policy. Just as STI constituent stocks performed differently over the six months, trading activity or turnover velocity of the constituent stocks also varied. Turnover velocity compares…
The Straits Times Index (SGX:^STI) is made up of 30 stocks that include some of Singapore’s largest companies and the region’s biggest businesses. Over the first six months of 2014, the STI generated a total return of 4.4% with Singapore’s mid cap stocks outperforming the large cap stocks. The international environment was shaped by steady growth in ASEAN, ongoing policy adjustments in China and the United States continuing to pullback from unconventional expansionary monetary policy.
Just as STI constituent stocks performed differently over the six months, trading activity or turnover velocity of the constituent stocks also varied. Turnover velocity compares the monthly share turnover of a stock to its month-end market capitalisation. The result is a ratio that is usually annualised. The general rule of thumb is, the higher the turnover velocity, the more active the stock was. Over the first six months of 2014, Noble Group was the most active STI stock with a turnover velocity of 100%. Hence on an annualised basis, Noble Group generated as much average turnover as it has market capitalisation.
The five STI stocks with the highest annualised turnover velocity over 1H14 are tabled below.
|Name||SGX Code||Market Cap S$B||Total Return YTD %||Dvd Ind Yld %||Avg Ann TOV 1H14 %||ICB Subsector Name|
|NOBLE GROUP||N21||9.2||30.6||0.8||100||Diversified Industrials|
|ASCENDAS REAL ESTATE INV TRT||A17U||5.6||8.9||6.1||70||Industrial & Office REITs|
|GLOBAL LOGISTIC PROPERTIES||MC0||13.0||-7.3||1.7||66||Real Estate Holding & Development|
|OLAM INTERNATIONAL||O32||6.0||60.3||1.6||65||Food Products|
|GOLDEN AGRI-RESOURCES||E5H||7.0||1.8||2.0||64||Farming & Fishing|
Source: Bloomberg (Data as of 11 July 2014)
Note that Noble Group, Golden Agri-Resources and Global Logistic Properties were among the five STI constituents with the highest turnover velocity in 2013. Last year, Singapore Press Holdings and ComfortDelGro were also among the five.
Noble Group (SGx:N21)
As noted above, Noble Group was the most active STI stock in 1H14 with an annualised turnover velocity of 100%. Noble Group was also the second best performing STI stock over 1H14 with a total return of 29.2%.
As maintained in its corporate profile, Noble Group manages a portfolio of global supply chains covering a range of agricultural and energy products, as well as metals, minerals and ores. The Group operates from over 140 locations and facilitates the marketing, processing, financing and transportation of essential raw materials. With a market capitalization of S$9.2 billion, Noble Group has gained 30.6% in total return in the 2014 year to date. On 15 May 2014, the Group reported revenue of US$18 billion and net profit of US$152 million for the first quarter ended 31 March 2014. The stock went ex-dividend on 12 May 2014, distributing S$0.01 in scrip dividends. As of last Friday, its indicative dividend yield stood at 0.8%.
Ascendas REIT (SGX:A17U)
Ascendas Real Estate Investment Trust (REIT) was ranked second with an annualized turnover velocity of 70%. Ascendas REIT has a full market capitalisation of S$5.6 billion.
Ascendas REIT is a business space and industrial REIT with a diversified portfolio consisting of 103 properties in Singapore, including business and science park properties, high-specs industrial properties, light industrial properties, logistics and distribution centres and warehouse retail facilities and two business park properties in Beijing and Shanghai. As of 31 March 2014, its total assets were valued at approximately S$7.4 billion. On 21 April 2014, Ascendas REIT reported gross revenue of S$613.6 million and S$342.0 million available for distribution for the financial year ended 31 March 2014. On 26 June 2014, Ascendas REIT announced the proposed acquisition of Hyflux Innovation Centre for S$191.2 million in a conditional sale and purchase agreement. Units in the trust went ex-dividend on 25 April 2014, distributing S$0.0355 dividends. Its indicative dividend yield as of Friday was 6.1%. Since its initial public offering (IPO) in November 2002, the REIT has been paying out 100% of its income available for distribution. Ascendas REIT has generated a gain of 8.9% in total return since the start of 2014.
Global Logistic Properties (SGX:MC0)
With a market capitalisation of S$13.0 billion, Global Logistic Properties had an annualised turnover velocity of 66%, the third most active STI stock in 1H14.
Global Logistic Properties is a provider of modern logistics facilities in China, Japan and Brazil. Its property portfolio of 25.4 million square meters is diversified across 63 cities, serving over 700 customers. In its Annual Report 2014, Global Logistic Properties reported revenue of US$598.3 million for the year ended 31 March 2014, with an increase in revenue from China and Brazil by 43% and 234% respectively whereas revenue from Japan declined by 40%. The company will release its financial results for the first quarter ended 30 June 2014 (1Q FY 2015) after the close of trading on Monday, 4 August 2014. The stock will go ex-dividend on 22 July 2014, distributing S$0.045 dividends. It currently maintains an indicative dividend yield of 1.7%. As of 11 June, Global Logistic Properties declined in total return for the 2014 YTD by 7.3%.
Olam International (SGX:O32)
Olam International had an annualised turnover velocity of 65% in 1H14. Olam International was the best performing STI stock over 1H14 with a total return of 68.1%.
Olam International is an agri-business operating from seed to shelf in 65 countries, supplying food and industrial raw materials to more than 13,600 customers globally. Its businesses are diversified across various commodities, including cocoa, coffee, cashew, rice and cotton. Olam International has a market capitalisation of S$6.0 billion. On 15 May 2014, the Group reported EBITDA of S$335.3 million and PATMI of S$396.1 million for the third quarter ended 31 March 2014, an increase of 1.5% and 265.1% respectively from the corresponding period in the previous year. The stock last went ex-dividend on 5 November 2013, distributing S$0.04 dividends. On 23 June 2014, Olam International
announced a partnership with Mitsubishi Corporation of Japan, in which Mitsubishi Corporation of Japan will invest US$64.0 million for an 80.0% equity interest in wholly owned subsidiary, Olam Grains Australia. Olam International currently maintains an indicative dividend yield of 1.6%. In the 2014 YTD, Olam International generated a 60.3% gain in total return.
Golden-Agri Resources (SGX:E5H)
With a market capitalisation of S$7.0 billion, Global Logistic Properties had an annualized turnover velocity of 64%, completing the list of the five most active STI stocks in 1H14.
Golden Agri-Resources is a palm oil plantation company focusing on sustainable palm oil production. Its business operations in Indonesia include cultivating and harvesting of oil palm trees, processing of fresh fruit bunch into crude palm oil and palm kernel and refining crude palm oil into value-added products such as cooking oil, margarine and shortening. It also owns integrated operations in China, such as a deep-sea port, oilseeds crushing plants, production capabilities for refined edible oil products as well as other food products such as noodles. On 14 May 2014, the company reported revenue of US$1.91 billion for the first quarter of 2014 ended 31 March, a 34% increase from the corresponding quarter in the previous year. The stock went ex-dividend on 29 April 2014, distributing S$0.00515 dividends. As of Friday, its indicative dividend yield stood at 2.0%. The stock generated a gain of 1.8% in total return since the start of 2014.
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