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STI maintains 7.5% gain in 2014 YTD

As of the first hour of trading today, the Straits Times Index (SGX:^STI) was trading at 3310, hence generating a year to date total return of 7.5%.

Comparatively, by the same measures and over the same time, the Nikkei 225 generated a 2.3% decline, while the Hang Seng Index generated a 9.0% gain. However, these dividend-inclusive returns do not provide a full account of the 2014 comparative ride thus far. Volatility can represent another side of the coin – and can be used to depict the price risks associated with those index returns. In other words, how big were the daily up/down swings in the generation of those index returns?

In the case of the three key indices of Asia’s financial centers, comparative annualised volatilities over the year thus far were 8.2% for the STI, 14.0% for the Hang Seng Index and 20.7% for the Nikkei 225 Index. Hence the returns of the STI were generated with comparatively less price swings than the other two indices.  Comparing volatilities reveals the STI returns were generated with almost half the swings associated with Hang Seng Index returns, and less than half the swings associated with the performance of the Nikkei 225 Index.

Volatility, however, is not static and during the month of October, the STI saw some marginal increases to its long term volatility levels which are near 11% annualised for the past three years and around 13% annualised for the past five years. During the last three years the total return of the STI was 29.9% and over the past five years, 41.6%. Similarly, the two Exchange Traded Funds, the SPDR Straits Times Index ETF (SGX: ES3) and the Nikko AM Singapore STI ETF (SGX: G3B)  that track the STI generated average total returns of 28.2% over the three years and 38.0% over the five years.

The STI is a much diversified index, not just by the different business streams of the 30 constituent stocks, but by the geographical revenue reach of the 30 constituents. Much of Singapore’s social and economic internationality transcends to the STI.  In the year to date, the five best performing STI stocks have been associated with the regional consumer markets and financials. These five stocks were Thai Beverage Public Company (SGX:Y82), Olam International (SGX:O32), ComfortDelGro Corporation (SGX: C52), Hongkong Land Holdings (SGX:H78) and DBS Group Holdings (SGX:D05). The table below details the five best performing STI stocks ranked according to their 2014 year-to-date total return.

Name SGX Code Market Cap: S$B Px Chg Pct YTD % Total Return YTD % Dvd Ind Yld % GICS SubInd Name
THAI BEVERAGE PCL Y92 18.7 39.8 43.9 2.1 Distillers & Vintners
OLAM INTERNATIONAL O32 5.1 37.5 42.5 2.4 Food Distributors
COMFORTDELGRO CORP C52 5.7 34.3 39.0 2.9 Trucking
HONGKONG LAND HOLDINGS H78 21.2 20.4 20.9 2.6 Real Estate Operating Companies
DBS GROUP HOLDINGS D05 47.5 13.1 17.0 3.0 Diversified Banks

Source: Bloomberg (Data as of 7 November 2014)

Thai Beverage Public Company, together with its subsidiaries, produces and distributes alcoholic and non-alcoholic beverages in Thailand and internationally. The company operates through four segments: Spirits, Beer, Non-Alcoholic Beverages, and Food. Thai Beverage Public Company has a market capitalisation of S$18.7 billion and generated 43.9% 2014 year-to-date total return, which is the highest among the STI stocks. The company reports 97% of its revenue from Thailand.

Olam International engages in sourcing, processing, packaging, and merchandising agricultural products. The company operates in five segments: Edible Nuts, Spices & Vegetable Ingredients; Confectionery & Beverage Ingredients; Food Staples & Packaged Foods; Industrial Raw Materials; and Commodity Financial Services. Olam International has a market capitalisation of S$5.1 billion and generated 42.5% 2014 year-to-date total return. The company reports close to half of its revenue from Asia and Middle East while the other half of its revenue from Africa, Europe and Americas.

ComfortDelGro Corporation operates as a passenger land transportation company. The company provides services which include public bus and charter services, rail services and public taxi services. ComfortDelGro Corporation has a market capitalisation of S$5.7 billion and generated 39.0% 2014 year-to-date total return. The company reports 57% of its revenue from Singapore and 25% from United Kingdom.

Hongkong Land Holdings, together with its subsidiaries, is engaged in the investment, development, and management of real estate properties in Greater China and Southeast Asia. The company operates through two segments, Commercial Property and Residential Property. Hongkong Land Holdings has a market capitalisation of S$21.2 billion and generated 2014 year-to-date total return of 20.9%. The company reports 63% of its revenue from Hong Kong, Macau and China and its remaining revenue from Southeast Asia.

DBS Group Holdings provides a range of commercial banking and financial services in Singapore, Hong Kong, rest of Greater China, South and Southeast Asia, and internationally. DBS Group Holdings has a market capitalisation of S$47.5 billion and generated 2014 year-to-date total return of 17.0%. The company reports 64% of its revenue from Singapore and 26% from Hong Kong.

The full list of the 30 stocks and their year to date performances are detailed below.

Name SGX Code Market Cap: S$B Px Chg Pct YTD % Total Return YTD % Dvd Ind Yld % GICS SubInd Name
THAI BEVERAGE PCL Y92 18.7 39.8 43.9 2.1 Distillers & Vintners
OLAM INTERNATIONAL O32 5.1 37.5 42.5 2.4 Food Distributors
COMFORTDELGRO CORP C52 5.7 34.3 39.0 2.9 Trucking
HONGKONG LAND HOLDINGS H78 21.2 20.4 20.9 2.6 Real Estate Operating Companies
DBS GROUP HOLDINGS D05 47.5 13.1 17.0 3.0 Diversified Banks
JARDINE CYCLE & CARRIAGE C07 14.3 11.7 15.0 3.4 Distributors
JARDINE MATHESON HLDGS J36 53.6 14.7 14.8 2.4 Industrial Conglomerates
UNITED OVERSEAS BANK U11 37.6 9.7 13.5 3.0 Diversified Banks
NOBLE GROUP N21 8.0 12.1 13.2 0.9 Trading Companies & Distributors
HUTCHISON PORT HOLDINGS TR-U NS8U 7.8 3.9 9.6 7.0 Marine Ports & Services
ASCENDAS REAL ESTATE INV TRT A17U 5.4 2.3 9.0 6.5 Industrial REITs
JARDINE STRATEGIC HLDGS J37 50.5 10.7 9.0 0.8 Industrial Conglomerates
CAPITAMALL TRUST C38U 6.8 1.8 7.6 5.6 Retail REITs
CAPITALAND C31 13.3 4.0 6.6 2.5 Diversified Real Estate Activities
SINGAPORE TELECOMMUNICATIONS Z74 60.6 3.6 6.2 4.4 Integrated Telecommunication Services
OVERSEA-CHINESE BANKING CORP O39 40.2 2.2 5.8 3.4 Diversified Banks
SINGAPORE PRESS HOLDINGS T39 6.9 3.9 5.6 3.5 Publishing
SINGAPORE AIRLINES C6L 11.9 -2.8 0.7 1.6 Airlines
SINGAPORE EXCHANGE S68 7.6 -3.6 0.3 4.0 Specialized Finance
STARHUB CC3 7.2 -3.7 -0.2 4.8 Wireless Telecommunication Services
CITY DEVELOPMENTS C09 8.6 -2.2 -1.1 0.9 Diversified Real Estate Activities
WILMAR INTERNATIONAL F34 20.1 -6.7 -4.6 2.4 Agricultural Products
SINGAPORE TECH ENGINEERING S63 11.5 -8.8 -5.0 2.2 Aerospace & Defense
GOLDEN AGRI-RESOURCES E5H 6.6 -6.4 -5.6 2.2 Agricultural Products
GLOBAL LOGISTIC PROPERTIES L MC0 12.8 -8.3 -6.8 1.7 Real Estate Operating Companies
SIA ENGINEERING CO S59 5.0 -15.2 -12.2 4.4 Airport Services
KEPPEL CORP BN4 17.1 -15.9 -12.6 4.5 Industrial Conglomerates
SEMBCORP INDUSTRIES U96 8.4 -17.3 -13.9 1.1 Industrial Conglomerates
SEMBCORP MARINE S51 7.5 -19.3 -16.7 3.1 Construction Machinery & Heavy Trucks
GENTING SINGAPORE PLC G13 12.7 -30.1 -29.6 1.0 Casinos & Gaming

Source: Bloomberg (Data as of 7 November 2014)

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