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Highlights & Changes in the MSCI Singapore Small Cap Index

Effective today, there will be one change to the MSCI Singapore Index (SiMSCI) and four changes to the MSCI Singapore Small Cap Index. The MSCI Singapore Small Cap Index includes small cap securities with a market capitalisation below that of the companies in the MSCI Singapore Index. There are currently 85 constituents in the MSCI Singapore Small Cap Index.

Constituent Changes

The MSCI Singapore Small Cap Index will see PACC Offshore Services Holdings, Japfa, Frasers Hospitality Trust and Accordia Golf Trust replacing Keppel Infrastructure Trust, Stamford Land Corporation, Suntec Real Estate Investment Trust (REIT) and Swiber Holdings. At the same time, Suntec REIT will replace Olam International in the MSCI Singapore Index (SiMSCI Index).

The SiMSCI provides a benchmark index for the Singapore stock market, alternative to the Straits Times Index (STI), with 25 mutual constituents. This week it will change to 24 mutual constituents with a total of 29 stocks in the SiMSCI and the 30 stocks in the STI.

Singapore Small Cap Index compared to the World Small Cap Index

The MSCI World Small Cap Index captures small cap stock representation across 23 developed countries and includes more than 4000 constituents.

As of 31 October 2014, the price-to-earnings (P/E) ratio for the MSCI World Small Cap Index was 24.7 and price-to-book (P/B) ratio was 1.9. The P/E measures the price of a stock relative to its most recent earnings. The P/B ratio is used to compare a stock’s market value to its book value. It is calculated by dividing the last closing price of the stock by the recent book value per share. Comparatively, these ratios are less extended in Singapore, as the P/E ratio for the MSCI Singapore Small Cap Index was at 13.2 and the P/B ratio was at 1.2.

The dividend yield for MSCI Singapore Small Cap index stood at 4.5%. This was more than double the dividend yield for MSCI World Small Cap Index at 1.9%. The annualised gross returns of the MSCI Singapore Small Cap Index stood at 13.8% for the ten years ending October, compared to 9.2% for the MSCI World Small Cap Index.

Constituents of the MSCI Singapore Small Cap Index

As of 31 October 2014, Financials, Industrials and Energy sectors were the three largest represented sectors by weighting in the MSCI Singapore Small Cap Index. Financials took up more than 50% of the Index’s weighting followed by 19% from Industrials and 6% from Energy. Among the ten largest capitalised securities in the Index, six are from Financials; two are from Industrials and one each from Info Tech and Energy. The ten largest capitalised securities from the Index are Suntec Real Estate Investment Trust (REIT), Singapore Post, Keppel REIT, SATS, Venture Corporation, Ezion Holdings, Mapletree Greater China Commercial Trust, Mapletree Commercial Trust, Mapletree Logistics Trust and Mapletree Industrial Trust. They have a combined market capitalisation of S$31.1 billion and averaged 2014 year to date total return of 15.7%.

According to the Global Industry Classification Standard (GICS), the ten largest securities range from sub-industries which include REITS, Air Freight & Logistics, Airport Services, Electronic Manufacturing Services and Oil & Gas Equipment & Services.  The table below details the 20 largest capitalised securities in the MSCI Singapore Small Cap Index, ranked according to the index weighting as of 7 November 2014. (Note: Effective today, Suntec REIT will be excluded in this Index and join the SiMSCI Index)

Name SGX Code Market Cap: S$M Px Chg Pct YTD % Total Return:Y-1 % Total Return YTD % Dvd Ind Yld % P/E:D-1 P/B:D-1 MSCI SG Small Cap Index Weight % as of 7 Nov 2014 GICS SubInd Name
SUNTEC REIT T82U 4791.8 24.4 29.7 31.3 4.9 12.9 0.9 7.1 Diversified REITs
SINGAPORE POST S08 4046.5 45.3 54.3 50.8 3.2 28.2 9.4 4.7 Air Freight & Logistics
KEPPEL REIT K71U 3700.3 3.4 11.6 10.2 0.2 5.3 0.9 3.5 Office REITs
SATS S58 3319.0 -7.4 -0.4 -5.0 4.3 18.9 2.4 3.3 Airport Services
VENTURE CORP V03 2099.2 0.3 8.3 7.2 6.5 15.2 1.2 3.2 Electronic Manufacturing Services
EZION HOLDINGS 5ME 2186.1 -23.0 -14.9 -22.9 0.1 8.3 1.7 3.0 Oil & Gas Equipment & Services
MAPLETREE GREATER CHINA COMM RW0U 2570.6 13.1 13.8 21.3 6.7 20.8 0.9 2.9 Diversified REITs
MAPLETREE COMMERCIAL TRUST N2IU 2981.8 18.9 24.5 26.1 5.6 8.4 1.2 2.9 Retail REITs
MAPLETREE LOGISTICS TRUST M44U 2881.0 12.3 18.4 20.1 6.3 10.1 1.2 2.8 Industrial REITs
MAPLETREE INDUSTRIAL TRUST ME8U 2540.3 10.1 15.3 18.3 7.1 7.8 1.2 2.6 Industrial REITs
M1 B2F 3388.2 13.1 24.1 20.3 3.8 19.7 9.7 2.2 Wireless Telecommunication Services
SMRT CORP S53 2488.7 41.8 26.8 44.2 1.6 31.4 3.0 2.0 Railroads
ASIAN PAY TELEVISION TRUST S7OU 1264.4 18.9 25.6 31.5 9.1 10.7 1.0 2.0 Cable & Satellite
ASCOTT RESIDENCE TRUST A68U 1934.1 5.0 13.1 11.7 6.2 10.2 0.9 1.9 Residential REITs
STARHILL GLOBAL REIT P40U 1722.6 2.5 8.4 9.1 6.3 7.1 0.9 1.8 Retail REITs
FIRST RESOURCES EB5 3073.1 -7.5 -9.6 -5.8 2.3 11.8 2.3 1.8 Agricultural Products
UNITED ENGINEERS U04 1847.5 62.1 67.8 67.4 2.4 10.5 1.1 1.8 Construction & Engineering
CDL HOSPITALITY TRUSTS J85 1656.7 3.4 10.4 10.4 6.2 12.0 1.1 1.7 Hotel & Resort REITs
FRASERS CENTREPOINT TRUST J69U 1749.1 8.8 14.0 15.6 5.8 10.2 1.0 1.7 Retail REITs
RAFFLES MEDICAL GROUP R01 2160.0 22.5 22.4 24.3 1.4 23.9 4.2 1.6 Health Care Facilities

Source: Bloomberg & MSCI

 Suntec Real Estate Investment Trust (SGX:T82U) is a real estate investment fund managed by ARA Trust Management (Suntec). The fund invests in real estate and real estate-related assets that are primarily used for retail or office purposes. On 21 October 2014, the company reported total distribution income for the quarter ended 30 September 2014, increased 12.4% year-on-year, to S$58.3 million. Suntec REIT has a market capitalisation of S$4.8 billion and generated 2014 year-to-date total return of 31.3%. The trust went ex-dividend on 28 October 2014, distributing S$0.02328 per share in dividends. Read more about Suntec REIT here.

 Singapore Post Ltd (SGX:S08) is a provider of mail, logistics and retail solutions in regions including Singapore and Asia Pacific. Singapore Post is also the national postal service provider for Singapore and its mail business is involved in collecting, sorting and distributing domestic and international mail.  On 6 November 2014, Singapore Post reported net profit for the quarter ended 30 September 2014, increased 5.5% year-on-year, from S$35.6 million to S$37.6 million. Singapore Post has a market capitalisation of S$4.0 billion and generated 2014 year-to-date total return of 50.8%. The stock went ex-dividend on 18 November 2014, distributing S$0.0125 per share in dividends. Read more about Singapore Post here and here.

Keppel REIT (SGX:K71U)  is a real estate investment trust launched by and managed by Keppel REIT Management Limited. The fund invests in the real estate markets of the Singapore and across Asia. It primarily makes investments in commercial properties. On 16 October 2014, Keppel REIT reported net property income for the nine months ended 30 September 2014, increased 16.1% year-on-year from S$101 million to S$117 million. Keppel REIT has a market capitalisation of S$3.7 billion and generated 2014 year-to-date total return of 10.2%. The trust went ex-dividend on 23 October 2014, distributing S$0.0005 per share in dividends. Read the company analysis on Keppel REIT here and here.

SATS Ltd (SGX:S58), an investment holding company, provides food solutions and gateway services in Singapore, Japan, and internationally. The company operates in three segments: Food Solutions, Gateway Services, and Corporate. On 13 November 2014, SATS reported revenue for the quarter ended 30 September 2014, decreased 2.2% year-on-year to S$442.2 million. SATS has a market capitalisation of S$3.3 billion and generated 2014 year-to-date total return of -5.0%. The stock will go ex-dividend on 26 November 2014, distributing S$0.05 per share in dividends.

Venture Corporation Ltd (SGX:V03) provides technology services, products, and solutions in Singapore, Asia-Pacific, and internationally. The company operates through three segments: Electronics Services Provider, Retail Store Solutions and Industrial, and Component Technology. On 7 November 2014, Venture Corporation reported profit attributable to owners of the company increased 3.1% year-on-year, to S$36.1 million (click here to view more).  Venture Corporation has a market capitalisation of S$2.1 billion and generated 2014 year-to-date total return of 7.2%. The stock went ex-dividend on 5 May 2014, distributed S$0.5 per share in dividends. Read more about Venture Corporation here.

Ezion (SGX: 5ME)develops, owns, and charters offshore assets; and provides offshore marine logistics and support services to the offshore oil and gas industries. The company operates through Offshore Logistic Support Vessels’ Services, and Liftboats and Jack-Up Rigs’ Services segments. On 6 November 2014, Ezion Holdings reported gross profit for the quarter ended 30 September 2014, increased 31.8% year-on-year, from US$36.7 million to US$48.4 million. Ezion Holdings has a market capitalisation of S$2.2 billion and generated 2014 year-to-date total return of -22.9%. The stock went ex-dividend on 25 April 2014, distributing S$0.001 per share in dividends.

Mapletree Greater China Commercial Trust (SGX:RW0U) engages in the investment of various real estate properties for commercial purposes in the Greater China region. It invests in real estate properties for retail and/or office purposes, as well as other real estate-related assets. On 24 October 2014, MGCCT reported distributable income for the quarter ended 30 September 2014, increased 11.9% year-on-year, from S$38.8 million to S$43.5 million. MGCCT has a market capitalisation of S$2.6 billion and generated 2014 year-to-date total return of 21.3%. The trust went ex-dividend on 30 October 2014, distributing S$0.03162 per share in dividends.

Mapletree Commercial Trust (SGX:N2IU) is a Singapore-focused real estate investment trust established with the principal investment objective of investing on a long-term basis, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes, whether wholly or partially, as well as real estate-related assets. On 24 October 2014, MCT reported net property income for the quarter ended 30 September 2014, increased 8.8% year-on-year from S$47.9 million to S$52.1 million. MCT has a market capitalisation of S$3.0 billion and generated 2014 year-to-date total return of 26.1%. The trust went ex-dividend on 30 October 2014, distributing S$0.0197 per share in dividends.

 Mapletree Logistics Trust (SGX:M44U) operates as a logistics real estate investment trust primarily in Singapore. It invests in a portfolio of logistics real estate and real-estate-related assets. The company’s properties include oil and chemical logistics, food and cold storage, distribution centre, and industrial warehousing. On 20 October 2014, MLT reported net property income for the quarter ended 30 September 2014, increased 3.1% year-on-year, from S$66.6 million to S$68.7 million. MLT has a market capitalisation of S$2.9 billion and generated 2014 year-to-date total return of 20.1%. The trust went ex-dividend on 27 October 2014, distributing S$0.0188 per share in dividends.

Mapletree Industrial Trust (SGX:ME8U) portfolio of 85 properties in Singapore has a total book value of approximately S$3.2 billion as at 30 June 2014. These industrial properties include Flatted Factories, Hi-Tech Buildings, Business Park Buildings, Stack-up/Ramp-up Buildings and Light Industrial Buildings. On 21 October 2014, MIT reported net property income increased 4.1% year-on-year, from S$54.0 million to S$56.2 million. MIT has a market capitalisation of S$2.5 billion and generated 2014 year-to-date total return of 18.3%. The trust went ex-dividend on 28 October 2014, distributing S$0.026 per share in dividends.

MSCI Global Equity Indexes provide a representation of the global equity investment universe with market capitalisation size segments for each individual market covered. This link details how each index size segment is defined within each country, reflecting the local market and achieving global integrity across all markets.

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