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2015 Review For The Singapore Stock Market: Oil and Gas Companies

We are nearing the end of 2015. For many investors in Singapore, it has been a year of pain and hardship.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the Straits Times Index (SGX: ^STI), has seen its net asset value per unit fall 14% from S$3.408 at end-2014 to S$2.93 yesterday.

How have companies in different industries fared this year? Let’s have a look at major oil & gas companies listed in Singapore to find out the biggest winners and losers for 2015 in that space.

The slippery slope of oil & gas

The oil & gas sector has been one of the hardest hit in 2015. Oil prices have fallen from above US$100 per barrel in 2014 to less than US$40 per barrel currently. Many producers and explorers of oil & gas around the world have cut their capital expenditure programs for the next few years.

Companies listed on Singapore’s stock market that are related to the oil & gas sector have been battered. We can see this in the stock market performance of some of the bigger plays in the space, namely SembCorp Marine Ltd (SGX: S51)Keppel Corporation Limited (SGX: BN4)Ezra Holdings Limited (SGX: 5DN)Ezion Holdings (SGX: 5ME), and PACC Offshore Services Holdings Ltd (SGX: U6C).

oil and gas
Source: S&P Capital IQ

When we compare their total returns (inclusive of reinvested dividends) from 1 January 2015 to 28 December 2015, all five have suffered significant losses.

The “winner” in the group, with the least amount of losses, was Keppel Corporation, with a loss of 22%. The company has significant non-oil related businesses – such as its real estate arm Keppel Land and some infrastructure interests –  that might have helped a little in offsetting the weaker prospects of its oil & gas-related businesses.

The biggest loser was Ezra Holdings, which had lost more than 68% of its share value. The company had reported a loss to shareholders in its fiscal year ended 31 August 2015 and was also struggling with a high debt load with a total debt to equity ratio of 108%.

Foolish Summary

Although the stock market performance of companies over a single year is often too short to fully reflect their fundamentals, it is still interesting to note the wide difference in performance between companies that are operating in the same industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns shares in Keppel Corporation.