The Worst Performing Stocks In The Straits Times Index In 2015

2015 was not a great year for Singapore’s stock market – the Straits Times Index (SGX: ^STI) fell by 14% in price, rivalling the results of stock markets of countries like Greece, which is mired in economic turmoil.

Despite the overall market malaise, companies like SATS Ltd (SGX: S58) and ComfortDelgro Corporation Limited (SGX: C52) actually produced total returns (after accounting for reinvested dividends; subsequent returns-data for stocks also include gains from reinvested dividends) of 31% and 21%, respectively, during the year.

But, of the 30 constituents of the Straits Times Index, some 23 companies saw a drop in the price of their shares in 2015. Of the 23, two actually suffered losses of more than 40%. Let’s have a closer look at these two stocks.

“Oil” is a dirty word now

The price of oil had declined consistently throughout 2015. With that, many companies within the oil & gas sector had felt the heat.

SembCorp Marine Ltd (SGX: S51), one of the largest oil-rig builders in the world, saw its shares fall more than 44% in 2015. In the first nine months of the year, the company’s revenue and profit had dropped sharply by 17% and 36% year-on-year, respectively.

With the level of capital expenditures in the oil & gas sector declining and Sembcorp Marine’s highly-leveraged balance sheet adding risk, the outlook for the company’s business in 2016 looks dim to me.

The value of trust in business

In February 2015, a little-known research outfit called Iceberg Research had openly critcised many aspects of Noble Group Limited (SGX: N21), including its accounting practices.

Since then, nothing seems to have gone right for the company, with it attracting even more criticisms from other parties and appearing to have lost the trust of investors.

Noble Group saw its revenue fall 17% year-on-year for the first three quarters of 2015. Combined with a gross margin of less than 2% for the period, the company had suffered a 48% drop in net income from a year ago. With China’s economic growth happening at a lower pace, the demand for commodities are in doubt going forward.

All these had likely added up to pressure Noble Group’s shares, which had lost 65% of their value in 2015.

Foolish Summary

Both SembCorp Marine and Noble Group’s poor performance in 2015 can perhaps be partly attributed to the decline in their operating results. In the long run, the share price of a company is related to the performance of its underlying business.

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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 doesn't own shares in any companies mentioned.