Singapore’s Newest Blue Chips: How Have They Fared?

Even the Straits Times Index  (SGX: ^STI) needs new clothes on occasion.

The latest member to join Singapore’s family of blue chips is CapitaLand Commercial Trust (SGX: C31U), a real estate investment trust with a focus on commercial properties. It took the place of the beleaguered Noble Group Limited (SGX: N21) earlier this year.

Prior to this, in September 2015, there were three companies that were swapped into the index, namely UOL Group Limited (SGX: U14)Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6), and SATS Ltd (SGX: S58). Before the trio joined, Ascendas Real Estate Investment Trust (SGX: A17U) had ascended into blue chip status in mid-2014.

The emperor’s new clothes

A recent report from bourse operator Singapore Exchange Limited (SGX: S68) had shed some light on the performance of the new additions. Here’re four quick takeaways from the report (figures as of 15 April 2016, unless otherwise stated):

  1. The newest blue chips have started 2016 on solid footing. The average return for the quintet was 2.6% from the start of 2016 through 15 April 2016. In contrast, the Straits Times Index’s return was just 1.4%. Foolish investors might also be interested in longer-term performance though. Here, SATS stands out as the top dog with over 100% in total returns in the last five years. On the other end, Yangzijiang Shipbuilding is holding up the rear with negative returns over the past five years.
  2. When it comes to size, Ascendas REIT tops the list. The industrial REIT has a market capitalization of $6.7 billion. UOL Group is in second place with a market capitalization of $4.8 billion. Third place goes to the $4.5 billion catering giant, SATS.
  3. The price-to-earnings (PE) ratio of the quintet provides a peek into their relative valuation in comparison with the Straits Times Index on the whole. The average PE for the quintet was 13.4. The SPDR STI ETF (SGX: ES3), an exchange traded fund that mimics the fundamentals of the Straits Times Index, had a PE ratio of 12, as of 21 April 2016. SATS may be the best performer over the last five years, but it is also the priciest in terms of the PE ratio. SATS had a PE ratio of over 20.
  4. The price-to-book (PB) ratio would be another measurement stick. The SPDR STI ETF had a PB ratio of 1.2 as of 21 April 2016. In contrast, the property owner-developer UOL Group had a PB ratio of just 0.6. On average, though, the quintet weighed in with a PB of 1.3.

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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 contributor Chin Hui Leong doesn’t own shares in any companies mentioned.