The Singapore Market Last Week: The Aftermath of Brexit

Last week, stock markets around the world were roiled by the United Kingdom’s vote to leave the European Union. Our local stock market was not spared as the Straits Times Index  (SGX: ^STI) had slumped by 1% during the week to finish last Friday at 2,735 points.

Let’s take stock of what happened.

Of the 30 index components, 26 ended the week with a loss. Container port owner Hutchison Port Holdings Trust (SGX: NS8U) lost the most ground as its units tumbled by 6.6% in price from US$0.455 two Fridays ago to US$0.425 last Friday. Another big loser in the index was real estate giant City Developments Limited (SGX: C09). Its shares declined by 6.1% to S$8.31.

In 2015, City Developments derived 12% of its total revenue of S$3.3 billion from the UK. In a press statement on Friday, the company said that it “continues to have confidence in the long-term fundamentals of the UK economy and our strategy of targeting predominantly UK nationals for our residential developments.”

City Developments added that in the last two years, all of its acquisitions in the UK had been outside Central London and a majority of its UK development projects cater to the local market. The company thinks that these traits “helps to insulate [its] projects from any potential impact of UK’s impending exit from the EU.”

The property counter is now trading at 0.84 times book value.

Another firm within the Straits Times Index with large exposure to the UK is land transport operator Comfortdelgro Corporation Ltd (SGX: C52). The company had sourced over 20% of its total revenue of S$4.1 billion in 2015 from the UK. The firm runs bus and taxi services in the country. Its bus operations are carried out under Metroline Limited, London’s second largest public bus operator.

Comfortdelgro, which saw its shares lose 0.7% in value last week to end last Friday at a price of S$2.67, is now trading at 19 times historical earnings.

On the other end of the winner-loser spectrum is Singapore Telecommunications Limited (SGX: Z74). The telco ended the week with the most gains – its share price had climbed by 2.1% to S$3.87.

It announced its financial results for its fiscal year ended 31 March 2016 a month ago. The company’s revenue had declined by 1.5% year-on-year to S$17 billion but its net profit managed to inch up by 2.4% to around S$4 billion. The drop in revenue was mainly due to a poor showing in the Group Consumer business division.

The SPDR STI ETF (SGX: ES3), an index tracker which can be taken as a proxy for the Straits Times Index, is now valued at 11.4 times trailing earnings and has a dividend yield of 3.6%.

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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 Sudhan P doesn’t own shares in any companies mentioned.