Which Is The Best Performing Industry This Year?

2016 is highly unusual from a historical perspective. The market started the year with a wide sell down for 2 months, followed by a recovery. For the past few months it has been treading water.

Yet, despite the Straits Times Index (SGX: STI) trading at similar levels to the beginning of the year, there are some obvious winners and losers.

Below is a summary of the various industries in Singapore for the first 7 months of 2016.


Knowing which industry performs best and worst allow us, in my opinion, to do a couple of things.

Firstly, knowing the best-performing industry allows us to study the reasons for the good performance. In other words, why have these industries performed well despite widespread worries in the economy. For instance consumer staples such as Dairy Farm International Holdings Ltd (SGX: D01) and Sheng Siong Group Ltd (SGX: OV8) have returned more than 20% year to date.

Secondly, knowing the worst-performing industries could be a good place start hunting for potential investments. This strategy, which is generally known as contrarian investing, is useful since investors tend to overact during bad times.

Here, we can see that banking industry has been the worst performing industry in the first 7 months of 2016. The local banks, namely DBS Group Holdings Ltd (SGX: D05) and United Overseas Bank Ltd (SGX: U11) Oversea-Chinese Banking Corp. Limited (SGX: O39) are all down for the year.

Given the strong performance by consumer stocks despite a weak sentiment, investors might want to explore further to find potentially good consumer companies that can perform in both good and bad economic environment.

On the other hand, value investors or contrarian investors may want to identify sectors that could offer bargain buys. This strategy, however, is not without risk given that share price may continue to fall further.

Lastly, investors should always study individual companies before investing in them, since not all companies are created equally, and it is best to study them on a case to case basis.

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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 Lawrence Nga doesn’t own shares in any companies mentioned. Dairy Farm International has been recommended by Stock Advisor Gold.