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4 Quick Things Investors Should Know About Singapore’s Blue Chip Stocks For 2017

The Straits Times Index (SGX: ^STI) is often seen as the barometer for the Singapore stock market. The index consists of 30 stocks that are commonly referred to as blue chips. It might be worthwhile to take a look at how the index and its components did in 2016 as we begin a new year.

recent report by bourse operator Singapore Exchange Limited (SGX: S68) provided insight on the performance of the 30 stocks that make up the Straits Times Index. Here are four quick things investors should know (figures as of 30 December 2016 unless otherwise stated):

  1. The SPDR STI ETF (SGX: ES3) is an exchange traded fund that mimics the fundamentals of the Straits Times Index. For the 12 months ended 30 November 2016, the SPDR STI ETF was up 5.19% overall (including dividends). The average gain for a blue chip stock was 4.6%.
  2. The Straits Times Index is also the home of many dividend paying stocks. In fact, all 30 stocks within the index offers a dividend. The SPDR STI ETF is offering a distribution yield of 3.09%, as of 6 January 2016. The average dividend yield for the blue chips is 3.7%. You can head here to find out which are the five blue chips with the highest dividend yields.
  3. Of the 30 blue chips, 17 logged in a positive return in 2016. This is a big improvement from 2015 when only seven companies recorded a positive gain. You can head here and here to find out the best and worst performers amongst the blue chips in 2016.
  4. Finally, let’s take a look at valuation. The SPDR STI ETF is trading at a price to earnings ratio of around 12.4 as of 7 January 2016. It also has a price to book (PB) ratio of 1.2 times. On average, the 30 companies in the Straits Times Index have a PB ratio of 2.4.

The statistics above give you a sense of what the biggest companies listed in Singapore are offering. As the market barometer, the Straits Times Index can also give investors a yardstick to measure the performance, dividends, and valuation of the stocks they own.

On the other hand, it is also important to keep in mind that the Straits Times Index is a collection of just 30 companies. As such, it might not always give an accurate account of the entire Singapore stock market, which consists of over 700 listed entities.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore Exchange. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.