It’s a Wrap: The Bottom 3 and Top 3 Blue-Chip Stocks for August

The Straits Times Index (SGX: ^STI), which tracks the performance of the top 30 largest and most liquid companies listed in Singapore, did not perform well for the month of August.

For the month, the local stock market benchmark slumped 1.6% to end at 3,277.26 points on 31 August 2017. Out of the 30 components, 19 were in the red; nine were in the green, and the rest were flat.

The top three losers of the index were SembCorp Industries Limited (SGX: U96), Singapore Telecommunications Limited (SGX: Z74) and Singapore Press Holdings Limited (SGX: T39).

Source: S&P Global Market Intelligence

For the second quarter, Sembcorp Industries saw a 37.2% decline in net profit, and this caused its dividends to be cut by a quarter. The conglomerate said that “the market environment is expected to remain challenging in 2017”.

Over at Singtel, its first quarter revenue increased 8.3% year-on-year to S$4.23 billion, but net profit slipped 5.6% to S$891.6 million. You can read up more on the results here.

SPH said that would be divesting its 20% stake in Mediacorp TV Holdings Pte Ltd and 40% stake in Mediacorp Press Limited for S$18 million. The deal, which is subject to regulatory approval, should be completed at the end of this month.

Mr Ng Yat Chung, Executive Director and CEO-Designate of SPH, explained the rationale for the divestment:

“The proposed divestment will allow SPH to focus on its core media business. Free to air television is not core to SPH’s business and the divestment of the stake in TODAY follows Mediacorp’s decision to turn it into a fully digital product. This rationalization will allow us to focus our energies on serving our audience and advertisers best through a suite of strong media products across the print, digital and radio platforms.”

On the other hand, the top three winners of the STI were Capitaland Mall Trust (SGX: C38U), Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) and City Developments Limited (SGX: C09).

Source: S&P Global Market Intelligence

The developer of Funan, Capitaland Mall Trust, said that it is divesting Funan’s serviced residence component to Victory SR Pte Ltd, a wholly owned subsidiary of Ascott Serviced Residence (Global) Fund Pte Ltd.

The deal is likely to be completed in the fourth quarter of this year. Capitaland Mall Trust is then expected to clock in a net gain of around S$21 million, on the back of gross proceeds of about S$102 million.

Yangzijiang Shipbuilding announced its financial results for the second quarter of 2017 early August.

For the quarter, revenue went up by 27% year-on-year to RMB3.8 billion, due to improvements in its shipbuilding related segment and investment segment. Meanwhile, net profit surged 73% to RMB719.9 million, despite headwinds in the sector it is operating in.

The firm explained the reasons for its strong performance for the quarter:

“Yangzijiang’s steady performance in a volatile market is attributable to its persistent efforts in building up core capabilities in shipbuilding, its achievements in innovation and introducing new vessel products, and its established management structure and use of technology that constantly improve its operational efficiency.”

Property developer, City Developments, posted a revenue of S$854.1 million for the second quarter ended 30 June 2017, a decline of 21.8% year-on-year. Net profit tumbled 17.9% to S$109.9 million.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, was valued at 11.6 times trailing earnings and had a dividend yield of 3.04% on 31 August 2017.

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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 units of Capitaland Mall Trust. Motley Fool Singapore contributor Sudhan P owns shares in Sembcorp Industries Limited, and units of Capitaland Mall Trust and SPDR STI ETF.