The Singapore Market this Week: SIA Engineering Company Ltd Takes a Modest Exit

The local stock market bellwether, the Straits Times Index (SGX: ^STI), did not put on a good showing for the week. It shed 0.6% to end Friday’s trading session at 3209.6 points.

Out of the 30 index components, 21 of them were in the red; eight were in the green while one – SIA Engineering Company Ltd (SGX: S59) – ended the week unchanged at S$3.41.

The aircraft maintenance company will no longer feature in the STI come Monday as Jardine Strategic Holdings Limited (SGX: J37) will take over its place. The share price of SIA Engineering has been on a decline recently. For the past one year, its shares have come down more than 10% as compared to the STI’s gain of around 12%. Keen competition has mostly affected the engineering firm.

City Developments Limited (SGX: C09), was the biggest loser of the index, slipping 3.8% to end the week at S$11.25.

The property developer won the Best Sustainability Report for Established Reporters (Mainboard and Catalist) award at the inaugural Singapore Sustainability Reporting Awards ceremony. It was also named the Regional Sector Leader for the Office Sector in Asia in the 2017 Global Real Estate Sustainability Benchmark.

Ms Esther An, CDL Chief Sustainability Officer, commented:

“There is increasing recognition of the strategic connection between sustainability and business performance. Governments and the international investment community are also increasingly holding corporations accountable for ESG [Environmental, Social and Governance] factors. For instance, businesses can no longer ignore the impact of climate change risks on their bottom line. In Singapore, businesses that do not adopt sustainable practices may face reputational or operational risks that will impact their license to operate, and be exposed to higher operating costs, with the water price increase and impending carbon tax.”

Following a Business Times article entitled “KBS, Keppel Capital to jointly list REIT holding US offices”, Keppel Corporation Limited (SGX: BN4), confirmed that it is looking to carry out an initial public offering (IPO) to list a U.S. commercial real estate investment trust (REIT) in Singapore.

The REIT will be jointly sponsored by Keppel Capital Holdings Pte Ltd, a wholly-owned subsidiary of Keppel Corporation, and KBS Pacific Advisors Pte Ltd. The initial portfolio will consist of 11 office assets. Applications for the IPO have been submitted to the relevant authorities, and they are currently under review.

Over at the winning side of the STI, Hongkong Land Holdings Limited (SGX: H78), surged the most for the week. It added 2.6% to US$7.47.

Elsewhere, Frasers Centrepoint Ltd (SGX: TQ5), tumbled 3.3% to end Friday at S$2.06.

This week, the firm made public that its wholly-owned subsidiary, Frasers Property International Pte Ltd, would be acquiring four business parks in the United Kingdom for around S$1.2 billion. The four business park assets will be freehold in nature, and they are Winnersh Triangle, Chineham Park, Watchmoor Park and Hillington Park.

QAF Limited (SGX: Q01), the maker of Gardenia bread, is looking to list its primary production business on the Australian Securities Exchange through an IPO. Post-IPO, QAF will own at least 51% of the pig farming, pork processing and feedmilling business and the Australian-listed company will remain as QAF’s subsidiary.

Shares of the multi-industry food company went up 1.2% to close at S$1.22 on Friday.

The STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, is now valued at a trailing price-to-earnings ratio of 11.43 and has a dividend yield of 3.1%.

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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 Hongkong Land Holdings Limited. Motley Fool Singapore contributor Sudhan P owns units of STI ETF.