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

The Straits Times Index (SGX: ^STI), which tracks the performance of the top 30 largest and most liquid companies listed in Singapore, started 2018 on a good footing.

For the month of January, the local stock market benchmark hit a high of 3,609.24 points on 24 January before retreating to finish at 3,533.99 points on 31 January. In all, as compared to the previous month, the Straits Times Index added 3.9%.

Of the 30 index components, 23 were in the green, five were in the red while two – Thai Beverage Public Company Limited (SGX: Y92) and Hutchison Port Hldg Trust (SGX: NS8U) – ended the month unchanged.

The top three winners of the STI were Keppel Corporation Limited (SGX: BN4), Venture Corporation Ltd (SGX: V03) and Sembcorp Industries Limited (SGX: U96).

Source: S&P Global Market Intelligence

Keppel Corporation and Sembcorp Industries, which are the world’s major oil rig builders, performed exceptionally well for January.

Keppel Corporation, for one, can look forward to the future after taking a one-off charge of S$618.7 million for the 2017 fourth quarter. The expense is related to the global resolution with criminal authorities following investigations on corrupt payments made by a former agent of its unit, Keppel Offshore & Marine, in Brazil.

Due to the one-off expense, Keppel Corporation’s full-year net profit plunged 72.4% year-on-year to S$216.7 million. Excluding this, the conglomerate would have achieved a net profit of around S$836 million for the latest financial year, up 7% as compared to the previous year’s S$784 million.

It remains to be seen if Sembcorp Marine Ltd (SGX: S51), which is 60.9% owned by Sembcorp Industries, will face a similar penalty. Reuters reported that “in plea testimony made public in Brazil in March 2015, a former Petrobras executive said a representative of Sembcorp’s Jurong Aracruz shipyard was involved in bribe payments”.

Venture Corporation was recently added to the Straits Times Index after Global Logistic Properties Ltd (SGX: MC0) was in the midst of being privatised then. Less than a month after being promoted to the league of the big boys, its shares had soared some 13% in January.

On the other hand, the top three losers of the index were CapitaLand Commercial Trust (SGX: C61U), Jardine Cycle & Carriage Ltd (SGX: C07) and CapitaLand Mall Trust (SGX: C38U).

Source: S&P Global Market Intelligence

CapitaLand Commercial Trust, which undertook a rights issue in October 2017 to partially fund the acquisition of the retail and office components of Asia Square Tower 2, posted a 4.6% year-on-year fall in distribution per unit (DPU) to 8.66 cents for the full year ended 31 December 2017. The fall was despite gross revenue for the year increasing 13% to S$337.5 million and net property income (NPI) growing 14.8% to S$265.5 million. The enlarged units base indeed took a huge toll on the DPU.

In what was the exact opposite of CapitaLand Commercial Trust, CapitaLand Mall Trust managed to achieve a higher DPU for 2017 even though its gross revenue and NPI went in the other direction. For 2017, gross revenue tumbled 1.1% year-on-year to S$682.5 million while NPI slipped 0.3% to S$478.2 million. 2017’s DPU inched up 0.3% to 11.16 cents.

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 11.9 times trailing earnings and had a dividend yield of 2.8%, as at 31 January 2018.

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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 units in CapitaLand Commercial Trust and CapitaLand Mall Trust.