Since the most-recent peak of the Straits Times Index (SGX: ^STI) seen on 2 May, the index has fallen some 9% to close at 3,281 on Tuesday. Short-term fears surrounding the global economy could bring the index much lower, but there is nothing to be worried about.
The reason is because stock market declines allow one to purchase shares in fundamentally strong companies on the cheap. To know which stocks to buy during a market crash, you can arm yourself with a shopping list of the stocks that you like.
In my list, I have three blue-chip companies. They are (in no particular ranking): 1) CapitaLand Mall Trust (SGX: C38U); 2) Singapore Technologies Engineering Ltd (SGX: S63); and 3) Thai Beverage Public Company Limited (SGX: Y92). In this article, I will discuss the reasons why I like those companies.
Company 1: CapitaLand Mall Trust
CapitaLand Mall Trust is Singapore’s first and largest retail real estate investment trust (REIT) with prominent shopping malls located near MRT stations.
I like the REIT for the strategic location of its shopping malls. The proximity of the properties to bus interchanges and train stations allows shoppers to quickly buy their necessities and head back home after a long day of work, instead of waiting for their purchases from online shops. CapitaLand Mall Trust is also introducing refreshing retail concepts at the new Funan and has innovative loyalty programmes to bring in the shoppers.
In a land-scarce Singapore, CapitaLand Mall Trust should do well.
Company 2: Singapore Technologies
Singapore Technologies is a global technology, defence and engineering conglomerate specialising in the aerospace, electronics, land systems and marine industries.
I like the company for its vast global network which covers 44 cities across 22 countries. It has a wide range of customers from the defence, government and commercial segments.
Another aspect to like about Singapore Technologies is that it is able to provide “smart city solutions in the areas of autonomous mobility, public and cyber security, smart sensor networks, data and video analytics, environmental engineering and robotics”.
According to Orbis Research, the global smart cities market is forecast to reach US$1.9 trillion by the end of 2023, with a compounded annual growth rate of 24.2% from 2018 to 2023.
Company 3: Thai Beverage
Thai Beverage is a prominent beverage company in Southeast Asia and the largest of its kind in Thailand.
As mentioned in an earlier article here, I admire Thai Beverage for the “various leading beverage brands that it owns, its extensive distribution network, international presence in more than 90 countries, and the growth potential it has in the years ahead”.
However, I’m wary of the company’s debt-laden balance sheet. Thai Beverage’s gearing ratio was 1.88 as of 31 March 2018, a massive increase from 0.47 as of 30 September 2017.
If the next market crash brings Thai Beverages’ shares to an enticing valuation and the company can bring its gearing ratio to a more manageable level, I would be interested.
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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 Mall Trust.