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

The Straits Times Index (SGX: ^STI), which tracks the performance of the top 30 largest and most liquid companies listed in Singapore, was in the red for June. For the month, the local stock market bellwether tumbled 4.7% to 3,268.7.

Of the 30 index components, four were in the green; one was flat while the remaining 25 were in the red.

The top three winners of the Straits Times Index were Jardine Strategic Holdings Limited (SGX: J37), Hutchison Port Hldg Trust (SGX: NS8U) and Jardine Matheson Holdings Limited (SGX: J36).Source: S&P Global Market Intelligence (stock prices for the above stocks have been converted to Singapore dollars from US dollars)

Jardine Strategic is a holding company with long-term strategic investments in multinational businesses. Jardine Strategic owns 58% of Jardine Matheson, the third-best performer in June, while Jardine Matheson has an 84% in Jardine Strategic.

For the first quarter of 2018, the firms updated the market that they have performed steadily during the period, with earnings almost unchanged from the same period a year ago. Their balance sheets, as at 31st March 2018, “remained strong with a modest increase in gearing since the prior year end”.

Both Jardine Strategic and Jardine Matheson will announce their financial results for the six months ended 30 June 2018 on Friday, 27 July 2018.

As for Hutchison Port, revenue and other income grew 3.5% year-on-year to HK$2.7 billion for the three months to 31 March 2018. However, profit attributable to unitholders of the trust tumbled by 12.9% to HK$145.4 million. Hutchison Port currently has one of the highest dividend yields among the Straits Times Index stocks.

On the other hand, the top three losers of the index were Venture Corporation Ltd (SGX: V03), StarHub Ltd (SGX: CC3) and CapitaLand Limited (SGX: C31).Source: S&P Global Market Intelligence

For the month of June, Venture’s shares fell some 16%. This is on top of the declining stock price in the prior months. With a price-to-earnings ratio of 12.3, the valuation is at a low not seen in many years. Venture’s shares have been hit in recent times by a short-sell report which suggested that Venture is too exposed to Philip Morris International, which produces the “heat-not-burn” tobacco product, IQOS.

At the end of last month, The Straits Times reported that StarHub would axe seven channels from Discovery Networks, following unsuccessful negotiations between the two companies. To replace the dropped channels, StarHub had secured seven brand new channels, and these will be added at no extra cost to customers.

For the telco’s first quarter ended 31 March 2018, revenue tumbled 4.7% year-on-year to S$561.0 million. The decline was mainly due to lower revenue from mobile and pay TV services, together with lower sales of equipment. Net profit crashed 14.9% to S$61.5 million.

In June, CapitaLand’s shares closed at S$3.16, just slightly higher than the 52-week intraday low price of S$3.11. In the final week of the month, CapitaLand Commercial Trust (SGX: C61U), which is sponsored by CapitaLand, said that it is selling Twenty Anson to an unrelated third party for S$516 million. The divestment is expected to be completed in the third quarter of this year.

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 a price-to-earnings ratio of 10.5 and had a distribution yield of 3% on 29 June 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 Commercial Trust. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Commercial Trust.