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The Singapore Stock Market Today: New Corporate Bond ETF Launched

Welcome to a brand-new week, everyone. Here are three things about the local stock market that you might be interested in today.

1. The Straits Times Index (SGX: ^STI) ended Monday at 3,225.6, up 0.4%, or 12.6 points.

The best performer of the index was Sembcorp Industries Limited (SGX: U96). The conglomerate’s shares rose 2.5% to S$2.88 apiece.

Last week, Sembcorp announced that its power plant in India, Sembcorp Gayatri Power Limited, had won a competitive tender held by the Bangladesh Power Development Board to supply 250 megawatts of power to Bangladesh for 15 years.

On the other hand, StarHub Ltd (SGX: CC3) was the biggest loser with its shares dropping 1.8% to S$1.63 each.

2. Two days ago, Micro-Mechanics (Holdings) Ltd (SGX: 5DD) made public its financial results for the twelve months ended 30 June 2018 (FY2018).

For the latest period, revenue grew 13.8% year-on-year to S$65.1 million while net profit improved 16.1% to S$17.1 million.

Chris Borch, Micro-Mechanics’ chief executive, commented on the results:

“The Group witnessed higher sales in our major geographical markets during FY2018, particularly in China, the USA and Philippines. As China continues to develop into a major center for global chip manufacturing, the Group remains focused on strengthening the operations in Suzhou to ensure fast, effective and local support to our customers. As a result of these efforts, we have benefited from multi-year sales growth in China.”

To reward shareholders, Micro-Mechanics has proposed higher dividends for the fourth quarter of 2018, comprising a final dividend of five cents per share and a special dividend of one cent per share. Together with the interim dividend of four cents already paid out, the total dividend payout for the year would be 10 cents, up from eight cents last year. For our coverage of the FY2018 earnings, you can click here.

Micro-Mechanics shares ended the day at S$1.84 apiece, up 1.1%.

3. The first exchange-traded fund (ETF) that gives investors access to a basket of Singapore dollar-denominated, investment grade corporate bonds was listed today on the local stock exchange.

The Nikko AM SGD Investment Grade Corporate Bond ETF (SGX: MBH), as it is called, aims to replicate the performance of the iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index, providing exposure to more than 100 corporate bonds issued by over 50 high-quality issuers.

Eleanor Seet, president of Nikko Asset Management Asia, the ETF manager which launched the fund, said:

“The warm reception reflects the appetite for a high quality asset class. Importantly, this ETF provides diversification and accessibility at a low cost, which I believe investors recognise. With greater and ease of access to SGD-denominated bonds, we hope to see even more participation in the Singapore bond market.”

The ETF closed at S$1.002 today.

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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 Micro-Mechanics (Holdings) Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Sembcorp Industries Limited and Micro-Mechanics (Holdings) Ltd.