In our first part of this article, we covered listed companies ranked 10 to 6 that owns pretty much everything in Singapore. To many, the list would not have been surprising once they understood the business and the scale of operations these companies own.
A lot of people, before they get started investing, may liken it to talking a punt or stabbing in the dark. By seeing these businesses playing an integral part of Singapore’s economy, new investors can start to understand the strength of these companies, and recognise that investing is nothing like gambling.
#5 Singapore Airlines (SIA)
It is a well-known fact that Singaporeans love travelling – we never need to be asked twice to spend our long weekends shopping in neighbouring cities, recharge our energies on Thai beaches or experiencing life in Europe.
According to a report by Visa, Singaporean households are expected to double their international travel plans to the tune of US$44.9 billion by 2025. If one airline is going to reap the most benefit from more Singaporeans travelling, it is most likely going to be SIA.
With a market capitalisation of $13.0 billion, SIA operates the country’s flagship carrier Singapore Airlines as well as SilkAir, Scoot and Tiger Airways. In addition to this, it also owns over 77.5% ownership in SIA Engineering as well as SIA Cargo, which contributed close to 30% of its 3rd quarter operating profit in its latest 2016-17 results.
In 2016, SIA also launched a pilot training joint venture with Airbus. It also has several other operational and non-operational partnerships with other airlines including NokScoot with Nok Air, Virgin Australia and Tata SIA, as well as several other engineering-related companies.
#4 CapitaLand Limited
CapitaLand, at a market capitalisation of $15.6 billion, is one of Asia’s largest real estate companies. Out of its headquarters in Singapore, it owns and manages a global portfolio worth more than $78.0 billion.
This includes operations in Singapore where it owns many major malls and office buildings within its two REITs – CapitaLand Mall Trust and CapitaLand Commercial Trust. This means many of the malls you frequent on the weekends or even those you work at or visit for business on weekdays could be owned by the company.
CapitaLand Mall Trust owns 16 malls in Singapore, including Bugis Junction, Plaza Singapura, Raffles City Singapore, Junction 8 and others scattered across the island. It also owns a 14.1% stake in CapitaLand Retail China which has 11 malls in China.
CapitaLand Commercial Trust owns 10 office buildings in Singapore, including some in the Central Business District such as Capital Tower, Six Battery Road, One George Street, Raffles City Singapore, Twenty Anson, HSBC Building and Golden Shoe Car Park. In addition, it owns a 17.7% stake in MRCB-Quill REIT, with 11 commercial properties listed in Malaysia.
That’s not all, it also owns the Ascott Limited which has over 22.2% stake in the Ascott Residence Trust. The Ascott Residence trust owns over 90 properties in 14 countries, including three in Singapore – Ascott Raffles Place Singapore, Citadines Mount Sophia Property Singapore and Somerset Liang Court Property Singapore. And it also owns StorHub, a leading self-storage brand with 11 facilities in Singapore.
Moreover, CapitaLand owns CapitaLand China and Capitaland Invest Management, which manages its properties, as well as has regional investments in Vietnam Indonesia, Japan and others. It also owns CapitaLand Singapore, which, besides owning a substantial stake in CapitaLand Mall Trust, owns substantial stakes in CapitaLand Malaysia Mall Trust and CapitaLand Retail China Trust.
Also Read: How REITs In Singapore Performed In 2016
This means you would very likely have come into contact with the brand even when you have been travelling in neighbouring Asian countries.
#3 Oversea-Chinese Banking Corporation Limited (OCBC) and United Overseas Bank Limited (UOB)
We use banking services on a daily basis, whether it is for expenses, via ATM and credit cards, investments, via brokerage, insurance and private wealth services, servicing our loans, due to our homes, education and personal needs, as well as simply crediting our salaries from our jobs.
In number three, we had a toss-up for which of the two other Singapore banks we should feature. In the end, we surmised that it would not be fair to leave either out. (Our list should have included 11 companies rather than 10.)
OCBC slightly edges UOB in terms of market capitalisation, with the former at $44.3 billion while the latter is at $39.5 billion. In terms of revenue, OCBC too is a shade past UOB at $2.1 billion versus UOB’s $2.0 billion.
Apart from its banking functions, OCBC owns listed insurer Great Eastern, it also provides investment services via OCBC Securities, taking care of brokerage services, and Bank of Singapore, taking care of private wealth management. OCBC also owns a stable of properties in Singapore.
Elsewhere, the bank is also making waves in the region, with 50% of its profits derived from outside of Singapore. In 2016, Malaysia (19%), Indonesia (5%), Greater China (22%) and other regions (4%), contributed to its remaining profit.
Similar to OCBC, UOB also owns a listed insurer, in the form of United Overseas Insurance Limited, or UOI. It too has private wealth banking capabilities, under various UOB companies, and brokerage services, under its UOB Kay Hian brand. It too owns a property firm to hold its various properties as well as a travel planning agency.
Reflecting its overseas businesses, it stated in its 2016 annual report that 56% of its loans base is derived from Singapore. This approximately translates to half its business being derived from outside Singapore.
#2 DBS Group Holdings
Having covered OCBC and UOB, we cannot leave out DBS, with a market capitalisation of $53.2 billion, the biggest of the three local banks in Singapore.
DBS also provides similar services to the other banks in Singapore. However, it focuses more on its commercial banking and stock brokerage services, under its Vickers brand. The group also offers private banking solutions under its DBS brand.
It also has a property arm that owns, operates and develops real estate in Singapore. It is also a major shareholder of AXS Pte Ltd, which offers payment services terminal across Singapore. However, unlike its peers, it works with Manulife to offer insurance services.
#1 Singapore Telecommunications Limited (SingTel)
SingTel is the largest capitalised company on this list, with a total market value of $60.6 billion. Telecommunications is another service we cannot live without in Singapore. Any outage in signals usually translate to public irritation and venting on social media.
Calling, texting, surfing the internet, in which it intends to IPO NetLink Trust, watching television programmes is what we consumers think about when we hear articles mention SingTel and the other telecommunications companies. However, these companies also run the country as all the other businesses in Singapore also require this service to carry out their operations.
SingTel has roughly 50-60% of the market share in Singapore. Apart, from its telecommunications business, it also owns digital businesses such as restaurant review site, HungryGoWhere, mobile advertising company, Amobee, and data analytics firm, DataSparks. Further, it also has a 22.9% stake in Singapore Post, the largest postal service provider in Singapore.
Apart from this, the company has a strong foothold in telecommunications in many territories around the world, including Australia, Thailand, India, Philippines, Indonesia and 17 countries in Africa.
Investing In The Top 10 Companies In Singapore
There you have it, the top 10 (11 actually) companies in Singapore, and with a strong Singapore presence that you can invest in.
While they may not provide a 100% guarantee great returns, you can see that investing in them is far from gambling. The best way to get invested in these companies, and other strong companies can be through the Straits Times Index (STI) Exchange Traded Fund (ETF).
Bonds and Fixed Income