The financial crisis that struck in 2008 still reverberates today. The global economy just hasn’t seemed like it fully recovered with several mini-crises occuring as a direct or indirect result from that fateful episode.
The stock market, and in particular, the Straits Times Index (STI), which plunged over 60%, has likewise, never really recovered. On 8 October 2007, the STI was at a historical high of $3,857.25 and on 2 March 2009, just one and a half years later, it was at $1513.12, less than half of its value.
Today, the STI is trading at around $2923.54. This would mean that anyone who bought stocks at its historical highs would still be sitting on losses. But there are certain stocks that have emerged from the crisis stronger and are trading higher than it was before the crisis in 2008 hit.
Below are three stocks that are components of the STI that we think are stronger today than when the STI was at its historical highs.
1. Ascendas REIT
Ascendas is a business space and industrial REIT and has $9.4 billion worth of properies under its management.
In October 2007, Ascendas REIT shares were worth $1.380. In March 2009, it was worth $0.765. It lost about 45% of its value between STI’s historical high and lows in 2007 and 2009 respectively.
Today, Ascendas REIT trades at $2.50 per share. This can be attributed, mostly, to its ability to acquire attractive properties, upgrade its existing properties and issue bonds at low interest rates because of its backing of high quality properties. Ascendas REIT has also placed out shares to strong backers and usually at good prices which have supported its share price increases over the years.
Since 2009, Ascendas has extended its portfolio by 43 properties, grown its footprint in Singapore as well as expanded into Australia and China. During the same time, it has grown its revenue and profitability by 131% and 66% respectively. It was also added to the STI which tracks the biggest and strongest stocks in Singapore in 04 June 2015.
This stock has grown from strength to strength since the Great Financial Crisis in 2008. This does not take into account that it distributes dividends regularly. Within regards to current prices, its dividends per annum amount to approximately 4.4%.
SingTel is Singapore’s largest telecommunications company offering mobile, internet, TV and enterprise solutions.
In October 2007, SinTel was trading at $2.805 and in February 2009, it was trading at $1.790. This represented a drop of over 36%.
Today, Singtel is trading at about $3.970. This is because the management has been able to maintain is market leader position in Singapore, as well as gain inroads into regional markets.
In 2009, it collected a revenue and profit of $14.9 billion and $3.5 billion from its Singapore, Australia and Regional markets which include India, Indonesia, Philippines, Thailand, Bangladesh and Pakistan. In 2015, it has grown its revenue and profit levels to $17.2 billion and $3.8 billion. In addition, it has strengthened its operations by expanding into the African telecommunications market as well as grown its digital and enterprise solutions business across Asia.
Besides retaining market share in Singapore and gaining inroads into regional markets, SingTel has been growing its digital and enterprise business aggressively. Also, with regards to current share prices, SingTel offers a 4.4% annual dividend return.
ThaiBev provides spirits, beer, non-alcoholic beverages and food products to mainly Asian markets.
In October 2007, ThaiBev was trading at $0.182, and by March 2009, its shares had declined to $0.125. Today, shares of ThaiBev are trading at $0.72.
In 2009, ThaiBev was delivering sales and earnings of $108 billion Thai Baht (THB) and $11 billion THB respectively. In 2015, it increased its sales and earnings to $181 billion THB and 26 billion THB.
ThaiBev acquired a Chinese distillery, Singapore’s Fraser and Neave and a leading beverage manufacturer and distributor in Thailand, growing its footprint in the international market. Over the years, it also expanded its focus into non-alcholic beverages and food businesses.
Based on today’s prices, ThaiBev offers a dividend return of 3.4% per annum.
In conclusion, there are many stocks in the market that continue to outperform the market. These are usually businesses that have solid fundamentals, good management and clear-cut strategies to growth.
Finding these companies is tough, and sticking with these companies through tough times is even tougher. That is why more and more companies are reaching out to investors and shareholders to keep them engaged and aid them to understand the management’s strategies.