Despite a poor performing 2020 relative to other major indexes around the world, the Straits Times Index (STI) has been one of Asia’s best performing indexes in 2021 so far, with a year-to-date return of about 9%. It has also outperformed major U.S. indexes such as the S&P 500 and the NASDAQ 100. You can read more about the performance of the STI in an SGX Market Update report.
The rise in the STI over the past couple of months has been supported by the performance of many companies that are components of the STI. These include the three local banks – DBS (up 11.7% in 2021), OCBC (up 16.2% in 2021) and UOB (up 12.8% in 2021) – all of whom have done well in 2021 thus far.
Banks are not the only companies on the STI that have performed well in 2021. In this week’s edition of 4 Stocks This Week, we look at 4 of the best performing stocks on STI to date.
Singapore Airlines (SIA) (SGX: C6L)
If you are surprised to find that Singapore Airlines (SIA) (SGX C6L) is on this list, you won’t be the only person.
After an abysmal 2020, SIA share price has gone up about 34% since the start of 2021. This gain was recorded mainly over the past month, as SIA share prices went up from $4.35 (19 Feb 2021) to $5.70 (19 Mar 2021), supported in anticipation that world travel will resume sooner rather than later as vaccinations are rolled out. It’s also an uplift for the company and its shareholders after seeing share price slump to a low of $3.39 on 30 Oct 2020.
Last month, SIA reported a loss of $142 million for 3Q2020/2021. This brings its year-to-date loss for its financial year 2021/2021to $3.61 billion. Having done a fundraising exercise in 2020, the company currently has total cash and cash balance of $7.1 billion.
Jardine Strategic (SGX: J37)
Jardine Strategic (SGX: J37) is a listed company that owns shares in other listed companies such as Jardine Cycle & Carriage, Hongkong Land and Dairy Farm. It’s 85% owned by Jardine Matheson (SGX: J36), which ironically is also an investment holding company that is part of the STI. It can be confusing even for us sometimes.
Jardine Strategic share prices have done well in 2021, with its share prices up about 35%, from US$25.00 on 4 Jan 2021 to US$33.87 as of 19 Mar 2021.
This was also boosted by an acquisition offer of US$33 per share made by Jardine Matheson to acquire 15% of the shares that Jardine Matheson, or its wholly-owned subsidiaries, do not already owned in Jardine Strategic.
Prior to the acquisition offer announcement that was made on 8 Mar 2021, Jardine Strategic was trading at US$27.45.
Hongkong Land (SGX: H78)
Hongkong Land (SGX: H78) is also part of the Jardine Group, with more than 50% of its shares owned by Jardine Strategic. Hongkong Land is primarily involved in the property development business as it owns and manages offices and luxury retail properties in Hong Kong, Singapore, Beijing and Jakarta. In fact, some of us may have even bought condominium units from its Singapore subsidiary MCL Land.
Last week, the company released its FY2020 results. Profits for the company fell 11% to US$963 million. This comes as no surprise, given that COVID-19 has impacted many property developers, including Hongkong Land.
After hitting a low of US$3.64 back in May 2020, Hongkong Land share price is slowly recovering. For 2021, its share price is up about 20%, from US$4.11 (4 Jan 2021) to US$4.95 (19 Mar 2021).
Yangzijiang (SGX: BS6)
At the start of the year, we wrote about how Yangzijiang (SGX: BS6) was one of the growth companies to look out for in 2021. Since then, the company has done very well, with its share price increasing by about 26% in 2021, from $0.97 (4 Jan 2021) to $1.23 (19 Mar 2021).
With its main business in commercial shipbuilding, the COVID-19 pandemic has slowed down business for the company. However, with borders reopening, Yangzijiang may be in a prime position to pick up more contracts as economic activities resume.
In its FY2020 result announcement, Yangzijiang reported a 17% growth in net profit in 4Q2020 compared to 4Q2019 thanks to a better gross profit margin.
For FY2020, the company announced a profit of RMB 2.51 billion, about 19% less than its FY2019 profit of RMB 3.10 billion. This is despite total revenue declining by about 37% in FY2020 compared to FY2019.
As Singapore moves towards a post-COVID-19 world, there will be investment opportunities for Singapore investors to capitalise on if we can identify the right companies to invest in. However, while things are certainly looking brighter, we still need to remain vigilant, both in watching out for our health and the investments we make.
Top image by Raymond Quek
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.