This week, news broke that big-name furniture and electronics retailer Courts Asia will be delisted from SGX after its acquisition by Nojima Asia Pacific, who would own 90.07% of Courts Asia, thus causing it to not fulfil the free float requirement to remain public.
This comes after last month’s news that Singapore’s third largest telco, M1, will also be delisted, following its acquisition by a joint venture between Keppel Corporation and Singapore Press Holdings.
One advantage of investing based on indices like the Straits Times Index (STI) is that it is self-regenerating.
Index constituents are periodically reviewed (quarterly, in STI’s case) and reconstituted if particular stocks no longer qualify to remain on the index or are delisted. This process is done automatically and requires no input from investors.
The STI is often used as a proxy for the broader Singapore stock market, consisting of the 30 largest and most liquid blue chip companies on the Singapore Exchange (SGX). These 30 companies account for more than 70% of the market capitalisation of the entire SGX.
The next 5 largest and most liquid SGX stocks will make up the STI Reserve List, which is used in the event a STI stock is delisted or some other conditions is fulfilled that warrants the stock’s removal from the index.
The STI Reserve List currently consists of Keppel REIT, Mapletree Commercial Trust (MCT), Mapletree Logistics Trust (MLT), Mapletree North Asia Commercial Trust (MNACT), and Suntec REIT.
All 5 counters on the STI Reserve List are REITs, and they averaged a 13.4% total return in 2019 year-to-date.
For this episode of 4 Stocks This Week, we will be looking at 4 of the members of the STI Reserve List.
Keppel REIT (SGX: K71U)
Listed in 2006, Keppel REIT has approximately $8.5 billion worth of assets under management, comprising interests in 9 office assets (completed and under development) strategically located in the central business districts of Singapore, as well as in Australian cities of Sydney, Melbourne, Brisbane and Perth.
Its Singapore assets in include Ocean Financial Centre (99.9% interest), Marina Bay Financial Centre (one-third interest), One Raffles Quay (one-third interest) and Bugis Junction Towers (100% interest).
With assets under management worth around $8 billion, Keppel REIT is also on the STI Reserve List. It has a portfolio consisting of premium office assets in Singapore and key Australian cities like Sydney, Melbourne, Brisbane and Perth.
Keppel REIT is managed by Keppel REIT Management Limited, a wholly-owned subsidiary of Keppel Capital Holdings Pte Ltd. It closed this week at $1.23.
Mapletree Commercial Trust (SGX: N2IU)
Mapletree Commercial Trust (MCT) is a Singapore-focused REIT with a portfolio anchored by five key office and retail properties: VivoCity, Mapletree Business City I, PSA Building, Mapletree Anson and Bank of America Merrill Lynch HarbourFront. These assets have a net lettable area of 3.9 million square feet, and have a total book value of $6.68 billion.
Unsurprisingly, the largest shareholder in MCT is Temasek Holdings, which has 34.83% of shares.
MCT closed at $1.8 this week.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust (MLT) is the first Asia-focused logistics REIT in Singapore and was listed on SGX in 2005.
MLT has a portfolio of 135 logistics assets in Singapore (49), Hong Kong (9), Japan (20), Australia (9), South Korea (11), China (20), Malaysia (14) and Vietnam (3), with a total book value of more than $6.5 billion.
Temasek is the largest single shareholder of MLT, owning 30.52% of shares. MLT closed this week at $1.40.
Mapletree North Asia Commercial Trust (SGX: RW0U)
Formerly known as Mapletree Greater China Commercial Trust (MNACT), the Mapletree North Asia Commercial Trust (MNACT) owns and manages commercial properties in prime locations in the People’s Republic of China, Hong Kong SAR and Japan.
It’s portfolio properties include Gateway Plaza in Chaoyang District, Beijing; Sandhill Plaza in Pudong New Area, Shanghai; Festival Walk in Kowloon Tong, Hong Kong; as well as six commercial buildings across Japan.
Temasek Holdings owns 31.87% of the shares in MNACT, which closed this week at $1.28.
Invest in the Best ETFs at FSMOne.com!
With more than 2,200 ETFs available on FSMOne.com, selecting suitable ones may not be easy. We have curated a list of 40 ETFs on our ETF Focus List that can be the starting point for you. Start building your profitable portfolio today!
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.