For investors following the Singapore Exchange (SGX), there are a few benchmark indexes that are commonly used as proxies to how well the Singapore stock market is performing.
The most popular index is the Straits Times Index (STI), which is made up of 30 of Singapore’s best and biggest companies. As we have written about in the past, the STI is a good place to get started if you want to invest in the SGX.
Beyond that, other benchmark indexes include the FTSE ST All-Share Index, which represents the stocks that account for 98% of the market capitalisation on SGX. The FTSE ST All Share index is the aggregation of the FTSE ST Large, Mid and Small Cap indexes.
But what about stocks that are too small that they do not even meet the criteria for inclusion in the FTSE ST Small Cap index, and are hence, excluded from the FTSE ST All-Share Index? Well, these stocks are part of the FTSE ST Fledging Index.
For 2017, the FTSE ST Fledging Index delivered a return of 21%. In comparison, the STI and FTSE ST All-Share saw a return of 22.1% and 21.8% respectively.
In this week’s edition of 4 Stocks This Week, we take a look into some of the most prominent stocks on the FTSE ST Fledging Index.
# 1 Creative Technology (SGX: C76)
We can’t possibly write this article without first starting off with Creative Technology. For those of you who don’t already know, the past few weeks have seen Creative Technology stock price soar to a 10-year high. Here’s a quick recap of what happened.
On 22 February 2018, Creative Technology closed at $1.25, a regular level it normally sees. It opened on 23 February at $1.46 and closed at $2.88, or more than double its closing price just 24 hours ago. It continued to surge to record levels not seen since 2007. Stock price as of 16 March is $6.62.
The price increase even led to a query from SGX on 23 February. You can read the company’s response to the query here.
Basically, what led to investors interest in Creative Technology was the announcement made by the company that it’s launching a new product – the Super X-Fi. The Super X-Fi, which is a dongle, essentially allows any headphones to have the same listening experience of a high-end multi-speaker system.
Or in our layman understanding, allowing your headphones to produce the same sound that you enjoy in movie theatres.
The Super X-Fi will be launched later this year at US$150. While the jury is still out on whether this new technology, which Creative Technology has spent US$100 million over the last 20 years to develop, will translate into financial performance for the company, it’s clear that investors are willing to pay a (huge) premium on the fact that it will be a gamechanger, both for Creative Technology and the audio technology world.
Since the start of the year, Creative Technology has posted a return of 518.7%.
# 2 AEM Holdings (SGX: AWX)
AEM Holdings is an investment company that provides solutions in equipment systems; and precision components and related manufacturing services for various industries. The company is also one of the best performers for 2017, with its stock price increasing from $1.227 (16 March 2017) to $7.47 (16 March 2018).
In terms of financial performance, the company saw its revenue more than tripled to $221 million, compared to $70 million the year before. Its net profit also increased to $31.4 million, from $4.7 million the year before. You can check out the company’s announcement on its FY2017 results here.
Since the start of the year, AEM stock price has continued its upwards trajectory and it has posted a gain of 125.4% for the year thus far.
# 3 Sunningdale Tech (SGX: BHQ)
Sunningdale Tech is in the industrial machinery space. The company manufactures and sells dies, tools, jigs, fixtures, high precision steel moulds, and plastic products. The company operates in four segments: Automotive, Healthcare, Consumer/IT, and Mould Fabrication.
For the past 12 months, the company stock price has increased by close to 30%, up from $1.56 (16 March 2017) to $2.01 (16 March 2018).
# 4 Tianjin Zhong Xin Pharmaceutical (SGX: T14)
A China-based company, Tianjin Zhong Xin Pharmaceutical produces and sells traditional Chinese medicines, western medicines, and healthcare products primarily in the People’s Republic of China. It is also involved in the manufacture and sale of biological products; wholesale and retail sale of medicines, biochemical pharmaceutical products, and daily use products; and operation of hospitals
With a current market capitalisation of $1.89 billion, it’s the biggest company within the FTSE ST Fledging Index, accounting for a weightage of 7.8% of the index.
Unlike the other three companies featured, Tianjin Zhong Xin Pharmaceutical saw a decline in its share price by 4.8% over the past 12 months. It’s currently trading at close to its book value (1.01).
The company share price is $1.217 as of 16 March 2018.
Investing In Companies On The SGX
If you are interested to read more about Singapore stocks, you can check out our extensive archive of articles of 4 Stocks This Week. To stay up to date with the latest news on the Singapore Exchange, you also can check out the SGX My Gateway Market Updates to get more insights.
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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.