2020 has seen a lot of volatility in the financial markets. To reiterate, we saw the end of the longest-running bull market in the history of the stock market, the fastest dive into a bear market – which saw global markets dipping close to 30% in a one-month period between end-February to end-March – and then swing into an unexpected bull market after that.
As Singapore is an open economy, the Straits Times Index (STI) tends to be more impacted than the global market. In the chart below, comparing the STI to the FTSE All-World Index, we can clearly see that the STI tends to follow global markets quite closely and spike and dip more than the global economy.
At the tail-end of the chart in 2020, we can also see that the decline in Singapore stocks was more pronounced earlier this year, while the upswing has not – compared to the global markets.
Against this backdrop, we look at 4 stocks that have been found to be “Low Volatility” in a Factor Research report, which was done in collaboration with the SGX.
Dasin Retail Trust (SGX: CEDU)
With a market capitalisation of $617 million, Dasin Retail Trust comprises seven retail malls in the Chinese cities of Zhongshan, Zhuhai and Foshan.
In the earlier part of the year, COVID-19 impacted its properties quite severely. In February 2020, its average monthly turnover rent dropped 63.9% from its 4Q2019 levels. This has gradually recovered to -9.6% as at June 2020. Today, this is likely to have recovered even further.
In the Factor Research report, Dasin Retail Trust topped the “Low Volatility” factor rankings, out of more than 100 stocks, including the STI stocks, for the 12 months ending 30 June 2020.
This translates into a decline of 4.2% for the year-to-date, to $0.80. This compares favourably to the STI, which has dropped 23.3% for the year-to-date. Its Net Asset Value (NAV) per Unit, as at 30 June 2020, was $1.37. Dasin Retail Trust also measured well in the “Growth”, “Size” and “Momentum” factors.
Bukit Sembawang (SGX: B61)
Incorporated in 1967, Bukit Sembawang is one of the pioneer property developers in Singapore. Today, it mainly has subsidiaries in the property development and property investment space.
In its latest FY2020 results release, in May 2020, the full extent of COVID-19 impact on its results was not yet apparent. In its responses to questions asked during its AGM, the company stated that it had to implement safe distancing measures and a range of precautionary measures. Nevertheless, its current target dates have accounted for possible delays and completion for its project remain on track.
In the Factor Research report, Bukit Sembawang was second on the list of “Low Volatility” in Singapore.
In the year-to-date, it has declined by 22.6%. This is slightly ahead of the STI’s 23.3% decline in the year-to-date. It also measured well in terms of “Growth” and “Quality” factors.
Bukit Sembawang has a market capitalisation of $945 million.
Haw Par Corp (SGX: H02)
Haw Par Corp has been listed on the SGX for more than 50 years, since 1969. Today, the group has a strong consumer healthcare business in Tiger Balm and others, with a geographic footprint spanning more than 100 countries. The group also has a leisure business in Thailand and has investments in property, as well as in UOB, UOL and United Industrial Corporation (UIC).
Coming in 3rd in the “Low Volatility” in Singapore, Haw Par Corp also measured well in the “Quality” and “Growth” factors.
Since the start of 2020, Haw Par has dipped 27.1%. This is slightly worse compared with the STI, which has only dipped 23.3%. Today, Haw Par Corp has a market capitalisation of $2.1 billion.
Wing Tai (SGX: W05)
Rounding off the top 4 stocks in the “Low Volatility” category was Wing Tai, a regional property developer listed in Singapore. Wing Tai has a market capitalisation of $1.3 billion and a NAV exceeding $4.0 billion.
In the Factor Research report, Wing Tai also measured well in the categories for “Momentum”. According to SGX, Wing Tai also had a net institutional inflow of over $28 million in the year-to-date.
Wing Tai’s share price has dipped 13.9% since the start of 2020, performing better than the STI’s 23.3% decline in value.
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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.