The Straits Times Index (STI) is comprised of 30 of the largest and most liquid companies listed on the Singapore Exchange (SGX). Account for nearly 80% of the entire value of all listed companies on the SGX, the STI is commonly referred to as Singapore’s benchmark or market return.
We can gain exposure to the STI by investing in one of the two STI ETFs listed on the SGX. With one investment decision, we become broadly diversified to 30 high quality companies and will earn the Singapore market return.
How Did The STI Perform In Q1 2021?
While many of us may be attracted to invest in U.S. or Chinese companies, the STI has been no slouch in 2021. According to SGX, the STI delivered a world-leading return of 11.1% in the first quarter of 2021.
This was the best start to a calendar year since 2012. Furthermore, gains were also quite evenly spread out, with as many as 11 of the STI stocks delivering double-digit returns.
Since the report came out on 26 March 2021, the STI has gained another 1.4% in just over a month, to end at 3201.76 as of 16 April 2021.
Changes To The STI In 1Q 2021
The STI is reviewed on a quarterly basis, and this is when companies may be added to and deleted from the STI based on the requirements. In 1Q 2021, Jardine Strategic Holdings (JSH), announced plans for consolidation into Jardine Matheson Holdings (JHM) which already held 85% of the JSH shares. This came into effect from 15 April 2021.
Being part of the STI, JSH was replaced with Frasers Logistics and Commercial Trust (FLCT). JMH is also an STI constituent, and will remain so after the consolidation exercise.
This was not a sudden decision as there are 5 companies on the STI reserve list, and the largest by market capitalisation will replace the counter that becomes ineligible.
- Frasers Logistics and Commercial Trust (FLCT) (SGX: BUOU) [has since been included in the STI]
- Frasers Centrepoint Trust (FCT) (SGX: J69U)
- Suntec REIT (SGX: T82U)
- Keppel REIT (SGX: K71U)
- Netlink NBN Trust (SGX: CJLU)
As we can see, all 5 stocks on the STI reserve list are REITs and business trusts. This is in addition to the 6 already listed on the STI currently.
How The Individual STI Stocks Fared In 1Q 2021?
|Straits Times Index (STI) Constituents||Index Weight||Dividend Yield*||Total Return In 1Q2021**|
|DBS Group (SGX: D05)||16.31%||3.0||14%|
|OCBC (SGX: O39)||12.83%||2.7||17%|
|UOB (SGX: U11)||10.59%||2.98||14%|
|SingTel (SGX: Z74)||6.27%||4.1||6%|
|Jardine Matheson Holdings (JMH) (SGX: J36)||5.66%||2.7||22%|
|Wilmar International (SGX: F34)||3.60%||2.4||17%|
|Ascendas REIT (SGX: A17U)||3.55%||4.1||2%|
|CapitaLand Integrated Commercial Trust (CICT) (SGX: C38U)||3.44%||3.3||0%|
|CapitaLand (SGX: C31)||3.08%||2.4||17%|
|Keppel Corp (SGX: BN4)||2.81%||1.8||-3%|
|Singapore Exchange (SGX) (SGX: S68)||2.78%||3.0||8%|
|Thai Beverage (SGX: Y92)||2.63%||2.5||0%|
|Hongkong Land (SGX: H78)||2.31%||4.4||26%|
|Jardine Strategic Holdings (JSH) (SGX: J37)
[Deleted from STI from 13 April 2021]
|Singapore Technologies Engineering (ST Engineering) (SGX: S63)||2.13%||3.8||1%|
|Mapletree Logistics Trust (MLT) (SGX: M44U)||2.03%||3.9||-3%|
|Singapore Airlines (SIA) (SGX: C6L)||1.99%||1.0||29%|
|Venture Corp (SGX: V03)||1.84%||3.7||3%|
|Genting Singapore (SGX: G13)||1.80%||1.1||7%|
|Mapletree Industrial Trust (MINT) (SGX: ME8U)||1.72%||3.7||-4%|
|Mapletree Commercial Trust (MCT) (SGX: N21U)||1.70%||3.0||-1%|
|UOL Group (SGX:||1.38%||1.9||2%|
|City Developments (SGX:||1.36%||1.0||-1%|
|ComfortDelGro (SGX: C52)||1.25%||1.0||3%|
|Keppel DC REIT (SGX: AJBU)||1.24%||1.8||-2%|
|SATS (SGX: S58)||0.92%||1.4||8%|
|Yangzijiang Shipbuilding (SGX: BS6)||0.73%||3.5||34%|
|Jardine Cycle & Carriage (Jardine C&C) (SGX: C07)||0.71%||2.5||16%|
|Dairy Farm International (SGX: D01)||0.60%||3.9||9%|
|Sembcorp Industries (SGX: U96)||0.57%||2.1||8%|
|STI Reserve List|
|Frasers Logistics & Commercial Trust (SGX: BUOU)
[Added to STI from 13 April 2021]
|Keppel REIT (SGX: K71U)||–||5.1***||13%|
|Suntec REIT (SGX: T82U)||–||4.1||7%|
|Frasers Centrepoint Trust (FCT) (SGX: J69U)||–||3.6***||0%|
|Netlink NBN Trust (SGX: CJLU)||–||5.3||-2%|
* From SGX Stock Screener (16 April 2021)
** From SGX report (26 March 2021)
*** From company website
5 Best Performing STI Stock In 1Q 2021
The STI was one of the best performing global stock markets in 1Q 2021. This was led by stocks that delivered double digits returns during the quarter.
Here’s the 5 best performing stocks in 1Q 2021:
- JSH (36%)
- Yangzijiang (34%)
- SIA (29%)
- Hongkong Land (26%)
- JMH (22%)
The top 5 stocks on STI delivered a return that was more than double what the STI itself achieved.
However, we should read into this with a pinch of salt as some of the counters may have been lagging due to COVID-19 uncertainties and have recently surged on the back of better news – that Singapore is easing work-from-home arrangements and restarting talks to re-open our borders.
For example, SIA and Hongkong Land were some of the most affected counters in 2020. SIA has recovered 29%, however, its current share price is still over 40% down from the start of 2020 (pre-COVID-19). Similarly, Hongkong Land’s share price is still over 13% down from the start of 2020.
5 Worst Performing STI Stock In 1Q 2021
While the STI was one of the best performing indexes globally, it doesn’t mean that all companies on the STI were winners during the first quarter. This also underscores the importance of diversification.
- Mapletree Industrial Trust (-4%)
- Mapletree Logistics Trust (-3%)
- Keppel Corp (-3%)
- Keppel DC REIT (-2%)
- City Developments / Mapletree Commercial Trust (-1%)
These stocks may seem like they are underperforming. However, just like the argument that certain stocks are catching up as we see the light at the end of the COVID-19 tunnel, some of these stocks may be “taking a breather”.
For example, Mapletree Logistics Trust and Keppel DC REITs were some of the better performing counters on STI in 2020. Shares of both Mapletree Logistics Trust and Keppel DC REIT are above their pre-COVID-19 prices by 14% and 29% respectively.
Cover image credit: Raymond Quek
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