Located in heart of Asia, Singapore is a country that is quite unlike its neighbours. However, though lacking in its environs’ natural resources, it remains one of the most competitive economies in the region thanks to its well-established business infrastructure, as well as its location. These have served to peak investor interest, making the country the region’s international trade hub, as well as a centre of air transport and shipping. The city-state is also considered one of the freest economies in the world, only lagging behind Hong Kong and is thus generally viewed as a great destination for investors in the world over.
So far, this year, the Singapore stock market has seen various high points, with most of its major sectors riding the wave of momentum that they gathered in 2017. Whether we are talking about the blue-chip sector or the small and mid-capitalisation companies, investors that have bought into Singapore have definitely had something to smile about this year.
Small to Mid-cap stocks
Major small and mid-cap companies saw a great start in the year 2018, especially in the manufacture, and healthcare sectors. These companies have been a good buy for interested investors looking to buy into stocks with large growth potential in coming years. Though they do come with a greater risk of collapse than the blue-chip companies, these stocks have proved to be quite profitable in this bullish market.
The manufacturing industry rode its wave of positive inertia into 2018 resulting in growth in all manufacturing sub-segments, especially with regards to electronic manufacture. Valuelectronics Holdings Limited is a good example of the growth experienced in the manufacturing sector. Not only has the integrated electronics manufacturer maintained its 2017 boom, but it has also been serving its shareholders with uninterrupted dividend pay-outs as well as the promise of bonuses. Another company riding this wave is Manufacturing Integration Technology Limited, who took advantage of its 85% growth in 2017 to move into 2018 full throttle. Its contracts with reputable multinational companies has led to increase orders thus spurring the growth of the small cap company this year.
Aside from electronics manufacture, the healthcare industry as well has seen a significant growth over the past year, in the world over, and Singapore is no exception. Healthcare related companies such as Top Glove and Riverstone have had fantastic runs this year. Top Glove Corporation, for example, planned to acquire Aspion, a prominent glove production company, with the aim of boosting production and thus spurring the world’s largest glove producer to further growth as 2018 goes on by. Other healthcare companies riding the growth tailwind include Q&M Dental Group, and Raffles Medical Group which aims to expand its reach to China in 2019.
Blue chip stocks
Even as the small and mid-cap companies have experienced a bullish 2018, one cannot disregard the blue-chip companies of the Singapore Stock Exchange. These more mature companies, which include major banks, companies that deal with property, and consumer products manufacturers, continued to show us why they make up the lion’s share of the stock market capitalisation.
Singapore’s banking sector has shown stability over the past year with banks such as DBS topping the charts. With its low cost to income ratio and its expected loan growth of 7% over the next year, investors have experienced an increase in dividend earnings as well as a bonus in 2018. OCBC bank has also shown aggressive growth over the past year. With the continued expansion of its net interest margins, the stocks are experiencing significantly improved financial performance.
Property stocks have also seen a boost with companies such as CapitaLand Limited consistently showing bullish behaviour. With its China malls divestment and buying into Pearl Bank apartments in Chinatown, it has ensured that the company maintains its momentum throughout 2018. City Development Limited and UOL Group Limited have also maintained great promise throughout the first half of 2018 in the residential and commercial property sectors respectively.
When talking on blue chip companies’ stocks in Singapore, the consumer product sector is one that is impossible to overlook. Companies such as Venture Corporation and SATS have, in time, offered higher dividend pay-outs to their investors. The increase in the buying power of the population has generally led to a growth amongst consumer type companies. That, as well as increased innovation on various fronts such as electronics, has greatly enhance the value of these companies.
As you can see, the Singapore market has seen significant growth over the first half of 2018. Many investors in the world over, will be looking on to see how long this winning streak can be maintained and just how much is to be gained by investing in these offshore shares.