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SGX Market Updates

Author: SGX   |   Latest post: Thu, 2 Feb 2023, 9:02 AM

 

Manufacturing-related Stocks That Have Led Net Fund Flows Since 30 June

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  • The iEdge SG Advanced Manufacturing Index have has declined 4% in the 3Q22 to 7 Sep, while booking S$10 million of net institutional inflows. This has reduced the total return of the Index to 25%, which compares to 9% for the FTSE ST All-Share Index and 1% for the FTSE Asia Pacific Index.
     
  • The five Index heavyweights of the iEdge SG Advanced Manufacturing Index, NIO Inc, Venture Corporation, Wilmar International, Singapore Tech Engineering and Thai Beverage PCL comprise approximately half the Index weights. NIO reported its 2Q22 and 1H22 results after the 7 Sep close and gained 1% in the 8 Sep Morning Session.
     
  • With more than 100 constituents, the Index spans multiple sectors incl. Business Services, Consumer Cyclicals, Energy, Healthcare, Industrials, Non-Energy Materials, Consumer Non-Cyclicals, and Technology. This parallels Singapore’s manufacturing activity, which spans six clusters, with the Aug report scheduled for release on 26 Sep.  

Just as manufacturing represents a significant component of Singapore’s GDP and exports, stocks with manufacturing-related activity continue to maintain a significant role within the Singapore stock market through combined market value and daily traded turnover.

Overall, the stocks of the iEdge SG Advanced Manufacturing Index have seen net institutional inflows of close to S$10 million in 3Q22 through to 7 Sep, while the Index generated a decline of 4% in total return. Over the past 10 weeks, market risks has grown with global and regional geopolitical risks, faster than expected monetary policy tightening, and ongoing COVID containment risks. This has reduced the overall total return of the Index since the end of 2019 to 25%. Nonetheless, this is considered a highly competitive return throughout the past two years and eight months, with the Dow Jones Industrial Average generating a 22% total return, with the FTSE ST All-Share Index up by 9% and FTSE Asia Pacific Index up by 1%, using the same measure. 

Together the five Index heavyweights, NIO Inc, Venture Corporation, Wilmar International, Singapore Technologies Engineering and Thai Beverage PCL comprise approximately half the Index weights.

NIO Inc currently maintains the highest Index weight and is a designer and developer of high-performance electric vehicles, which commenced its secondary listing in Singapore on 20 May. From its 20 May close through to 7 Sep, the share price has gained 2.4% in SGD terms, while maintaining 90-day Annualised Volatility above 70%. The stock has averaged more than S$5 million in daily trading turnover, and liquidity has increased by 14% in the first 5 trading days of September compared to August levels. Best bid-ask spreads continued to narrow in August to 16 basis points (c.3 US cents) during Singapore and Hong Kong overlapping trading hours while top of book size averaged at US$28,000. On 7 Sep, NIO Inc reported 2Q22 vehicle sales were RMB 9,570.8 million (US$1,428.9 million), representing a 21% increase from 2Q21 and an increase of 3.5% from 1Q22. However, with higher cost of sales resulting from the expanded investment in power and service networks, 2Q22 gross profit decreased 15% from 2Q21. Looking forward, NIO’s Founder, Chairman and CEO noted that 2H22 is a critical period for NIO to scale up the production and delivery of multiple new products.

The 10 stocks of the Index that have seen the highest net institutional inflows for 3Q22 through to 7 Sep span multiple sectors including technology, industrials, consumer non-cyclicals and healthcare. Venture Corporation, UMS Holdings, AEM Holdings and Aztech Global span the Technology Sector. Sembcorp Marine, SATS, Marco Polo Marine and Dyna-Mac Holdings span the Industrials Sector. Also among the 10 are non-cyclical consumer play of Wilmar International and Healthcare play UG Healthcare Corporation.

 

10 Stocks of the iEdge SG Advanced Manufacturing Index with the Highest Net Institutional Inflows in 3Q22 to 7 Sep.

Code

Index Weight %

Price Change % QTD

Net Insti Flow QTD S$M

Price Change % YTD

Net Insti Flow YTD S$M

Total Return YTD

Venture Corp

V03

11

3.8

53.8

-5.7

-46.0

-2

Wilmar International

F34

10

-2.0

36.4

-4.3

84.8

-1

UMS Holdings

558

2

18.0

24.8

-13.8

-31.3

-12

Sembcorp Marine

S51

4

3.7

21.3

36.6

58.9

37

AEM Holdings

AWX

3

8.0

12.2

-15.0

-28.8

-14

SATS

S58

7

3.1

7.4

3.3

17.9

3

Marco Polo Marine

5LY

0.2

44.8

5.8

55.6

3.1

56

Aztech Global

8AZ

0.5

8.6

2.3

1.1

-8.0

7

Dyna-Mac Holdings

NO4

0.2

-11.2

1.7

109.9

2.4

110

UG Healthcare Corp

8K7

0.1

-4.5

1.0

-34.4

0.9

-34

Source: SGX (Data as of 7 Sep 2022). Stocks of the Index that booked the most net institutional outflows in 3Q22 to 7 Sep included Singapore Tech Engineering, Yangzijiang Shipbuilding Holdings, NIO Inc, Food Empire Holdings, Frencken Group, Thai Beverage PCL, Haw Par Corp, Delfi, Top Glove Corp Bhd and Sarine Technologies. For more information on the Index, click here.

 

During 3Q22, all majority of the 10 stocks provided either financial reports or business updates:

  • Of the S$54 million of net institutional inflow Venture Corporation booked in the 3Q22 through to 7 Sep, S$44 million of inflows flowed through following the company reporting its 1H22 results. Aside from reporting 1H22 net profit rose 24% YoY on 5 Aug, Venture Corporation’s management maintained that demand was expected to remain ‘unabated’ in 2H22. Specifically, the Group sees resilient demand across its diversified customer base, especially in the Life Science & Genomics, Healthcare & Wellness, Networking & Communications, Test & Measurement Instrumentation and Process & Test equipment in the semiconductor technology domains.  On 12 Aug, UMS Holdings reported 1H22 revenue surged 47% YoY, to its highest ever half yearly revenue, while AEM Holdings revenue increased 181% YoY, also delivering its highest half year revenue in its history. On 25 July, Aztech Global reported 46% YoY growth in revenue for 1H22.
     
  • On the Industrials side, on 22 July, SATS updated that its 1QFY23 (ended 30 June) revenue grew 36% YoY to S$375.5 million. On Aug 11, Dyna-Mac reported 1H22 revenue of S$124.0 million, which was 17% higher than 1H21, and Sembcorp Marine reported a lower net loss of S$143 million for 1H22 compared to a loss of S$647 million in 1H21 on 12 Aug. On 18 Aug, Marco Polo Marine reported is 3QFY22 (ended 30 June) revenue increased more than 130% YoY.
     
  • Wilmar International reported record net profit of US$1.16 billion for 1H22 on 4 Aug and on 25 Aug, UG Healthcare Corporation reported its FY22 net profit declined 69% to S$36.8 million, down from S$118.8 million in FY21, and compares to pre-COVID net profit of S$2.5 million in FY19.

Price performances of the 10 stocks have been more varied, with multiple sub-drivers at play, which is expected when it comes to a fleet of stocks that represent different sectors operating not across the region. On the macroeconomic side, on 29 July, business expectations of the manufacturing sector also found that within the local manufacturing sector, all clusters except the transport engineering and precision engineering clusters expect a less favourable operating environment in the next six months. EDB Singapore also reported last month reported that the transport engineering cluster expanded 18% YoY for the first seven months of 2022, ranking its YoY growth as the strongest of the key six clusters. On the other side of the manufacturing segments, EDB Singapore reported that the biomedical cluster decreased 5% YoY for the first seven months of 2022. The August report is due 26 Sep.

For investors and traders of the relevant stocks, how much these expectations are built into prices, the future course for regional growth and inflation, in addition to any fruition of downside risks are expected to provide cues for the Index.

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Chart Stock Name Last Change Volume 
Dyna-Mac 0.196 0.00 (0.00%)
NIO Inc. USD OV 11.69 0.00 (0.00%)
Venture 18.70 0.00 (0.00%)
Wilmar Intl 4.05 0.00 (0.00%)
ThaiBev 0.695 0.00 (0.00%)

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