• While local earnings reports remain firmly in focus, recent institutional flows have been broadly aligned with global trends since the end of June. This had included broad rotation from stocks to bonds, and within the global stock market, rotation to sectors such as Technology Hardware and REITs, that have outpaced global benchmarks.
   
• In Singapore, Fixed Income ETFs saw combined net inflows of S$256 million since the end of June, three times higher than Equity ETFs, with the ICBC CSOP FTSE Chinese Government Bond ETF, iShares Barclays USD Asia High Yield Bond Index ETF and ABF Singapore Bond Index Fund ETF ranking among the top five ETFs by net inflows.
   
• Globally, Technology and REIT Sectors have led, while the Lodging, Real Estate (Non-REIT) and Transport Sectors have trailed since the end of June. In Singapore, the majority of the 20 stocks that were recipient to the highest net institutional inflow from the end of June through to 6 August also represented the REIT and Technology Sectors.

The 3Q21 to date has seen most Asian equity markets subject to international outflows with global portfolio managers rotating to bond markets. The FTSE World Government Bond Index has gained 1.1% since the end of June, paring its 2021 year-to-date decline to 3.8%, with 10-year UST gains seeing their benchmark yield decline from 1.47% to 1.31%.

The recent rotation to Fixed Income markets was also observed in Singapore-listed ETFs. Across the four major Singapore-listed ETF asset classes, Fixed Income ETFs recorded the highest combined net inflows of S$256 million in 3Q-to-date, three times higher than the Equity ETFs. The ICBC CSOP FTSE Chinese Government Bond ETF, iShares Barclays USD Asia High Yield Bond Index ETF and ABF Singapore Bond Index Fund ETF have ranked among the top five ETFs by net inflows in the 3Q-to-date. Meanwhile the two STI tracking ETFs recorded a combined net outflow of S$3 million over the same period.

During the 3Q21-to-date, the strongest equity sectors across the globe were Technology and REITs. Materials and Resources and Healthcare Product Sectors were also observed to have outpaced. The majority of the Singapore-listed stocks that saw the highest net institutional inflow in the 3Q-to-date as tabled below, represented or were adjacent to these Sectors.

The stocks recipient to the highest net institutional inflow in the 3Q-to-date are tabled below. Note there are 21 stocks in the table, given both AIMS APAC REIT and Suntec REIT were recipient to S$5.7 million in net institutional inflows. The 21 stocks averaged a 9.9% total return in the 3Q-to-date.

 Source: SGX, Bloomberg, Refinitiv (Data as of 6 August 2021)* Both stocks recipient to S$5.7 billion of Net Institutional Inflow in 3Q-to-date.

 

As detailed in the table above, multiple rotations were indicated with net institutional outflows in 1H21 and net institutional inflows in the 3Q-to-date, as observed with AEM Holdings, Ascendas REIT, Mapletree Industrial Trust, Frasers Logistic & Commercial Trust, ESR-REIT and Suntec REIT. Other stocks that have seen the majority of their 2021 year-to-date net institutional inflow logged since the end of June include Raffles Medical Group, ISDN Holdings, Rex International, Lendlease Commercial REIT, OUE Commercial REIT and AIMS APAC REIT. CapitaLand was also recipient to net institutional outflows in 1H21 and net institutional inflows in the 3Q-to-date, while pursuing a significant corporate restructure from a real estate developer to a real estate investment manager. Two other stocks that are also in the process of pursuing significant restructures, Singapore Press Holdings and Sembcorp Marine also ranked among the 20 stocks with the highest net institutional inflow in the 3Q-to-date. 

The three Singapore-listed stocks recipient to the highest net institutional inflows in the 3Q-to-date were CapitaLand, AEM Holdings and Ascendas REIT:
 

• CapitaLand was recipient to S$94.8 million in net institutional inflow in the 3Q-to-date. CapitaLand will be reporting its 1HFY21 (ended 30 June) results on 13 September. CapitaLand has attributed the significant restructure to sharpen its strategic focus that will create CapitaLand Investment, which is poised to be a leading listed global Real Estate Investment Manager, with a strong Asia foothold comprising fund management, lodging management, stakes in listed funds, stakes in unlisted funds and investment properties. The EGM and scheme meeting was held today, for responses to substantial and relevant questions click here. In the 2021 year-to-date leading Real Estate Investment Managers, Brookfield Asset Management Inc and Blackstone Inc have averaged 65.1% total returns in the 2021 year-to-date.
   
• AEM Holdings was recipient to S$58.4 million in net institutional inflow in the 3Q-to-date. On 5 August AEM Holdings reported 1HFY21 (ended 30 June) revenue at S$192.3 million, its second highest 1HFY after the record breaking 1HFY20, and kept its FY21 revenue guidance at S$460 million to S$520 million (FY20 Revenue S$519 million, FY19 Revenue S$323 million, FY18 revenue S$262 million). AEM Holdings also announced itis raising $103.1 million in a private placement to Temasek, with 26.8 million new ordinary shares at an issue price of S$3.8477 per share (representing 9.5% of the total number of issued shares). This is to “bolster its growth opportunities by investing in next generation testing capabilities, deepening research & development to accelerate product portfolio expansion, and funding its mergers and acquisitions plan”. AEM Holdings has generated a 22.3% total return in the 2021 year-to-date with four other test handlers with semiconductor testing listed in the US, Japan and Taiwan averaging 11.5% total returns [Teradyne Inc (+8.1%), Cohu Inc (-7.8%), Advantest Corp (+27.4%) and Chroma ATE Inc (+18.2%)]. Answering an FY21 AGM question, the AEM chair noted COVID-19 has accelerated global digitalisation by 6-8 years, driving significant investment into digital infrastructure for Cloud, 5G, AI, and Autonomous Vehicles, etc., that are powered by next-generation semiconductor devices.
   
• Ascendas REIT was recipient to S$40.0 million in net institutional inflow in the 3Q-to-date. On 2 August, Ascendas REIT reported gross revenue for 1HFY21 (ended 30 June) rose by 12.4% y-o-y to S$586.0 million, mainly attributed to revenue contribution from two office properties in San Francisco, which were acquired in November 2020 and 11 data centres across Europe, which were acquired in March 2021, as well as two suburban offices in Australia, which were acquired in January 2021 and September 2020. In the 2021 year-to-date global Industrial REITs have averaged a 19.4% total return.

Institutions have also been net sellers of Singapore-listed stocks in the 3Q21-to-date, with S$830 million of net institutional outflow. The 20 stocks recipient to the highest net institutional selling over the period saw S$1.1 billion of net institutional outflow. DBS Group Holdings (“DBS”), Oversea-Chinese Banking Corp (“OCBC”) and United Overseas Bank (“UOB”) were among the five stocks that led the net institutional selling over the period. During the 3Q-to-date, DBS, OCBC and UOB averaged 3.7% returns while recipient to combined net institutional outflows of more than S$330 million. This pared their combined 2021 year-to-date average total return to 23.4% on net institutional inflows to S$1.4 billion. For 2Q21, DBS, OCBC and UOB reported combined Net Interest Income (“NII”) of S$5.13 billion, which was up 3% from 1Q21 and the highest QoQ increase in combined NII since 2Q19. The three banks have been reporting more than S$5.0 billion in combined quarterly NII since the end of 2017. Globally, bank stocks, while broadly level, have lagged the stock market since the end of June, opposed to the significant outpacing observed in the first six months of 2021 on the back of the higher 10 year UST yields. The stocks recipient to the highest net institutional outflow in the 3Q-to-date are tabled below. The 20 stocks averaged a 1.6% decline in total return in the 3Q-to-date.

 Source: SGX, Bloomberg, Refinitiv (Data as of 6 August 2021)