• The iEdge SG Advanced Manufacturing Index tracks the performance of more than 100 Singapore-listed companies and posted a negative return of 2.4% in 2023. This reduced its cumulative total return for the five years from the end of 2018, to 19.5%.
   
• In 2023, the Index collectively accounted for 20% of the total capital traded in the Singapore stock market, demonstrating the significant role that the sector plays in the stock market, paralleling the influence manufacturing has on the economic performance of Singapore and the region.
   
• Seatrium, YZJ Shipbuilding, Wilmar, Venture and ST Engineering were the most traded Index stocks in 2023. The strongest performers among the 40 biggest Index weights in 2023 were TJ DaRenTang, Food Empire, Dyna-Mac, Delfi and Frencken. ST Engineering, Seatrium, TJ DaRenTang USD were among the five constituents with the highest net institutional inflow, while Venture and Wilmar were among the five with the highest net institutional outflow.
   

In 2023 the iEdge SG Advanced Manufacturing Index generated a 2.4% decline in total return, taking its five year total return from the end of 2018 to 19.5%. Dezan Shira & Associates noted in their ASEAN Briefing released yesterday that the global semiconductor slump hurt Singapore's manufacturing in 2023 relaying that the sector depended a lot on semiconductors and electronic components, which made up almost half of the production. Looking forward, the report noted Singapore's electronics sector is expected to boost the manufacturing output in 2024, adding the ‘positive momentum not only positions the electronics sector for expansion but also augurs well for the overall financial growth and outlook of Singapore’s manufacturing and trade-related sectors’. Back on 31 Oct, the EDB Business Expectations of the Manufacturing Sector also found that an overall net weighted balance of 7% of manufacturing firms anticipated an improved business situation for the period October 2023 to March 2024, compared to the third quarter of 2023.

Rather than focusing on electronic components, the iEdge SG Advanced Manufacturing Index covers eight sectors related to manufacturing, such as consumer products, energy, healthcare, and broader technology. According to the sector criteria, a stock must have at least 40% of its revenue coming from the manufacturing-related activities to be included; this requirement is reduced to 30% for stocks that are already in the index. From a sector perspective, Industrials comprise 36% of the Index with Consumer Non-Cyclicals comprising 27% of the Index.

In 2023, with more than 100 constituents, the Index collectively accounted for 20% of the total capital traded in the Singapore stock market. This shows the significant role that the sector plays in the stock market that parallels its influence on the economic performance of Singapore and the broader region.

The five most traded stocks of the Index in 2023 were Seatrium, Yangzijiang Shipbuilding, Wilmar International, Venture Corporation and Singapore Technologies Engineering. As detailed in the table below the five stocks generated mixed performances ranging from a 21% total return for Singapore Technologies Engineering to a 16% decline in total return for Venture Corporation.

Source: SGX, Bloomberg, Refinitv  (Data as of 4 January 2024)

Net Fund Flows in 2023

For 2023, the Index constituents booked S$192 million of net institutional outflow with the ratio of stocks with net outflow to net inflow at one to one among the Index members. Among the index constituents with a market cap over S$1 billion, the ones that experienced the highest net institutional outflow relative to their market value at the end of 2023 were Venture Corporation, Keppel Infrastructure Trust, SATS, Haw Par and Thai Beverage.

Venture Corporation booked a net institutional outflow of S$230 million, which was 5.9% of its market value of S$3.9 billion at year-end. The net outflow for the leading global provider of technology services, products, and solutions was higher in the first three quarters of 2023, at S$292 million, but institutions returned to net buy the shares in the last quarter, booking S$62 million in net inflow.

On the other hand, the Index constituent with a market cap over S$1 billion that had the highest net institutional inflow relative to its market value was AEM Holdings. Malaysia’s Employee’s Provident Fund (EPF) increased its stake in AEM Holdings to more than 11% in 2023, up from less than 9%. EPF became a substantial shareholder of AEM Holdings with a 5% interest in June 2022. AEM has continued to invest in developing its Test 2.0 innovations and capabilities, which led to AEM Holdings obtaining more patents for its thermal capabilities in the third quarter of 2023. Most of the customer engagements of the Group were related to the next generation test requirements for advanced packaging chips used in high performance computing and AI.

Biggest Movers in 2023

The iEdge SG Advanced Manufacturing Index is concentrated to its 40 largest weights that make up 97.5% of the Index. These 40 stocks saw a net institutional outflow of S$177 million in 2023, out of the total net institutional outflow of S$192 million for the Index constituents. The rest of the stocks had a combined net institutional outflow of S$15 million.

Among the 40 stocks, Tianjin Pharmaceutical Da Re Tang Group Corp, Food Empire Holdings, Dyna-Mac Holdings, Delfi, and Frencken Group were the strongest performers in 2023, with an average total return of 72% for the year. Four of these five stocks also attracted net institutional inflow. Tianjin Pharmaceutical Da Re Tang Group Corp gains were made in the first four months of the year with 1HFY23 and 3QFY23 attributable net profit up 54% YoY and down 48% YoY respectively, after FY22 attributable net profit was up 12% YoY. The Group maintains that China has issued a series of policies and regulations in relation to drug innovation, creating a more favourable market environment for TCM research and development.

In contrast, Oceanus Group, Nanofilm Technologies International, Sri Trang Gloves Thailand PCL, Olam Group, and Micro-Mechanics Holdings booked the largest declines among the 40 stocks in 2023. These five stocks had an average total return decline of 30% for the year, with three of them also seeing net institutional outflow.

The 40 largest stocks of the Index in terms of weights are tabled below. The Index is free-float weighted, and thus weightings only account for only shares deemed publicly available to investors.

Source: SGX, Bloomberg, Refinitv  (Data as of 4 January 2024)

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