The Weekly Nibble: A Focus on Singapore Blue-Chip Shares
- Original Post from The Motley Fool Sg

Here are some of the most popular articles that have appeared on The Motley Fool Singapore’s website for the week.


3 Singapore Blue-Chip Shares That Warren Buffett Might Like


Ever wanted to invest in stable companies that are part of the Straits Times Index (SGX: ^STI)? Look no further. In this article, I look at three blue-chips that have wide economic moats and why they could make good investments.


Companies discussed in the article: Singapore Exchange Limited (SGX: S68), DBS Group Holdings Ltd (SGX: D05) and SATS Ltd (SGX: S58).


3 REITS That Have More Than 8% Yield Right Now


Lawrence Nga explores three real estate investment trusts (REITs) that have distribution yields of above 8%. They are not excessively valued in terms of their book values as well.


REITs discussed in the article are Cache Logistics Trust (SGX: K2LU), First Real Estate Investment Trust (SGX: AW9U) and EC World Real Estate Investment Trust (SGX: BWCU).


Which Blue-Chip Property Developer Is The Cheapest Now?


With the additional property cooling measures introduced in July this year, shares of property developers have generally not been doing well. For instance, UOL Group Limited’s (SGX: U14) share price has tumbled close to 20% since the cooling measures were put in place.


Jeremy Chia, in his article, investigates which of the trio of property outfits that are part of the Straits Times Index – UOL, CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – offer the best value amid the tumbling stock prices.


$STI(^STI.IN) $First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $CityDev(C09.SI) $CapitaLand(C31.SI) $DBS(D05.SI) $Cache Log Trust(K2LU.SI) $SATS(S58.SI) $SGX(S68.SI) $UOL(U14.SI)

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Thai Beverage Public Company Limited Is Down More Than 35% In The Last 12 Months: Is It Cheap Now?
- Original Post from The Motley Fool Sg

Thai Beverage Public Company Limited (SGX: Y92) is a company operating in four different segments, namely, Spirits, Beer, Food, and Non-Alcoholic Beverages.Year-to-date, Thai Beverage’s stock price is down more than 35% to S$0.59 (as of the time of writing). This raises a question: Is Thai Beverage cheap now? The question is important because if the firm’s shares are cheap, it might be a good opportunity for investors to buy its shares.


Unfortunately, there is no easy answer. However, we can still get some insight by comparing Thai Beverage’s current valuations with the market’s valuation. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.


I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).


Thai Beverage currently has a PB ratio of 4.0, which is higher than the SPDR STI ETF’s PB ratio of 1.1. Similarly, its PE ratio is higher than that of the SPDR STI ETF’s (26.8 vs 11.2). Also, the firm’s dividend yield of 2.0% is lower than the market’s yield of 3.6%. The lower a stock’s yield is, the higher is its valuation.


In sum, we can argue that Thai Beverage is priced at a premium to the market average due to its high PB ratio, high PE ratio and low dividend yield.


$STI(^STI.IN) $STI ETF(ES3.SI) $ThaiBev(Y92.SI)

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How Cheap Is The Singapore Stock Market Currently?
- Original Post from The Motley Fool Sg

The Singapore stock market benchmark, the Straits Times Index (SGX: ^STI), has tumbled 1.3% so far for the month. With such weakness surrounding the local stock market, investors might be thinking: “How cheap is the Singapore stock market right now?”


Knowing whether the stock market is cheap or expensive could help us make better investment decisions.


There are two methods to determine if Singapore shares are cheap right now. The first way is to compare the market’s current price-to-earnings (PE) ratio to the market’s long-term average PE ratio. The second approach involves looking at the number of net-net stocks in the stock market.


PE valuation method


Since it is difficult to get the past daily PE ratios of the STI, the PE ratios of SPDR STI ETF (SGX: ES3) can be used as a proxy. The SPDR STI ETF is an exchange-traded fund (ETF) that tracks the fundamentals of the STI.


As of 14 December 2018, the SPDR STI ETF had a PE ratio of 11.0. Here are some of the other important PE ratios that we need:


1) The long-term average PE ratio: The STI’s average PE ratio from 1973 to 2010 was 16.9;


2) An instance of a high PE ratio for the STI: Back in 1973, the index’s PE ratio hit 35; and


3) An example of a low PE ratio for the STI: At the start of 2009, the index was valued at 6 times trailing earnings.


Based on the data above, we can see that Singapore stocks are cheaper than average right now.


Net-net stocks method


In this method, we will look at the number of net-net stocks available in the local stock market. To know what a net-net stock is, you can head to the explanation here. If there is a large number of net-net stocks than usual in the stock market, it could mean that stocks are cheap at that moment.


The following is a chart that shows the net-net stock count in Singapore since 2005:Source: S&P Global Market Intelligence


When the Straits Times Index is at a peak (such as in the second half of 2007), the net-net stock count is low. The reverse is also true: When the Straits Times Index is at a low (like in the first half of 2009), the net-net stock count is high. In the second half of 2007, the net-net stock count was below 50 while in the first half of 2009, the figure was at the peak of almost 200.


As of 14 December 2018, there were 112 net-net stocks. This is the highest level since the first quarter of 2017 but is still far from the net-net stock count seen in 2016.


The Foolish takeaway


Based on the two different valuation methods, we can safely say that stocks in Singapore are not that expensive, but they not in extreme bargain territory either.


$STI(^STI.IN) $STI ETF(ES3.SI)

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The Weekly Nibble: A 2018 Review
- Original Post from The Motley Fool Sg

Here are some of the most popular articles that have appeared on The Motley Fool Singapore’s website for the week.


2018’s Top 5 Performing Blue-Chips


The year is drawing to a close, and it’s time for a review of the stock market.


In this article, Chin Hui Leong and Esjay jointly looked at the top five performing Straits Times Index (SGX: ^STI) components. The best performing of all, Dairy Farm International Holdings Ltd (SGX: D01), delivered a return of 14.8% from the start of 2018 till the end of November. Do jump into the article to find out which are the other best performers of the index.


3 Companies Which Managed To Weather A Tough 2018


2018 was not an easy year for stock market investors. From its peak in May 2018, the Straits Times Index has fallen some 14% up till Thursday this week.


Even amid the turbulent times, some companies have managed to weather the storms. Chin and Royston Yang jointly investigate three such companies in their article.


2018’s Top 5 Worst Performing Blue-Chips


Earlier, we looked at the top five performing blue-chip shares. Here, we have some of the worst performing blue-chips. The worst performer of all, Golden Agri-Resources Ltd (SGX: E5H), saw its share price being cut by around 34%. You can check out the other worst performers from the article.


$STI(^STI.IN) $DairyFarm USD(D01.SI)

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The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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The Top 3 Yielding REITs in Singapore Now
- Original Post from The Motley Fool Sg

Last month, investors in Singapore saw one of the steepest sell-offs of a real estate investment trust (REIT) in recent memory.


First Real Estate Investment Trust (SGX: AW9U) slid more than 10% in just two days as reports about the financial health of its main tenant, Lippo Karawaci Tbk PT spooked investors.


REITs are often considered more stable investments than stocks because their rental income is usually more consistent and they tend to have fewer business risks than traditional companies. Because of these reasons, a large decline in a REIT’s unit price, such as First REIT’s, is a rare occurrence.


That being said, the decline in price now means that investors who are willing to take some risks with First REIT can buy in at a much lower price. As the yield of a REIT is a function of its price, it also means that investors who buy now will also enjoy a much higher distribution yield than if they had bought it just a week earlier. First REIT now sports the fifth highest yield among REITs in Singapore.


With that in mind, I thought it would be useful to give investors a list of the top three REITs with the highest year-to-date annualised yields in Singapore.



Lippo Malls Indonesia Retail Trust (SGX: D5IU)


Top on the list is another REIT that is linked to Lippo Karawaci. Like First REIT, Lippo Malls Indonesia Retail Trust has fallen hard in recent months. Year-to-date, the REIT has shed more than 40% of its value amid concerns over its sponsor.


The falling Indonesian Rupiah has not helped either and is another factor that has caused distributions to be lower for local investors.


Lippo Malls Indonesia Retail Trust currently has an annualised yield of 12%.



Cache Logistics Trust (SGX: K2LU)


With an annualised yield of 9%, Cache Logistics Trust comes in at second place. It invests primarily in logistics warehouse properties located in Singapore, Australia, and China.


The trust has been suffering from higher foreign exchange losses this year, largely due to the weaker Australian dollar. Consequently, its net income has slid 7.1% between January to September this year, compared to last year. Its distribution per unit has also declined 12%, which has resulted in its unit price falling almost 20% so far this year.



EC World Real Estate Investment Trust (SGX: BWCU)


Third on this list is EC World REIT with its annualised yield of 8.8%. It invests in specialised and e-commerce logistics properties in China. So far this year, the REIT has been doing well with gross revenue and distributable income up 2.9% and 3.0% respectively. It made its first acquisition last year, expanding its property count to seven, which was part of the reason for the improved performance this year.


The Foolish bottom line


Fears of rising interest rate and geopolitical risk have caused a broad market sell-off this year. The falling stock market has resulted in REITs in Singapore currently sporting much higher yields than they did last year.


That being said, the yield of a REIT is not the only aspect that investors should look out for. What is perhaps more important is the stability of distributions and whether the REIT can grow over time. Investors should consider things like concentration risk, gearing, and interest cover when assessing the stability and growth potential of a REIT.


$First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $Lippo Malls Tr(D5IU.SI) $Cache Log Trust(K2LU.SI)

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