Institutions & Individual Investors Net Buyers of Singapore Stocks in August

• For the first three weeks of August, the STI declined 6.5% in-line with the FTSE China A50 Index losing 6.6%, before the STI retraced 2.5% of those losses to finish the month down 4.2%. August was a heavy month for Singapore dividends, with over 100 stocks going ex-dividend over the month, including STI stocks, which reduced the STI’s decline in total return for the month to 2.5%.
   
• Singapore stocks booked net institutional inflows of S$408 million and net retail inflows of S$600 million over the month. Both these segments booking net inflows have been an uncommon occurrence in recent years, and the combined net inflows reversed the combined ~S$950 million net outflows of both segments in June and July.
   
• The Sectors that booked the most net institutional inflow over the month included Banks, Industrials, Financial Services (Ex-Banks), Utilities and Consumer Non-Cyclical Sectors. Consensus estimate Target Prices for the three Banks according to Refinitiv were revised higher in August. Refinitiv consensus estimates represent the average of individual estimates provided by analysts covering the stock, and the estimates typically represent an analyst’s opinion of the stock performance over the next 18 months.
   
• The Singapore stock sectors that saw the most net retail inflow in August were REITs, Telecommunications, Real Estate (ex-REITs) and Technology. These included Singtel, Venture, City Developments, CapitaLand Ascott Trust, Mapletree PanAsia Com Trust, CapitaLand Integrated Commercial Trust, Suntec REIT & Lendlease Commercial REIT. Other stocks that led net retail inflows in August were SIA, OCBC, CapitaLand Investment, Keppel Corp and Genting Singapore and SATS.  

The STI ended August at 3,233.3, declining 4.2% in price, with dividends reducing the decline in total return to 2.5%. This brings the STI’s total return over the first eight months of 2023 to 3.8%. The first three weeks of August saw the outlook for weaker China growth deliver broad regional equity index declines. As the IMF reiterated on 30 August, an abrupt global slowdown or a recession, including in China, Singapore’s largest trade partner, is a key risk. For the first three weeks of August, increased risks of a China growth slowdown saw the STI lose 6.5%, in-line with the FTSE China A50 Index losing 6.6% in SGD terms, before the STI retraced 2.5% of those losses to finish the month down 4.2%. August was also a heavy month for Singapore dividends, with over 100 stocks going ex-dividend over the month, including STI stocks, which reduced the STI’s decline in total return for the month to 2.5%.

The depreciation of the RMB to the USD, saw Yangzijiang Shipbuilding (Holdings) the STI outperformer in August, lodge 9.7% gains, with most of the Jiangsu-based shipbuilder’s current record orderbook in USD.  As highlighted in August, Yangzijiang Shipbuilding’s gross profit margin for the core shipbuilding business rose to 18% in 1HFY23 (ended 30 June) from 13% in 1HFY22, mainly driven by the depreciation of the RMB against USD, and the normalised raw material costs incurred during the period. As of the end of its 1HFY23, Yangzijiang Shipbuilding’s total outstanding order book amounted to US$14.70 billion for a total of 181 vessels, with clean energy vessel orders now representing 56% of the total contract value.

Individual Investors were net buyers of Singapore stocks in August, with market makers and active traders bridging the difference between net institutional and net retail fund flow. Together, August’s net institutional inflow at S$408 million and net retail inflow of S$600 million reversed the combined ~S$950 million net outflow of both client segments in July and June. The Singapore stock sectors that saw the most net retail inflow were REITs, Telecommunications, Real Estate (ex-REITs) and Technology. The 10 stocks that booked the highest net retail inflows in August are tabled below.

Stocks with Highest Net Retail Inflow in August	Code	Mkt Cap (S$M)	Price Close	Refinitiv Consensus Estimate Target Price	Pct Chg Aug %	Aug Net Retail Flow S$M	Pct Chg YTD %	TR YTD %	Net Insti Flow 2023 YTD S$M	5 Year Total Return %	Beta	P/B (x)	Avg PB 5Y (x)
Singtel	Z74	$39,354	$2.38	$3.062	-10	163	-7	-4	-277	-8	0.9	1.51	1.56
Singapore Airlines	C6L	$20,481	$6.87	$6.801	-9	95	24	29	66	10	1.3	1.03	0.81
Venture Corporation	V03	$3,833	$13.11	$16.191	-12	93	-23	-19	-268	-9	0.8	1.36	1.96
OCBC	O39	$56,733	$12.55	$14.328	-6	82	3	10	-32	41	1.1	1.07	1.03
Capitaland Investment	9CI	$16,880	$3.24	$4.105	-5	48	-11	-8	-93	20	1.1	1.07	1.24
Keppel Corporation	BN4	$12,635	$6.94	$7.973	-6	47	47	54	-179	98	1.1	1.10	0.67
Genting Singapore	G13	$10,596	$0.88	$1.149	-7	43	-8	-5	76	-5	1.2	1.31	1.34
City Developments	C09	$6,082	$6.68	$8.377	-9	39	-17	-16	-157	-17	1.3	0.67	0.73
CapitaLand Ascott Trust	HMN	$3,651	$0.97	$1.231	-13	29	-8	-3	-21	8	1.2	0.77	0.80
SATS	S58	$3,866	$2.59	$2.887	-8	28	-4	-4	-81	-43	1.3	1.65	2.76

As tabled above, Singapore Telecommunications (Singtel) booked S$163 million of net retail inflows in August, taking the accumulated net retail inflows for the first eight months of 2023 to S$201 million. This followed Singtel booking net retail outflows of S$709 million in 2022 which coincided with the stock generating a 15.8% total return. During the month of August, Singtel posted a 10.7% price decline, representing the stock’s biggest monthly price decline since May 2020. Dividends reduced the decline in total return to 7.7%.

Singtel also held its annual investor day in August and provided a 1QFY24 (ended 30 June) business update on 21 August. With the 1QFY24 update, the Group CEO noted going forward, Singtel expects the integration of its core consumer and enterprise businesses which is underway in both Singapore and Australia, as the next step in the Group’s strategic reset, to optimise synergies, help deliver cost benefits and drive growth. Apart from reinvigorating its core businesses, Singtel is developing new growth engines which include the regional data centre business, Digital InfraCo, NCS and GXS. The Group CFO also noted in June, that Singtel aims to improve the internal rate of returns of these growth engines, and establish capital partnerships to support growth and scale them up. Singtel has also pursued initiatives to unlock value and actively manage capital.

August Net Institutional Inflow

Despite the above broad declines, institutions were net buyers in August, with the Bank, Industrials, Financial Services (Ex-Banks), Utilities and Consumer Non-Cyclical Sectors booking net institutional inflows. Prior to August, November 2022 was the preceding month that institutions were net buyers of Singapore stocks. DBS Group Holdings (DBS), United Overseas Bank (UOB) and Oversea-Chinese Banking Corporation (OCBC) booked the most net institutional inflows across the Singapore stock market for the month.

Refinitiv consensus estimate Target Prices for the three Banks were revised higher in August, and stood at S$37.55 for DBS, S$32.347 for UOB and S$14.328 for OCBC as of the 31 Aug close. Refinitiv consensus estimates can be found in the SGX Stock Screener, and are updated throughout the trading day, and represent the average of individual estimates provided by analysts covering the stock. The estimates typically represent an analyst’s opinion of the stock performance over the next 18 months. The aforementioned Yangzijiang Shipbuilding also saw its Refinitiv consensus estimate Target Price increase over August, to be at S$1.898 on the Thursday close.

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Originally Posted September 4, 2023 – Institutions & Individual Investors Net Buyers of Singapore Stocks in August