Largest industrials stocks with ASEAN exposure have a combined market cap of over S$150 billion

SINGAPORE: The 20 largest capitalised industrial plays on Singapore Exchange (SGX) that report more than half their group revenues to the ASEAN region have a combined market cap of more than S$150 billion.

Singapore Exchange (SGX) lists more than 200 stocks in the industrials sector. For 1Q 2019, the industrials sector received net institutional inflows of S$92.3 million – January and March saw net outflows of S$13.9 million and S$0.5 million respectively, while February received net inflows of S$106.7 million, according to SGX data. In terms of overall performance during the quarter, the sector registered a total return of +1.0%.

These 20 stocks are categorised to the following sub-sectors: airport and transport services, environmental facilities and services, construction and engineering, air freight and logistics, building products, infrastructure, offshore and marine services, as well as human resources and employment services.

In the 2019 year-to-date, the five largest best performers among the 20 were: SBS Transit (+53.7%), Moya Holdings Asia (+22.9%), ComfortDelGro Corp (+21.9%), Chip Eng Seng Corp (+21.2%), and Singapore Post (+16.5%). These five stocks have averaged a total return of 27.2% in the YTD, bringing their one-year and three-year total returns to 9.6% and 45.3% respectively.

The Association of Southeast Asian Nations (ASEAN) was set up in 1967 and initially included five member states: Indonesia, Malaysia, the Philippines, Singapore and Thailand. With the addition of Brunei (1984), Vietnam (1995), Lao People’s Democratic Republic (1997), Myanmar (1997), and Cambodia (1999), ASEAN’s membership has since expanded to 10.

ASEAN’s population of more than 640 million represents the third-most populous geographical region in the world, after South Asia and East Asia. Indonesia, the Philippines and Vietnam are the three most populous states, representing around 70% of the collective ASEAN population.

The regional bloc is now the world’s sixth-largest economy, with a gross domestic product (GDP) of nearly US$3 trillion. It is forecast to be the fourth-largest economy in the world by 2030, after the US, China and the EU, Singapore’s Prime Minister Lee Hsien Loong said in a speech last August.

In its Economic Outlook for Southeast Asia, China and India 2019 report, the OECD Development Centre has projected an average GDP growth of 5.3% in 2019 for the 10-member bloc, with the highest growth rates – above 6% – likely to be experienced by Cambodia, Laos, Myanmar, the Philippines and Vietnam. Singapore is likely to register the lowest growth rate of 2.9%.

FocusEconomics has forecast GDP growth for ASEAN at 4.8% in 2019 – unchanged from its January forecast – and 4.8% again in 2020,  it said in a report published in February.

The research consultancy expects the ASEAN economies to continue expanding at a healthy pace, supported by wage gains, strong labour markets, infrastructure development and foreign direct investment inflows. Export growth is also likely to be brisk, albeit substantially lower than the stellar rates achieved in 2017 and 2018, it noted. Key downside risks include an escalation of the Sino-US trade war, as well as a faster-than-expected slowdown in China.[the_ad id=”31605″]

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