To The Moon

In 3Q23, $Straits Times Index(STI.SI)$ generated a 2.1% total return, bringing its 9-month total return to 3.3%. For the quarter, the STI marginally outpaced the FTSE ASEAN Extended 60 Index and FTSE Asia Pacific Index, which saw total returns of 1.1% and a decline in total return of 1.1%, respectively, in SGD terms. For much of the quarter, the STI consolidated on moves in the preceding quarter with the average daily STI high in 3Q23 at 3,249 just 4 points lower than in 2Q23, and the 3,225 average daily STI low in 3Q23 just 5 points lower than in 2Q23. Fueled by the announcement by Saudi Arabia and Russia to extend their voluntary oil production cuts through the end of this year, Brent Crude Oil gained 27% to US$95/bbl in 3Q23 and has since returned to near US$90/bbl ahead of OPEC's Joint Ministerial Monitoring Committee. The PTT Exploration & Production (PTTEP) Thailand SDR rallied 12.4% over 3Q23, with dividends boosting the total return to 15.4%. The PTTEP SDR traded an aggregated value of S$9 million in 3Q23 and has an active daily trading range of 1% or 6 ticks. The performances of the three most traded Energy stocks in Singapore are $Rex Intl(5WH.SI)$ $Geo Energy Res(RE4.SI)$ $RH PetroGas(T13.SI)$. Stock Code Mkt Cap S$M YTD Avg T/O S$M YTD Net Insti Flow S$M YTD Net Insti Flow / Mkt Cap YTD TR % 3Q23 TR % 3Q23 Net Insti Flow S$M 30 Day Ann. Vol % 180 Day Ann. Vol % Rex Intl 5WH 246 2.76 -4.75 -1.9% -9.6 28.9 1.8 57.9 52.6 Geo Energy Res RE4 403 1.49 -17.30 -4.3% 5.7 31.8 -2.2 55.6 42.8 RH Petrogas T13 192 1.30 3.32 1.7% 22.3 27.1 1.1 53.8 40.7 Another key macro development was that expectations were anchored to the US Federal Reserve keeping rates higher for longer in 2024. The trio of $DBS GROUP HOLDINGS LTD(D05.SI)$ $UNITED OVERSEAS BANK LIMITED(U11.SI)$ $OVERSEA-CHINESE BANKING CORP(O39.SI)$ averaged 6.9% total returns in 3Q23. On the other side of the “higher for longer” Fed Funds Rate Outlook, the iEdge S-REIT index declined 4.2% in total return in 3Q23. With the firming of the higher for longer rate outlook, 3Q23 saw less ‘FedSpeak fever’ and less day-to-day swings in the forward expectations of FOMCs and the Federal Funds Rate than seen in 2Q23. The reduction in rate uncertainty, saw both the combined average daily turnover of the three STI banks and iEdge S-REIT Index constituents in 3Q23 decline 9% from 2Q23 levels. The STI Banks also led the net institutional fund inflow to Singapore stocks in 3Q23, and the 3M compounded SORA remained around 3.7% during the quarter. Much attention in the 3Q23 sector earnings and business updates will be on how the outlook for growth impacts the low-single digit loan growth earmarked for 2023. Stock Code Mkt Cap S$M YTD Avg T/O S$M YTD Net Insti Flow S$M YTD Net Insti Flow / Mkt Cap YTD TR % 3Q23 TR % 3Q23 Net Insti Flow S$M 30 Day Ann. Vol % 180 Day Ann. Vol % DBS D05 86,634 124.77 -944.63 -1.1% 4.7 8.3 373.9 10.2 15.3 UOB U11 47,280 82.33 -623.90 -1.3% -2.7 4.8 50.8 11.7 16.0 OCBC O39 57,546 61.88 85.67 0.1% 12.0 7.6 170.9 12.1 13.8 In addition to rates potentially curbing US growth in 2024, the pace of China's rebound prompted the OECD in September to reduce its 2024 global growth outlook by 0.2 pp to 2.7%. The 2024 GDP growth estimate for China was reduced from 5.1% to 4.6%. Manufacturing is highly sensitive to global growth outlooks, with Singapore’s industrial production in contraction since October 2022, in addition to contracting by 6.6% YoY in the first 8-months of 2023. The iEdge SG Adv Manufacturing Index generated a 0.5% decline in total return in 2023, bringing its 9-month decline in total return to 1.8%. Excluding both $YZJ Shipbldg SGD(BS6.SI)$ and $Seatrium(S51.SI)$ (which are respectively pursuing more fuel-efficient maritime solutions, and cleaner/ green solutions in the offshore, marine and energy industries) the remaining constituents of the iEdge SG Adv Manufacturing Index saw their combined average daily turnover in 3Q23 decline 7% from 2Q23 levels. Stock Code Mkt Cap S$M YTD Avg T/O S$M YTD Net Insti Flow S$M YTD Net Insti Flow / Mkt Cap YTD TR % 3Q23 TR % 3Q23 Net Insti Flow S$M 30 Day Ann. Vol % 180 Day Ann. Vol % Keppel Corp BN4 11,807 27.94 -173.34 -1.5% 48.8 3.5 -21.5 16.9 27.1 Sembcorp Ind U96 8,784 27.61 179.54 2.0% 49.9 -10.7 12.9 25.6 30.4 YZJ Shipbldg SGD BS6 6,400 34.20 21.81 0.3% 24.0 10.7 40.6 29.1 28.5 Seatrium S51 8,868 42.97 185.62 2.1% -5.8 7.2 124.0 23.8 40.0 As discussed here, paralleling increased focus this year on a lower carbon and more climate-resilient future, multiple Singapore-listed stocks have continued to press ahead with pivots to sustainable energy and fuel-efficient transportation solutions. While the four stocks above averaged saw their combined, relatively muted, total returns of 2.7% in 3Q23, the four stocks saw their combined average daily trading turnover increase by 24% compared to 2Q23. Local private-sector economists expect the Singapore Economy to pick up pace and grow by 2.5% in 2024, with top downside risks including an external growth slowdown, inflationary pressures in addition to economic developments in China. At the same time, better-than-expected external growth and China’s growth on top of a recovery in the technology business cycle are the firm upside risks. 50 Most Traded Stocks in First 9 Months of 2023 Code Mkt Cap S$M YTD Avg T/O YTD Net Insti Flow S$M YTD Net Insti Flow / Mkt Cap YTD TR % 3Q23 TR % 3Q23 Net Insti Flow S$M 30 Day Ann. Vol % 180 Day Ann. Vol % DBS D05 86,634 124.8 -944.6 -1.1% 4.7 8.3 373.9 10.2 15.3 UOB U11 47,280 82.3 -623.9 -1.3% -2.7 4.8 50.8 11.7 16.0 OCBC Bank O39 57,546 61.9 85.7 0.1% 12.0 7.6 170.9 12.1 13.8 Singtel Z74 40,121 49.8 -257.9 -0.6% -2.4 -0.1 -71.4 13.5 17.1 SIA C6L 19,066 46.7 4.9 0.0% 20.4 -6.1 -105.6 11.5 19.8 Seatrium S51 8,868 43.0 185.6 2.1% -5.8 7.2 124.0 23.8 40.0 CapLand IntCom T C38U 12,178 34.3 -117.6 -1.0% -5.4 -0.5 -13.9 14.8 17.2 YZJ Shipbldg SGD BS6 6,400 34.2 21.8 0.3% 24.0 10.7 40.6 29.1 28.5 CapLand Ascendas REIT A17U 11,854 31.9 22.8 0.2% 4.2 1.7 56.1 16.0 17.4 Genting Sing G13 10,080 30.7 53.1 0.5% -9.4 -8.6 -87.3 16.1 20.8 Keppel Corp BN4 11,807 27.9 -173.3 -1.5% 48.8 3.5 -21.5 16.9 27.1 Sembcorp Ind U96 8,784 27.6 179.5 2.0% 49.9 -10.7 12.9 25.6 30.4 CapitaLandInvest 9CI 15,667 23.9 -109.7 -0.7% -13.3 -6.3 -60.4 21.3 21.4 Mapletree Log Tr M44U 8,135 22.8 7.8 0.1% 7.3 5.0 11.5 17.6 19.3 Wilmar Intl F34 22,911 22.4 53.3 0.2% -8.0 -0.2 44.8 20.7 16.5 Venture V03 3,505 19.9 -299.6 -8.5% -25.8 -14.3 -213.0 21.2 21.0 JMH USD J36 18,476 16.8 -16.7 -0.1% -1.7 -6.2 -20.8 15.2 16.6 SGX S68 10,424 16.8 138.1 1.3% 10.7 1.5 58.6 10.7 12.7 ST Engineering S63 12,121 15.8 128.6 1.1% 19.9 7.4 79.2 12.7 15.8 ThaiBev Y92 14,195 15.6 -65.6 -0.5% -14.5 -0.9 -5.0 25.0 22.1 Mapletree PanAsia Com Tr N2IU 7,345 14.8 -86.8 -1.2% -12.7 -10.5 -48.8 20.5 19.0 SATS S58 3,861 14.7 -81.8 -2.1% -3.6 0.8 -18.6 15.0 27.7 CityDev C09 5,976 12.7 -169.8 -2.8% -17.6 -1.0 -22.0 14.5 17.0 Jardine C&C C07 12,446 12.5 20.5 0.2% 15.2 -7.2 6.9 17.1 20.4 Frasers L&C Tr BUOU 3,990 11.5 -70.0 -1.8% -5.2 -14.4 -74.4 18.7 21.9 Mapletree Ind Tr ME8U 6,346 10.2 -10.7 -0.2% 5.4 2.7 14.7 14.7 14.9 HongkongLand USD H78 10,470 10.0 -28.8 -0.3% -18.8 -6.0 -14.8 24.9 21.2 Keppel DC REIT AJBU 3,545 9.8 41.0 1.2% 22.1 -1.5 6.8 18.8 20.9 Suntec REIT T82U 3,327 9.2 -173.0 -5.2% -13.2 -8.8 -32.2 16.4 16.0 ComfortDelGro C52 2,772 8.5 28.2 1.0% 10.3 14.7 71.1 11.7 19.0 Keppel REIT K71U 3,223 7.5 -39.4 -1.2% 0.0 -1.9 -6.4 11.2 15.9 UOL U14 5,398 7.4 14.5 0.3% -2.4 0.0 9.5 17.2 18.9 CapLand Ascott T HMN 3,571 7.1 -22.2 -0.6% -4.5 -8.1 -36.2 17.1 22.0 UMS 558 878 6.2 38.2 4.4% 14.3 23.8 38.4 23.4 33.4 AEM SGD AWX 1,044 5.9 30.3 2.9% 0.0 -7.3 -10.6 29.9 36.6 Frasers Cpt Tr J69U 3,673 5.7 -3.2 -0.1% 5.2 0.0 -7.2 13.7 14.9 Lendlease REIT JYEU 1,210 5.1 -97.4 -8.0% -20.9 -14.4 -34.1 17.3 19.5 Frencken E28 470 4.6 6.7 1.4% 20.6 24.4 10.3 38.0 44.5 Golden Agri-Res E5H 3,361 4.4 34.5 1.0% 10.0 8.2 7.4 34.9 32.8 Nanofilm MZH 592 3.9 -22.7 -3.8% -33.5 -30.1 -27.2 30.6 44.6 SamuderaShipping S56 395 3.5 -5.2 -1.3% 14.9 -11.0 -0.4 26.8 49.5 First Resources EB5 2,350 3.4 2.3 0.1% 12.1 11.9 9.2 20.0 30.7 ESR-LOGOS REIT J91U 2,075 3.4 3.9 0.2% -20.6 -14.0 -2.2 42.8 30.1 Kep Infra Tr A7RU 2,644 3.3 -43.3 -1.6% -6.1 -7.6 -17.2 17.1 16.3 CapLand China T AU8U 1,478 3.3 -15.0 -1.0% -16.6 -10.0 -20.6 13.7 20.1 YZJ Fin Hldg YF8 1,307 3.2 21.2 1.6% 6.4 5.9 8.3 24.2 26.2 Olam Group VC2 4,084 3.2 -12.1 -0.3% -22.8 -22.6 2.0 35.9 31.3 Sheng Siong OV8 2,255 3.1 -20.5 -0.9% -5.7 -5.5 -29.3 13.2 13.2 NetLink NBN Tr CJLU 3,293 3.1 -25.7 -0.8% 4.8 -1.8 -18.6 8.2 12.5 https://www.sgx.com/research-education/market-updates/20231004-oil-rates-slower-growth-outlook-steered-markets-3q23