China's economic cheer is Singapore firms' gain

CapitaMall Westgate in Wuhan, China. The SGX My Gateway report said 16 of the 20 largest capitalised stocks with at least 50 per cent of revenue generated from China have had positive price returns so far this year.
CapitaMall Westgate in Wuhan, China. The SGX My Gateway report said 16 of the 20 largest capitalised stocks with at least 50 per cent of revenue generated from China have had positive price returns so far this year.PHOTO: CAPITALAND

Those with exposure to mainland showing positive price returns

A more optimistic economic outlook in China is benefiting Singapore-listed companies with exposure to the country.

A report yesterday noted that 180 of the companies listed here generate at least 20 per cent of their revenue from the mainland while 80 per cent derive half or more of sales from there.

It added that 16 of the 20 largest capitalised stocks with at least 50 per cent of revenue generated from China have had positive price returns so far this year.

This comes on the back of China's 2017 GDP forecast, which was upgraded to 6.7 per cent last month.

The SGX My Gateway report noted: "Some of China's growth drivers for the economy include its One Belt, One Road Initiative, supply-side structural reform, state-owned enterprises reform, growing middle-income class and domestic consumption, and the Made in China 2025 new economy programme."

The five best-performing Singapore-listed stocks included contract manufacturer Hi-P International, which was up 165.7 per cent, printed circuit board manufacturer Elec & Eltek International, ahead with 66.4 per cent, and China Sunsine Chemical, which produces rubber accelerators in China. Its shares rose 59 per cent.

Warehouse provider Global Logistic Properties saw shares rise 49.1 per cent, and developer Yanlord Land Group, up 25 per cent, rounding out the top five.

The report added that those 20 largest capitalised stocks have had an average market cap-weighted price return of 27.3 per cent in the year-to-date.

SGX My Gateway noted that The Straits Times Index's return so far this year is at 11.8 per cent while the Hang Seng China Enterprises Index is up 9.4 per cent in Singapore-dollar terms.

In a separate report that focused on China exchange-traded funds (ETFs), SGX My Gateway said the five ETFs listed here generated average total returns of -0.1 per cent in the first two weeks of the month, and 19 per cent in the year to date.

This brought their average 12-month total return to 22 per cent.

The five China ETFs have generated a combined turnover of $4.2 million in the first two weeks of September, which takes the total year-to-date turnover to $97 million.

SGX My Gateway said: "These stocks may provide investors who are looking for exposure to China and its One Belt, One Road Initiative opportunities to invest in companies that generate revenue from the country."

A version of this article appeared in the print edition of The Straits Times on September 16, 2017, with the headline 'China's economic cheer is Singapore firms' gain'. Print Edition | Subscribe