Stock investors who regularly rebalance their portfolios will discover growth opportunities across sectors, even in a seemingly stagnant market.
Statistics have shown that such an approach can yield enticing returns despite the perceived market woes, said Singapore Exchange (SGX) equities and fixed income head Chew Sutat.
"If you rebalanced to the best-performing sectors every month in the past 12 months, you would be up by a combined 80 per cent," Mr Chew told The Straits Times.
"For instance, if you sold your telco stocks last month and bought the banks, you would be having a very nice fillip this month."
In the first eight months of this year, five sectors generated double-digit total returns. Telcos were up 11.3 per cent, materials rose 13 per cent, infotech was ahead 14.8 per cent, real estate investment trusts (Reits) added 15.6 per cent and consumer staples shot up 25.1 per cent.
...Singapore as a small market has consistently punched above its weight. Our total market cap is 2 per cent of Asia, but 7 per cent of the funds raised by IPOs (initial public offerings) this year have been in Singapore.
SGX EQUITIES AND FIXED INCOME HEAD CHEW SUTAT, who believes that the overall market remains resilient.
These gains dwarfed the 1.2 per cent total returns of the blue-chip segment over the same period.
"This is the kind of awareness that we're hoping to cultivate - that opportunities like these may be missed if you just limit your view on the STI (Straits Times Index) or stay away because of misgivings due to market sentiment."
Mr Chew made his remarks in part to address concerns that Singapore's stock market is struggling amid delistings and low trading volume.
The high-profile exits of Tiger Airways, Osim International and Neptune Orient Lines this year have raised concerns that home-grown firms may be lining up for privatisation. Meanwhile, data revealed that last month's turnover was down 27 per cent year on year, the biggest drop since June 2014.
Mr Chew stressed that these issues reflected a challenging global environment, and the headwinds are not exclusive to Singapore.
In terms of securities daily average values, Singapore's average volume for July and August was down 19.9 per cent year on year. This was comparable to or less severe than in other markets, with the volume at the New York Stock Exchange falling 17.4 per cent over the same period, while the Hong Kong Stock Exchange dropped 22.1 per cent.
Meanwhile, the loss of market capitalisation this year due to delistings here reached $6.13 billion by the end of August, just a drop in the global delistings that amounted to US$1.5 trillion (S$2.04 trillion), Mr Chew noted.
"The fact of the matter is, Singapore as a small market has consistently punched above its weight.
"Our total market cap is 2 per cent of Asia, but 7 per cent of the funds raised by IPOs (initial public offerings) this year have been in Singapore," he said.
SGX has welcomed 17 new listings this year, amounting to $6.43 billion in market cap, while raising $2.26 billion.
The three biggest deals were all Reits - Manulife US Reit in May, Frasers Logistics & Industrial Trust in June and EC World Reit in July.
The Society of Remisiers president Jimmy Ho agreed that the SGX cannot avoid external impact in a global market, "but effort must go into ensuring that when the fund flows come back, the market is in a good enough shape to have a bite at the action".
The overall market remains "resilient", Mr Chew believes. However, to get the best returns, a more sectorial approach is necessary.
He said: "One thing that encourages us is the constant growth of the breadth of investors holding shares. Last year, which was very quiet according to many, the breadth of retail participation represented by CDP (Central Depository) customers holding shares still rose 7 per cent year on year to about 950,000 accounts. After two to three years of such growth, the shift towards quality investing with more investors owning STI stocks, Reits and exchange-traded funds has already taken place."
He added: "It's time for investors to think about maximising value from equities through regular rebalancing and engaging their brokers or using the tools provided by SGX like StockFacts."