Singapore-listed firms enjoy Asean boom

A freight train running on the Chongqing-Xinjiang-Europe Railway route. Rail transport will be expanded southwards under the Southern Transport Corridor that Singapore is partnering Chinese entities to help set up.
A freight train running on the Chongqing-Xinjiang-Europe Railway route. Rail transport will be expanded southwards under the Southern Transport Corridor that Singapore is partnering Chinese entities to help set up.PHOTO: REUTERS

Counters with exposure to region prosper this year, with more opportunities up for grabs from China's Belt and Road Initiative

Singapore-listed counters with exposure to the Asean region have prospered this year, with more opportunities up for grabs from China's One Belt, One Road drive.

About 25 per cent of the market here comprises industrials, materials and utilities stocks which derive at least 20 per cent of their revenue from operations in the South-east Asian region.

These 192 stocks "may provide investors with opportunities to invest in companies with Asean exposure across industries such as construction and engineering, metals and mining, and trading and distribution", the Singapore Exchange (SGX) said in an SGX My Gateway report.

The largest 20 such stocks by market capitalisation have produced an average weighted price return of 13 per cent in the year to date, it said. The figure, as at Sept 21, tracks near the 14.8 per cent return across the bourse in the same period. And 18 of these stocks count on business in Asean for at least half of their revenue.

The report noted that 13 of the 20 stocks have produced positive price returns, with the highest coming from Straits Trading Company at 28.3 per cent, Jardine Strategic Holdings at 26.4 per cent and Keppel Infrastructure Trust at 23.2 per cent.

Companies with turnover coming exclusively from Asean also thrived. Indonesia-based development and management firm Gallant Venture chalked up a 13.8 per cent return while SIA Engineering added 5.5 per cent.

EXPERIENCE AND EXPERTISE

Singapore has several established industries with the experience and expertise to drive and support infrastructure development for (the Belt and Road Initiative) in Asean, within sectors such as industrials, materials and utilities.

A SINGAPORE EXCHANGE MY GATEWAY REPORT

The Chinese Belt and Road Initiative has been accompanied by infrastructure development across the region that could potentially expand trade routes.

Beijing has already committed billions to projects such as rail and port links, financed through avenues like the Asian Infrastructure Investment Bank and the Silk Road Infrastructure Fund.

Around Asean, joint projects include railway undertakings in Laos and Thailand, which the bourse operator noted will integrate the region and the global economy "while maintaining its central role in East Asian regional cooperation".

Meanwhile, the Chongqing Connectivity Initiative and Southern Transport Corridor are among the schemes that Singapore is partnering Chinese entities to help set up.

The SGX report noted that Singapore, as a financial hub for both China and Asean, "has significant roles to play" in One Belt, One Road efforts.

"In addition, Singapore has several established industries with the experience and expertise to drive and support infrastructure development for (the Belt and Road Initiative) in Asean, within sectors such as industrials, materials and utilities."

A version of this article appeared in the print edition of The Straits Times on September 25, 2017, with the headline 'Singapore-listed firms enjoy Asean boom'. Print Edition | Subscribe