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1H13 In Review: Do The Winners Have Any Steam Left?
Hot Picks, Tradeable | 09 July 2013
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By: Simeon Ang
Articles (125) Profile

The steroids have burned out along with the high. The era of cheap money is nearing its end, and with it, the stratospheric climb of local stocks. The Singapore benchmark, Straits Times Index had previously hit highs of more than 3,450 before crashing down to hold its head barely above water since the beginning of the year. The index is now trading at around 3,150 points.

It is without a doubt that individual stocks have felt the brunt of this recent sell-down, which before heading into June, was seen as experiencing the strongest bull market since 2007. However, some stocks have weathered the recent beating down far better than their counterparts. Which stocks stood out and captured the attention of investors willing to buy?

We look at three broad categories, namely the blue chips, mid-caps (middle capitalisation) and small-caps (small capitalisation). Most importantly, we look if these “winners” have any more room for price levels to increase. Without further ado, we delve into the “Winners of 1H13”!

The Blue Chips – ThaiBev, SIA Engineering, SingTel
The Singapore stock market benchmark, Straits Times Index has seen better days. In fact, those better days were not too long ago with highs hit slightly more than a month ago. All that came to a dramatic end as the US Federal Reserve signalled its intentions to begin tapering its bond purchase programme. Coupled with less than stellar economic data from China, investors went from a bull charging to a bear roaring in a jiffy.

In this onslaught, three stocks stood out and claimed the title of winners in our review. They are Thai Beverage Public Company (+47.5 percent), SIA Engineering Company (+14.6 percent) and Singapore Telecommunications (+13.6 percent).

Source: FactSet, chart on returns of the STI (Blue) versus ThaiBev (Green), SingTel (Maroon), SIA Engineering (Orange)

Source:, top three stocks in the Straits Times Index with the highest returns over 1H13 (excluding dividends)

Source:, mean and median return statistic of all STI components














ThaiBev – Retaining Its Crown
Retaining its crown since 1Q13, Thai Beverage Public Company (ThaiBev) continued to perform strongly even in the face of the recent sell-down, mainly because of its previous acquisition of Fraser and Neave (F&N).

It could also be because of the approximately $1.4 billion it will receive from a capital reduction exercise by F&N. Analysts feel that this amount could be used to pay down loans and subsequently lowering ThaiBev’s gearing. While improvements to ThaiBev’s business arms are anticipated, market watchers also expect F&N’s contributions to figure heavily in ThaiBev’s financial performance in the following quarters.

Mid-Cap Winners – Blumont Group, Super Group, Ezion Holdings
The mid-caps, volatile yet somewhat stable counters. Mid-caps have been known to host several defensive stocks as well as growth engines such as SMRT Corporation and Biosensors International Group. Based on this index, three counters, Blumont Group (+288.5 percent), Super Group (+36.9 percent) and Ezion Holdings (+24.7 percent) snatched the titles of winners. Below, we see how the returns of these stocks compared with the index as a whole as well as against their peers.

Source: FactSet, chart on returns of the FTSE Mid Cap Index (Blue) versus Blumont Group (Green), Super Group (Maroon), Ezion Holdings (Orange)

Source:, top three stocks in the FTSE Mid-Cap Index with the highest returns over 1H13 (excluding dividends)


Source:, mean and median return statistic of all FTSE Mid-Cap components













Ezion, Interest Rate Concerns Overdone?
Ezion’s growth story has long been trumpeted by analysts. The story has continued since the $18.9 million investment made by Singapore’s Economic Development Board. In fact, the recent sell-down in markets seem to have largely missed Ezion. The main reason for this could be the fact that Ezion’s earnings have strong backing in the form of secured contracts for its fleet of 27 liftboats and service rigs. Not to mention its diverse customer base comprising of several national oil companies from various parts of the world.

Still, concern over rising interest rates seem to have eroded some of the shine from Ezion’s growth story. Indeed, analysts fear that rising interest rates could affect capital intensive oil and gas counters such as Ezion. However, owing to Ezion’s charter business, cash flows are expected to be relatively insulated from any fallout.

Small-Cap Winners – Sino Grandness, United Envirotech, Kreuz Holdings
And finally, we come to the small-caps. Easily, the most volatile of stocks, the small caps have kept some investors at bay owing to the increased perceived risks. Such risks are no bogeyman that has been trumped up by naysayers. Indeed, of the three previous winners, one (Blumont Group) went on to top the charts for the Mid-Cap Index. While of the other two remaining in the Small-Cap Index, one (Innopac Holdings, +46.1 percent) slipped down the pecking order and the last one (Sino Grandness Food Industry Group, +103.2 percent) currently sits on the top of the index.

Making up the remainder of the podium are United Envirotech (+70.3 percent) and Kreuz Holdings (+59.8 percent). Below, the graph represents how the three stocks fared against the index, while the two tables show how each stock fared and how they compared with their peers.

Source: FactSet, chart on returns of the FTSE Small Cap Index (Blue) versus Sino Grandness (Green), United Envirotech (Maroon), Kruez Holdings (Orange)

Source:, top three stocks in the FTSE Small Cap Index with the highest returns over 1H13 (excluding dividends)

Source:, mean and median return statistic of all FTSE Mid-Cap components
















Sino Grandness - Spinoff Milestone
Attained Sino Grandness has marched forward ever since our last review of 1Q13. The sole catalyst for its price appreciation continues to push it northward as a recent milestone was attained. This milestone was the pre-clearance from the Singapore Exchange needed by Sino Grandness to proceed with its spin-off.

According to Maybank Kim Eng, the remaining steps to spin off Garden Fresh will largely be under the company’s control. Thus, the research house is more confident that the proposal will go through. Assuming a successful spin-off and if Sino Grandness sells some vendor shares, Sino Grandness shareholders can expect some form of a special dividend in FY14.

Monetary Policy To Blame For Depreciation?
Quantitative easing previously thought to have pushed stock prices to astronomical heights is now perceived to be the same reason why stock prices have come hurtling back to Earth. It is without a doubt that monetary policy cuts both ways. Right now, we know this, for it is precisely because of perceived threat of a tightening of monetary policy that has caused investors to be so edgy and sell out.

Does this mean that the sell-down has created opportunities for investors to buy-in? I would not be so quick to say so. After the sell-down, it would seem that we are once again at the beginning of 2013. Tell me, do you think that anything economically concrete happened since the beginning of the year? For one, China seems to be cooling rapidly, the US seems to be recovering but elsewhere in Japan and Europe, their economic woes seem to continue without much hope of abatement. Perhaps, the real recovery will only begin when countries really start dealing with their problems instead of using only monetary policy.

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Simeon, an LSE graduate, is currently the editor of Aspire. He specialises on topics surrounding trading psychology, politics and macroeconomics.

Please click here for more information about this author.

Thai Beverage Public Co  0.900 -0.010 -1.10%   
Business: [FY18 Turnover] Spirits (46.1%), beer (41.1%), non-alcoholic beverages (7%), food (5.8%).

Insight: May-19, 1H19 revenue rose 26.1% to THB142.6b mainl... Read More
SIA Engineering Co  2.530 -- --   
Business: A leading aircraft maintenance, repair and overhaul (MRO) company providing total maintenance solutions to a client base of international airlines. [FY18 Turnover] Airframe and Line Maintenance (97.5%), Engine and Component (2.5%).

Insight: May-19, FY19 revenue was 6.8% lower at $1b largely... Read More
Singtel  3.180 -- --   
Business: Asia's leading communications group. [FY19 Turnover] Mobile Comm (31.1%), Data & Internet (19.2%), Infocomm Technology (17.5%), Sale of Eqmt (16.5%), Digital Biz (7.2%), Fixed Voice (5.2%), Pay-TV (2.1%), Leasing (0.8%), others (0.4%).

Insight: May-19, FY19 operating revenue remained flat at $1... Read More
Blumont Group  -- -- --   
Business: Co provides contract sterilization and polymerization services. [FY18 Turnover] Sterilisation (99.3%), property (0.7%).

Insight: Feb-19, FY18 revenue increased 6%. Total expenses ... Read More
Ezion Hldgs  -- -- --   
Business: Co develops, owns, and charters offshore assets to support the offshore energy markets. [FY17 Turnover] Liftboats (49.7%), Jack-up Rigs (39.5%), Offshore Support Logistic Services (10.8%).

Insight: Aug-18, 1H18, Co returned to the black with a net ... Read More

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