Singapore’s Top 5 Dividend-Paying Blue-Chip Stocks
Ref:https://www.temasek.com.sg/en/what-we-do/our-portfolio.html
By Chin Hui Leong
Blue chips, or the 30 stocks that make up the Straits Times Index (SGX: ^STI), tend to be well-known amongst investors in Singapore.
A recent SGX report* provided some insights to the dividend yields of these 30 blue-chip stocks.
The yield of the SPDR STI ETF (SGX: ES3), an exchange-traded fund that mimics the fundamentals of the Straits Times Index, can serve as useful context when looking at the yields of the blue chips. As of 25 October 2017, the SPDR STI ETF was offering a yield of 2.99%.
Here are the five highest-yielding blue chips (figures as of 20 October 2017, unless otherwise stated):
- Hutchison Port Holdings Trust (SGX: NS8U) tops the list with a trailing distribution yield of 7.5%. But don’t rejoice just yet. The container port owner and operator had cut its distribution per unit in 2015 by 16%. In 2016, the business trust further reduced its distribution by 11% year-on-year. To add to the pain, 2017’s first half saw yet another 32% cut in distributions.
- Local telco StarHub Ltd (SGX: CC3) is offering the second highest yield at 6.7%, based on a trailing dividend per share of 18 cents. However, dividends are expected to fall as StarHub management has guided for dividends of 16 cents per share in 2017. Furthermore, StarHub recorded lower sales in its three out of its four business segments for the first half of 2017. Competitive pressure is also expected to rise when the fourth telco makes its debut in 2018.
- Ascendas Real Estate Investment Trust (SGX: A17U) takes third place with a distribution yield of 6.6%. For the financial year ending 31 March 2017 (FY16/17), the real estate investment trust’s (REIT) distribution per unit (DPU) increased by 2.5% amid headwinds in the industry. On 20 October 2017, chief executive of the REIT manager Chia Nam Toon resigned for personal reasons.
- Another REIT, CapitaLand Commercial Trust (SGX: C61U) is offering a distribution yield of 5.6%, making it the fourth highest yield. In 2016, the commercial-based REIT increased its DPU to 9.08, up from 8.62 cents in 2015. For the first nine months of 2017, the adjusted DPU was increased 4.8% year on year. CapitaLand Commercial Trust continues to face a challenging commercial rental environment with market occupancy at a five-year low.
- Last but not least, CapitaLand Mall Trust (SGX: C38U) rounds out the list with a trailing DPU yield of 5.5%. The REIT’s DPU slipped 1% from 2015 to 2016. For the first nine months of 2017, CapitaLand Mall Trust has been able to maintain its DPU. The REIT is in the process of redeveloping Funan Digitalife Mall amid a soft retail environment.
Of course, the highest dividend yield is not always the best dividend yield. As investors, we should be looking for companies that can sustain – or even better, grow! – their dividends over the long term.
Our team at Stock Advisor Singapore is particularly wild about not only high, but also highly sustainable dividend payers. Which is why Fool Singapore CEO and Stock Advisor Singapore Lead Advisor David Kuo recently put the finishing touches on a new 18-page special report that we believe will help any dividend-minded investor.
It’s called “Separating the REIT From the Chaff,” and you can download this report completely free of charge today!
Singapore’s Temasek expands portfolio, but says it may slow down investments as global risks grow
- Singapore’s state-owned investment firm Temasek Holdings said its portfolio grew to a record 308 billion Singapore dollars ($235 billion) in the year to March 31.
- That’s a 12 percent year-over-year increase in Singapore dollar terms.
Singapore’s state investment firm Temasek Holdings said Tuesday the value of its portfolio jumped above 300 billion Singapore dollars for the first time ever.
The company said the size of its portfolio grew to 308 billion Singapore dollars ($235 billion) in the year ended March 31, representing a 12 percent increase year-over-year in local currency terms.
In the past year, the company made investments worth 29 billion Singapore dollars and divested 16 billion Singapore dollars.
Growth in its portfolio size came on the back of an 18 percent year-over-year increase in MSCI's Asia shares ex-Japan index in the year to March, while Singapore's main index rose 8 per cent.
But Temasek warned that the current financial year is shaping up to be a challenging one, given rising trade and geopolitical tensions. Some monetary and financial stresses are also observed in a number of key economies, the company said.
“We are tempering our investment pace in the year ahead, but remain open to intrinsically investable opportunities, including counter-cyclical ones,” Lim Boon Heng, Temasek’s chairman, wrote in the company annual report that was released on Tuesday.
In the past year, a number of companies that Temasek has a stake in have experienced surges in their share prices. Singapore’s DBS Bank saw shares jumped 42 percent, while in Hong Kong, China Construction Bank Corp and Industrial and Commercial Bank of China rose 29 percent and over 32 percent, respectively.
Temasek — an active equity investor — is owned by the government of Singapore, a tiny but wealthy Southeast Asian nation.
Temasek, which invested mainly in Singapore companies in its early days, have turned into a global player in recent years. More than 70 percent of the company’s portfolio exposure is now outside its home country and spreading across other Asian nations, Europe and the Americas.
It has also increased its stake in start-ups. Last month, Temasek and Singapore state fund GIC were among the main investors in a $14 billion fundraising by China’s Ant Financial – a spin-off from technology giant Alibaba.
The investor also backed Indonesian ride-hailing firm Go-Jek and led a $502 million investment in Magic Leap, a U.S. startup developing augmented reality tech products.
The approach to focus on sectors such as technology, life sciences and non-bank financial services is one that’s likely to stay, according to Temasek.
“This on-going active investment stance is focused on solutions for a better, smarter and more connected world over the medium to long term,” Lee Theng Kiat, executive director and chief executive of Temasek International, said in a statement.
Ref:https://www.cnbc.com/2018/07/10/singapores-temasek-holdings-releases-annual-report.html
Temasek loses at least S$1.2b in 5 months for betting on Bayer
It was reported in Apr this year that German drugmaker Bayer sold 3.6 per cent stake to Singapore's Temasek Holdings for 3 billion euros at 96.77 euros per share.
The money is used as part of Bayer's plan in a $62.5 billion takeover of seed maker Monsanto. Together with its existing holding in Bayer, Temasek would own about 4 percent in Bayer after the transaction.
"This investment affirms our business strategy including the proposed acquisition of Monsanto, as well as Bayer’s strong growth prospects," said Bayer.
Bayer would also be issuing rights issue thereafter to fund the Monsanto takeover, which means Temasek may end up buying more Bayer shares.
By Jun, with Temasek's help, Bayer successfully acquired Monsanto to become the biggest seed and agricultural chemical maker in the world. The combined unit will be based in Monheim, Germany, while the North American business and seeds division will be led from St. Louis.
To soothe regulators’ concerns about whether enough competitors would remain in the market, Bayer agreed to sell about 7.6 billion euros in assets to BASF. They include field seeds as well as Bayer’s vegetable-seeds business, some seed treatments and digital farming projects.
Bombshell from Monsanto court case
Last month (10 Aug), in a California court, the jury ruled against Monsanto and decided that its weed killer, "Roundup", has caused cancer in a former school groundskeeper, Mr Lee Johnson.
Working for a school district in California, Mr Johnson mixed and sprayed hundreds of gallons of "Roundup". He was diagnosed with cancer in 2014, and in July 2017, after chemotherapy and other treatments, his oncologist gave him six months to live. His lawyers, relying on his testimony and expert witnesses, argued that his exposure, including accidents that got him soaked from head to toe in Roundup, had caused his non-Hodgkin’s lymphoma.
Mr Johnson's lawyers added that Monsanto scientists actually knew of the cancer risk posed by Roundup as far back as the 1970s, but failed to inform the public and instead engaged in a "deliberate effort to distort the truth” as the weed killer generated hefty returns. Also, they asserted that Monsanto knew that testing of the weed killer was insufficient, and that employees “ghostwrote” favorable scientific articles and paid outside scientists to publish the articles under their names.
But Monsanto's lawyers argued that the short period between Mr Johnson’s first exposure in 2012 and his diagnosis in 2014 made any connection between his contact and the disease impossible. They told the jury that no one has yet figured out what causes non-Hodgkin’s lymphoma.
In any case, the jury awarded damages of US$289 million to Mr Johnson - US$39 million for his losses and US$250 million to punish the Monsanto after finding it liable for a design defect and failing to warn consumers of its herbicide risks. Monsanto said it will appeal.
More than 5,000 pending cases going against Monsanto
The trial was an important test of the evidence against Monsanto and will serve as a template for litigating at least 5,000 more claims over the herbicide, "Roundup". The company continued to maintain that its herbicide did not cause Mr Johnson's cancer.
A Bloomberg analyst said that if the litigation generates more verdicts against Monsanto, it could have a material impact on Bayer’s bottom line. Since "Roundup" is ubiquitous in modern farming, there’s a huge potential liability against Bayer.
The analyst also think that Bayer investors might not be aware of the risks because many analysts covering the company focus on pharmaceuticals.
Glyphosate, the main ingredient in "Roundup", was first approved for use in Monsanto’s weed killer in 1974. While becoming the world’s most popular and widely used herbicide, the question of whether it causes cancer has been hotly debated by environmentalists, regulators, researchers and lawyers.
"We are proud that an independent jury followed the evidence and used its voice to send a message to Monsanto that its years of deception regarding Roundup is over and that they should put consumer safety first over profits,” Mr Johnson's lawyers said after the verdict was announced.
Bayer's share price drops considerably
Bayer's shares immediately fell sharply on the Monday (13 Aug) following the verdict in California on Friday (10 Aug), but Bayer declined to comment on any potential liabilities.
Bayer shares on 13 Aug (the first trading day after the verdict announcement from California) closed at a nearly 5-year low, falling 10% to 83.73 euros.
As at yesterday's closing (14 Sep), Bayer's shares fell further trading at 71.82 euros:
Since Temasek bought 3 billion euros worth of shares at 96.77 euros in Apr, that means it has lost 24.95 euros per share or 25.8% of the 3 billion euros investment. So, in 5 months, Temasek has lost 774 million euros or S$1.2 billion. This does not include any rights issue which Temasek might have dumped further money into Bayer.
Analysts at Barclays said the California court verdict is “likely to create a litigious headache for Bayer”.
The next trial involving Roundup, also a state case, is scheduled to begin in October in St. Louis. Dates for lawsuits in federal courts have yet to be set.
Sales of "Roundup" make up the bulk of Monsanto’s agricultural productivity division, which generated US$3.7 billion in sales last year - about 25 per cent of Monsanto’s total revenue.
In any case, it's not known if Temasek people knew about the US court cases of Monsanto when they decided to invest in Bayer and back Bayer to acquire Monsanto. Even if they did, they must have thought that Monsanto is sure to win in all the court cases in US - a very easy assumption to make since those Temasek fund managers are not gambling with their own money anyway.
No comments:
Post a Comment