The CPF is a wonderful tool to help you save for your retirement.
The Ordinary Account (OA) provides the flexibility for you to use the funds for either property or education.
You can also choose to invest the funds within the OA by opening a CPF Investment Account (CPFIA).
Currently, the OA attracts an interest rate of 3.5% for the first S$20,000 and 2.5% for amounts exceeding S$20,000.
The great thing is that you can use the CPFIA to park your CPF funds in reliable stocks that can help you get a better return than what the OA is yielding.
Here are three reliable Singapore stocks you can consider for your CPFIA buy watchlist.
United Overseas Bank (SGX: U11)
United Overseas Bank, or UOB, is the smallest of the three local banks.
The lender reported a strong set of earnings for the first half of 2023 (1H 2023) as surging interest rates boosted its net interest income (NII).
The bank’s core net profit for 1H 2023 surged by 53% year on year to a record high of S$3.1 billion on the back of a 37% year-on-year increase in NII to S$4.8 billion.
In tandem with the good results, UOB declared and paid an interim dividend of S$0.85, nearly 42% above the S$0.60 that was paid out a year ago.
The blue-chip lender also reported record-high trading and investment income that grew 15% year on year.
Its digital app TMRW in the four markets of Thailand, Indonesia, Singapore and Malaysia has garnered more than seven million retail customers digitally.
UOB also affirmed that its Citigroup (NYSE: C) acquisition is on track to achieve an annualised revenue uplift of around S$1 billion for 2023.
For 2023, the bank has projected mid-single-digit loan growth with net interest margin to remain stable.
UOB also estimates that fees will see high-single-digit year on year growth.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a pure-play Singapore suburban retail REIT.
Its portfolio comprises 10 retail malls and one office building with total assets under management of S$6.9 billion as of 31 March 2023.
FCT’s malls are well connected to public transport nodes that provide a consistent flow of shopper traffic into the malls.
In addition, slightly more than 52% of FCT’s retail portfolio’s gross rental income is derived from essential trade and services, rendering it resilient to economic downturns.
The REIT’s fiscal 2023’s third quarter (3Q FY2023) business update saw retail occupancy climb to 98.7% on firm leasing demand.
Shopper traffic for the quarter also increased by 16% year on year with tenant sales improving by 5% year-on-year.
FCT had an aggregate leverage of 40.2% as of 30 June 2023 but this should come down to 37.1% after the REIT announced the divestment of Changi City Point.
For the first half of fiscal 2023, FCT paid out a distribution per unit of S$0.0613, slightly lower than the S$0.06136 that was paid out a year ago.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The bourse operator recently reported a sparkling set of earnings for its fiscal 2023 (FY2023) ending 30 June 2023.
Revenue rose 8.7% year on year to S$1.2 billion while net profit surged 26.5% year on year to S$570.9 million.
Stripping out one-off expenses and items, net profit would still have increased by 10.3% year on year to S$503.2 million.
The group also upped its quarterly dividend to S$0.085 from S$0.08, translating to an annualised dividend of S$0.34.
Being Singapore’s only exchange operator affords the group a natural monopoly.
The blue-chip exchange believes that Asia holds significant potential for growth that will help to further SGX’s ambition to become a multi-asset hub.
Both of SGX’s commodities and foreign exchange divisions are seeing healthy volumes that look set to continue into FY2024.
The exchange will focus on expanding its suite of products to meet more market needs and to provide investors and institutional funds with more tools to manage their portfolios.
It plans to tie up with other exchanges to launch more products, such as the recent Singapore Depository Receipts, to attract higher liquidity and trading volumes.
SGX targets high single-digit % revenue growth in the medium term and is also committed to increasing its dividend per share by a mid-single-digit compound annual growth rate.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited.
