Blue-chip stocks are renowned for their resilience as such companies have a long track record of surviving through good times and bad.
The great news is that most of them also pay out a dividend that will put a smile on income investors’ faces.
Investors should keep their eyes peeled for interesting corporate developments.
Such announcements could boost the business and allow it to report higher profits and cash flows.
And when the business does well, the stock eventually does, too.
We highlight three blue-chip stocks with recent corporate announcements that could send their share prices heading higher.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group has been evolving over the years into a multi-asset exchange that offers a wide variety of securities such as equities, fixed income, derivatives, commodity futures, and foreign exchange.
The bourse operator had just announced a strong set of earnings for its fiscal 2023 (FY2023) ending 30 June 2023.
Core net profit rose 10.3% year on year to S$503.2 million and the blue-chip exchange operator also raised its quarterly dividend from S$0.08 to S$0.085.
There could be more to come from the group as it sets its sights on steady growth.
Earlier this month, SGX announced a new corporate structure to prepare itself for continued growth and to boost its multi-asset offering.
Michael Syn, who was the head of equities since July 2019, will be appointed President and take over the Global Markets division that oversees all SGX’s products except indices.
SGX is also beefing up its exchange-traded funds (ETF) suite by partnering with BlackRock (NYSE: BLK) and MSCI (NYSE: MSCI) to list the iShares MSCI Asia ex-Japan Climate Action ETF.
This ETF tracks the MSCI Climate Action Indexes launched at the end of 2022 and is the largest equity ETF launched in Singapore with initial assets under management (AUM) of US$426 million.
With the group’s new corporate structure and the listing of this new ETF, SGX could continue to power on with higher revenue and earnings.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a global real estate manager (REIM) with S$134 billion of AUM as of 30 June 2023.
CLI also has S$89 billion of funds under management (FUM) parked in six listed REITs and business trusts with more than 30 private vehicles across the world.
Last month, the property giant successfully secured around S$1.3 billion in equity commitment from global institutional investors for three of its private funds.
Total equity raised year-to-date hit S$3.2 billion, already exceeding the S$2.5 billion raised for the whole of 2022.
CLI’s private funds’ FUM stood at S$29 billion as of 30 June 2023, up 12% year on year.
Earlier this month, CLI’s flagship regional core-plus fund, CapitaLand Open End Real Estate Fund or COREF, announced the acquisition of a Grade A logistics property in South Korea for S$112 million.
The acquisition will push COREF’s FUM to over S$1 billion.
These two developments showcase the success of CLI’s strategy in building up its FUM.
As FUM increases, CLI should also see its fee-related earnings (FRE) increase in tandem, flowing down to higher overall net profit for the property group.
Singtel (SGX: Z74)
Singtel is Singapore’s largest telecommunication company and offers a spectrum of services such as mobile, cable TV, and broadband.
The telco and global investment firm KKR (NYSE: KKR) have reached an agreement in which KKR will commit up to S$1.1 billion for a 20% stake in Singtel’s regional data centre business.
This investment values the data centre business at S$5.5 billion with KKR having the option to increase its stake to 25% at a similar valuation by 2027.
This collaboration will enable Singtel to tap on KKR’s expertise in investing in data centres and telecommunication infrastructure.
The money from the transaction will be channelled to accelerate Singtel’s regional data centre business including exploring markets such as Malaysia.
The data centre business is slated to deliver a combined capacity of over 155 MW by 2025 once three new projects become operational.
There is also room to scale the division up to more than 200 MW.
Looking ahead, Southeast Asia’s data centre market is poised to grow by 17% per annum over the next five years, underpinned by healthy demand from increased data consumption, enterprise cloud transitioning, and the rapid rise of artificial intelligence.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited.
