A new year brings along a fresh start.
For those who have yet to nail down your New Year resolutions, one of them might be to revamp and refine your investment portfolio.
It’s been almost a full year since the COVID-19 pandemic broke out, and the crisis has taught valuable lessons on businesses and portfolio management.
As investors, we should be flexible and adaptive, and not to get locked into fixed mindsets.
And as the world changes, we should also change along with it.
Another lesson to learn is not to have too large a position in either one stock or sector.
Unexpected events could maul that stock and cause your investment portfolio to suffer.
Resilient stocks with strong business moats will, however, always have a place in an investor’s portfolio.
Here are three stocks that should pave the way for growth and stable returns for 2021.
DBS Group Holdings Ltd (SGX: D05)
DBS is Singapore’s largest bank and offers a comprehensive suite of services for individuals and corporations.
The lender had been impacted by the pandemic last year and had to make large provisions for possible bad loans, denting its overall net profit.
Total income for the first nine months of 2020 rose 2% year on year to S$11.3 billion but net profit after allowances took a hit, declining by 24% year on year to S$3.7 billion.
DBS declared a quarterly dividend of S$0.18, in line with the Monetary Authority of Singapore’s (MAS) call for banks to moderate their dividend payments.
However, investors have something to look forward to this year as CEO Piyush Gupta expects a strong economic rebound in Asia.
This should support mid-single-digit loan growth for the bank, along with a double-digit year on year fee income growth.
Also, the number of allowances to be taken in 2021 is expected to be lower compared to 2020, barring a significant deterioration in economic conditions arising from the crisis.
If conditions improve, investors could see DBS reinstating its quarterly dividend back to the S$0.33 level before MAS stepped in.
Venture Corporation Limited (SGX: V01)
Venture is a leading global provider of technology products, services and solutions.
The group manages a portfolio of more than 5,000 products and employs around 12,000 people worldwide.
Venture is seeing a quarter on quarter recovery as the group experiences broad-based growth across its technology domains.
Revenue for the third quarter stood at S$818.4 million, 19.2% higher than the second quarter, while net profit climbed by 14.2% on quarter to S$80.2 million.
Recall that the group had bumped up its interim dividend from S$0.20 to S$0.25 back in August last year on the back of improving fundamentals and better prospects.
Venture expects to deliver a stronger second half compared to its first half, and also plans to release new products and solutions for customers in 2021 to boost sales.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group maintains a platform for the buying and selling of securities such as equities, derivatives and bonds. It also provides listing and settlement services for listed companies.
In July 2020, SGX announced record-high revenue for its fiscal year 2020 ended 30 June 2020 as derivative volumes surged amid inflows into the region.
Quarterly dividend also inched up from S$0.075 per quarter to S$0.08, reflecting confidence in the bourse operator’s prospects.
One way to track how well the group is doing is to monitor its monthly trading statistics.
For its November 2020 market statistics, SGX reported that equity index futures volumes saw a healthy month on month increase, led by a 104% surge in the SGX FTSE Taiwan Index Futures.
Total foreign exchange futures traded volume also rose 12% year on year while securities daily average value, a measure of trading volumes, climbed 63% month on month to S$1.7 billion.
SGX continues to collaborate with partners to expand and extend its reach into the region.
Early last month, it signed a memorandum of understanding with China Central Depository & Clearing Co to strengthen and promote Singapore and China’s bond markets.
If trading volumes and value continues to rise along with improved market sentiment, investors should see SGX report strong numbers when it releases its fiscal 2021 first-half earnings on 22 January.
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Disclaimer: Royston Yang owns shares in DBS Group Holdings Ltd and Singapore Exchange Limited.