The Central Provident Fund (CPF) system is a great way for you to accumulate savings and better prepare for your retirement.
Did you know that apart from mandatory contributions to your CPF accounts, the government also allows you to invest money that is sitting in your Ordinary Account (OA)?
You will need to open a CPF Investment Account (IA) which you can read more about HERE.
Investors tend to gravitate towards solid, blue-chip names when selecting stocks for their CPF IA.
The idea is to enjoy a good night’s sleep while allowing your money to compound over the years.
Here are four dependable blue-chip stocks that you can add to your CPF IA watchlist.
DBS Group (SGX: D05)
DBS should be a well-known name to most Singaporeans, being the country’s largest bank by market capitalisation.
The lender is considered the bedrock of Singapore’s economy along with its two peers OCBC Ltd (SGX: O39) and United Overseas Bank (SGX: U11).
DBS reported a sparkling set of earnings for the first half of 2024 (1H 2024) as higher interest rates benefitted its business.
Total income rose 11% year on year to S$11 billion on the back of a 6% year-on-year increase in net interest income.
1H 2024 net profit stood at a record high of S$5.7 billion, up 9% year on year.
In line with the good results, DBS paid out an interim dividend of S$0.54, 22.7% higher than the S$0.44 paid out a year ago.
The group’s net interest margin (NIM) stayed robust at 2.14% for the second quarter of 2024 (2Q 2024), dipping just slightly from 2.16% a year ago.
On 1H 2024 basis, NIM stayed constant year on year at 2.14%.
DBS has built resilience against lower interest rates with its interest income sensitivity reducing to just S$4 million per basis point of reduction in the Federal Funds rate, down from a range of between S$18 million to S$20 million in 2021.
CEO Piyush Gupta expects 2024 to register a mid-to-high single-digit year on year profit growth.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group serving customers in the aerospace, smart city, and defence sectors.
The group reported a strong set of earnings for 1H 2024 with revenue climbing 13.5% year on year to S$5.5 billion.
Operating profit increased by 17.7% year on year to S$522.9 million.
Net profit came in 20% higher year on year at S$336.5 million.
For 2Q 2024, STE declared an interim dividend of S$0.04, taking its trailing 12-month dividend to S$0.16.
STE snagged S$6.1 billion worth of contracts for 1H 2024, with its order book at S$27.9 billion as of 30 June 2024.
Of this order book, S$4.9 billion is expected to be delivered for the remainder of this year.
Genting Singapore (SGX: G13)
Genting Singapore is the owner and operator of the integrated resort (IR) at Resorts World Sentosa (RWS).
RWS boasts a casino, a Universal Studios theme park, S.E.A Aquarium, six hotels with around 1,600 hotel rooms, and a variety of retail, dining, and entertainment options.
The IR operator announced a strong set of earnings for 1H 2024 as the reopening of borders and resumption of travel benefitted the business.
Revenue jumped 25% year on year to S$1.36 billion while operating profit improved by 29% year on year to S$450.9 million.
Net profit also increased by 29% year on year to S$356.9 million.
Genting Singapore increased its interim dividend to S$0.02 for 1H 2024, up from the S$0.015 that was paid out in the previous corresponding period.
Management expects the travel and tourism industry to resume its recovery for the rest of 2024.
The group is also busy working on the second iteration of RWS, known as “RWS 2.0”.
New attractions such as Minion Land in Universal Studios Singapore along with the new Singapore Oceanarium are on track for a soft opening in early 2025.
Genting Singapore is also developing an all-suite hotel to replace the previous Hard Rock Hotel.
The Waterfront development, which includes two luxury hotels, is expected to begin construction in 4Q 2024.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group operates a platform for the buying and selling of securities such as equities, bonds, ETFs, and derivatives.
SGX enjoys a natural monopoly as the city-state’s only bourse operator.
In addition, its recent fiscal 2024 (FY2024) results for the year ending 30 June 2024 were also encouraging.
Revenue inched up 3.1% year on year to S$1.2 billion while net profit (excluding exceptional, one-off items) increased by 4.5% year on year to S$525.9 million.
The bourse operator upped its quarterly dividend to S$0.09 from S$0.085, bringing its annualised dividend to S$0.36, up from S$0.34 previously.
SGX intends to grow group revenue between 6% to 8% per annum in the medium term.
It will do so by realising synergies between its ferrous and freight offerings and look for growth opportunities for its foreign exchange (FX) franchise.
The group also plans to partner with players across the region and explore more collaborations to enhance its ecosystem and to offer investors access to a wider variety of securities.
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Disclosure: Royston Yang owns shares of DBS Group and Singapore Exchange Limited.
