If you are looking to invest in reliable, established businesses, look no further than blue-chip stocks.
These companies have proven their resilience through different economic cycles and are able to provide investors with a steady rate of return.
In Singapore, the Straits Times Index (SGX: ^STI), or STI, contains the top 30 blue-chips listed on the Singapore Exchange (SGX: S68).
You can invest in the STI by buying ETFs such as the SPDR STI ETF (SGX: ES3).
This ETF mimics the components of the STI, and currently offers a trailing 12-month dividend yield of 2.9%.
In this article, we take a look at what a S$10,000 investment in the STI will buy you.
(all figures are accurate as of 23 June 2022)
S$1,856 of DBS Group (SGX: D05)
DBS is Southeast Asia’s largest bank by assets, and one of the “Big Three” local banks in Singapore.
The lender recently reported an exceptional set of earnings.
In its fiscal 2022 first quarter (1Q2022) report, DBS posted a net profit of S$1.8 billion, the second-highest in its history.
The excellent results come on the back of a record-breaking year in FY2021, where the bank delivered record-breaking profits of S$6.8 billion.
S$1,353 of OCBC Ltd (SGX: O39)
OCBC is Singapore’s longest-established bank, and the second largest financial services group in Southeast Asia by assets.
The bank’s 1Q2022 earnings report was a mixed bag.
During the quarter, OCBC’s net income fell by 9% year on year to S$2.64 billion, with non-interest income falling year on year across all categories.
Despite the results, the bank’s healthy capital position leave it well poised to capture growth from Asia’s economic recovery.
S$684 of Singtel (SGX: Z74)
Singtel is a leading communications technology company in Asia, serving more than 764 million mobile customers in 21 countries.
Last year, the telco announced a strategic review to reinvigorate its core businesses and capitalise on new growth trends such as 5G and other digital services.
While the plan sounds promising, it will take time to pay off.
In the company’s latest earnings report for the nine months ended 31 December 2021, operating revenue dipped 0.8% year on year to S$11.6 billion, although underlying net profit rose 10.8% year on year to S$1.46 billion.
S$304 of Ascendas REIT (SGX: A17U)
Ascendas REIT, or A-REIT, is one of Singapore’s largest industrial REITs.
The REIT manages a property portfolio worth S$16.4 billion across Singapore, Australia, US, the UK, and Europe as of 31 March 2022.
A-REIT has long been a popular investment choice for many new investors because of its well diversified portfolio.
With a customer base of over 1,620 tenants spread across a multitude of industries, the REIT’s portfolio remained resilient despite the challenges brought by the COVID-19 pandemic.
S$319 of Capitaland Investment Ltd (SGX: 9CI)
CapitaLand Investment, or CLI, is a global real estate investment manager (REIM) with assets under management (AUM) of S$38.7 billion and funds under management (FUM) of S$86 billion as of 31 March 2022.
CLI has its hands in a wide range of property types, including integrated developments, retail, office, lodging, industrial, logistics, business parks and data centres.
The REIM aims to grow by expanding its fund and lodging management business while maintaining prudent capital management.
S$150 of Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust or MIT, is an industrial REIT that manages 143 properties worth S$8.8 billion across Singapore and North America as of 31 March 2022.
MIT is favoured by investors who want greater exposure to data centres.
54.1% of the REIT’s property portfolio by AUM comprises of data centres, with the bulk of them in the US and Canada.
The REIT also recently released its earnings report for its fiscal year ended 31 March 2022.
During the year, MIT’s gross revenue grew 36.4% year on year to S$610 million, while net property income (NPI) rose 34.5% year on year to S$472 million.
In line with the good results, the REIT also raised total distribution per unit (DPU) for the year to S$0.138, 10% higher than the year before.
S$83 of Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is the first pure-play data centre REIT to list in Asia when it was listed on the Singapore Exchange in December 2014.
Data centres have become a booming asset class in recent years due to rapid digitalization brought about by the COVID-19 pandemic.
The REIT recently provided its business update for 1Q2022.
Gross revenue slightly decreased by 0.9% year on year to S$66.1 million, and NPI also fell 1.4% year on year to S$60.1 million.
However, the REIT managed to raise DPU by 0.2% year on year, paying out S$0.02466 for the quarter.
S$201 of Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, better known as ST Engineering or STE, is a conglomerate with a wide range of business interests.
Some of its segments include aerospace, smart city solutions, marine and defence engineering, public security and cybersecurity.
STE continues to deliver healthy growth across all segments.
In its business update for 1Q22, STE posted revenue of S$2.0 billion, 13% higher year on year and in line with pre-COVID levels.
The company also reported a strong order book of S$21.3 million as of 31 March 2022.
S$217 of Singapore Airlines Ltd (SGX: C6L)
Singapore Airlines, or SIA, needs no introduction as Singapore’s national carrier.
The airline is currently benefiting from higher passenger numbers due to pent-up travel demand as borders around the world continue to reopen.
In its latest operating report, the group reported that it carried a total of 1.45 million passengers in April 2022, 62.7% higher than the previous month and over 13 times higher than April 2021.
SIA expects that passenger capacity will continue to increase as it works to meet pent up demand for travel.
S$91 of SATS Ltd (SGX: S58)
SATS provides gateway and food services in Asia and is the chief ground-handling and in-flight catering service provider at Changi Airport.
The group operates in 55 locations across 14 countries, with over 12,000 employees.
Similar to SIA, SATS’ business outlook has improved with the wider resumption of air travel.
In addition, the company has also taken steps during the pandemic to improve its capabilities, including developing ventures for non-travel businesses, and building a central kitchen and innovation centre in India.
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Disclosure: Herman Ng owns shares of Ascendas REIT and Mapletree Industrial Trust.