The quickest way to get acquainted with the largest companies in a country is through its stock market index.
In Singapore, the representative index is the Straits Times Index (SGX: ^STI).
The STI consists of the 30 largest companies listed on the Singapore Exchange (SGX: S68), and the index widely considered to be the barometer of the Singapore stock market.
However, not all companies hold equal weight within the STI.
Just the 10 biggest companies alone account for more than 70% of the index’s weight.
Let’s take a closer look at these companies and their recent performance.
|Company||Ticker Symbol||Industrial Classification Benchmark (ICB) Subsector||Index Weight|
|DBS Group Holdings||D05||Banks||18.16%|
|Oversea-Chinese Banking Corporation||O39||Banks||13.49%|
|United Overseas Bank||U11||Banks||12.41%|
|Singapore Telecommunications||Z74||Telecommunications Service Providers||6.36%|
|Jardine Matheson Holdings||J36||General Industrials||5.34%|
|CapitaLand Integrated Commercial Trust||C38U||Real Estate Investment Trusts||3.48%|
|CapitaLand Investment||9CI||Real Estate Investment and Services Development||3.28%|
|Keppel Corporation||BN4||Oil Gas and Coal||3.22%|
|Ascendas Real Estate Investment Trust||A17U||Real Estate Investment Trusts||3.10%|
|Wilmar International Limited||F34||Food Producers||2.87%|
Source: FTSE ST Index Series factsheet, as of 31 May 2022
Blue chip stocks
In Singapore, the STI components are referred to as blue-chips.
Blue-chip companies are typically defined as large, well-recognized companies with a long track record of success.
These companies have proven their resilience through multiple economic cycles, and offer investors peace of mind that the company is run by a competent management team.
The top 10 blue chips
Singapore’s big three banks dominate the STI.
DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp. Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) are the only component stocks with a double digit weightage, and account for over 44% of the index.
The heavy allocation means that the STI will be disproportionately affected by the performance of Singapore’s financial services industry.
Strong recovery, but uncertain times ahead
Many of Singapore’s blue chips weathered the COVID-19 pandemic admirably.
DBS Group recently posted its second-highest profit on record for its fiscal 2022 first quarter (1Q22), hot on the heels of a record-breaking 2021.
Elsewhere, Singapore Telecommunications Limited (SGX: Z74) also reported positive news.
The telco doubled its final dividend for FY2022, paying out S$0.048 per share.
Looking ahead, Singtel is also anticipating the continued recovery of air travel, which should boost demand for roaming and postpaid SIM cards.
Real estate giant CapitaLand Investment Limited (SGX: 9CI), or CLI, also posted a strong set of results in its first-ever fiscal 2021 (FY2021) full-year earnings.
CLI posted an operating profit of S$1.1 billion, reversing the operating loss of S$157 million in the prior year.
Two CapitaLand-sponsored REITs also feature in the STI’s top 10.
CapitaLand Integrated Commercial Trust (SGX: C38U) recently saw its share price hit a 52-week high, while Ascendas REIT (SGX: A17U) maintained its spot which it has held since 2014.
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Disclosure: Herman Ng owns shares of CapitaLand Integrated Commercial Trust and Ascendas REIT.