The Straits Times Index (STI) has seen many years with dismal returns but the sleepy stereotypical image was dashed on 10 Nov 2020. Thanks to the vaccine announcement, the Singapore stock market came alive and gained almost 100 points or 3.7% in one day!
The fortunes were reversed – the stocks that suffered during Covid-19 bounced up strongly while those that prospered previously were beaten down on 10 Nov 2020. I am not sure if this trend will continue.
Regardless, let’s breakdown the performances by sectors for this historical day.
Aviation and Transport
SIA was probably the most important company for Singaporeans in 2020. Our national pride was in trouble and had to raise money from shareholders to stay afloat. The sovereign wealth fund, Temasek, has also stood by SIA. Retiring aircraft, laying off staff, storing aircraft in the dessert, opening an A380 restaurant, offering training to the public, and redeploying staff to other industries – SIA creatively sought ways to sustain itself through the crisis.
Fortunately, the vaccine news came early and the stock market rallied. Airlines were the clear beneficiaries as they are much closer to a travel recovery.
SIA gained 14% while SIA Engineering and SATS were up 11%.
ComfortDelGro’s taxi business count tourists as key customers has also seen its share price gone up by 6%.
- SIA (SGX:C6L) +14%
- SIA Engineering (SGX:S59) +11%
- SATS (SGX:S58) +11%
- ComfortDelGro (SGX:C52) +6%
Hospitality
Hotels in Singapore had to survive on government grants and some earned by serving quarantined guests. There are currently 226 hotels (as of 6 Nov 2020) that have been approved for business and mostly catering to staycations. As such, Singapore hotel stocks didn’t fare as badly as those with overseas exposure.
ARA US HTrust (SGX:XZL) was the best performer with a whopping 20% gain in a day. It only has hotels in US and has constantly been weighed down by the escalating Covid cases in the country. Ascott Trust has a global exposure and that also means having operations in places badly hit by Covid-19 (Europe for an example). Its stock price managed to gain 12%.
Genting Singapore badly needs the tourists to visit its casinos and spend at the theme parks. The vaccine was a respite from the bleak situation.
- ARA US HTrust (SGX:XZL) +20%
- Ascott Trust (SGX:HMN) +12%
- Shangri-La (SGX:S07) +11%
- Far East HTrust (SGX:Q5T) +8%
- Genting Singapore (SGX:G13) +7%
- Amara (SGX:A34) +6%
- Hotel Properties (SGX:H15) +5%
- Frasers HTrust (SGX:ACV) +5%
- Mandarin Oriental (SGX:M04) +4%
- Banyan Tree (SGX:B58) +4%
Oil and Gas
Sembcorp Industry and Sembcorp Marine had a divorce in a tough 2020. The separation was a hard one and shareholders of Sembcorp Marine were left with a sour taste. It was nonetheless comforting to see the share price gain 9% in one day.
I was surprised that Keppel Corp (SGX:BN4) didn’t do as well. It was up 3%.
- Sembcorp Marine (SGX:S51) +9%
- Baker Tech (SGX:BTP) +9%
- Mermaid Maritime (SGX:DU4) +5%
- Rex Intl (SGX:5WH) +5%
Banks
DBS did well with a 6% gain which I think took many by surprise since it is often difficult for the largest company in the exchange to make a substantial move – you need a lot of demand to push up the share price. It even did better than OCBC and UOB which were up only by 4% and 3% respectively.
- DBS (SGX:D05) +6%
- OCBC (SGX:O39) +4%
- UOB (SGX:U11) +3%
Commercial REITs
Work-from-home (WFH) was the theme in 2020. Some employees finally get a taste of WFH over an extended period of time. The feelings towards WFH were mixed, based on my interaction with others. Parents tend to prefer to work in peace and that means getting away from kids at home, while singles prefer WFH.
With WFH widely adopted, the was an air of uncertainty that hung over the future of office real estate. The share price of many office REITs jumped on the news of vaccine and this means that investors believe that employees will go back to office once Covid blows over.
- Manulife REIT (SGX:BTOU) +6%
- Lippo Malls (SGX:D5IU) +5%
- Suntec REIT (SGX:T82U) +4%
- Cromwell REIT (SGX:CSFU) +4%
- CICT (SGX:C38U) +4%
Healthcare
Healthcare and travel are not the most obvious association that one might have. Covid-19 is a health scare but healthcare stocks didn’t do well on the contrary. This is because healthcare services in Singapore serve regional patients and benefit from medical tourism. With travel put to a halt, many of these healthcare stocks were punished by the investors. Hence, a vaccine may resume travel and make medical tourism great again.
The outlier was ParkwayLife REIT (SGX:C2PU) which saw its share price decline 7% while the rest of the healthcare stocks were up. Beats me.
- First REIT (SGX:AW9U) +5%
- HC Surgical (SGX:1B1) +5%
- IHH (SGX:Q0F) +4%
- TalkMed (SGX:5G3) +4%
- ParkwayLife REIT (SGX:C2PU) -7%
Glove makers
Glove maker stocks were the best performers in the Singapore stock market. We are talking to the tune of over 1,000%!
The companies had to expand production capacity to cope with the overwhelming demand. The backlog of orders were endless and the revenue and profits kept increasing.
The vaccine could effectively put an end to this and return to the baseline orders. This is a “make all you can while you last” kind of business.
- Sri Trang (SGX:NC2) -17%
- Riverstone (SGX:AP4) -17%
- UG Healthcare (SGX:8K7) -17%
- Top Glove (SGX:BVA) -8%
Industrial and Logistics REITs
Humans can stop travelling but supplies can’t. Logistics played a crucial role during the lockdowns, continuing to supply necessities to supermarkets and homes. With retail shops closed, e-commerce became a key channel to buy stuffs and this leads to more logistical demands. Hence, the industrial and logistic REITs’ share prices weren’t impacted by Covid-19 at all. Until now.
Keppel DC REIT was a darling among local stock investors. WFH would lead to more data consumption as data had to be transmitted to individual homes instead of a common office. Investors believed that more servers are needed and more real estate needed to house these servers. The vaccine news reversed this thinking and Keppel DC tanked by 6% in a day.
- Frasers L&C (SGX:BUOU) -5%
- Mapletree Ind (SGX:ME8U) -5%
- Mapletree Log (SGX:M44U) -5%
- Keppel DC (SGX:AJBU) -6%
Still too early to tell…
My stance hasn’t changed since I covered the US stocks the day before. I believe this is a knee jerk reaction. The vaccine hasn’t been approved to be widely used yet. Also, the manufacturing, distribution and administering the doses would take time. The vaccines need ultra-low temperature (-70 degree Celsius) storage too. It would be a logistical nightmare and many medical facilities may not have such fridges for this purpose.
But I am happy to see some of the beaten down stocks stage a strong rebound. Every dog has its day. 10 Nov 2020 was that day. Let’s see what happens next.
