Singapore reportedly planning to boost local stocks with Temasek Fund - which companies could benefit?
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PUBLISHED ONSeptember 22, 2021 7:15 AMBySudhan P
Bloomberg reported that Singapore is planning new measures to boost its domestic stock market by investing in local and regional mid-cap companies.
Here’s what you should know about the news report and the Singapore companies that could benefit from the stock market boost.
Temasek plans to pump in capital to boost the Singapore stock market
According to Bloomberg’s sources, 65 Equity Partners Holdings, part of Temasek with a fund size of at least US$1 billion (S$1.4 billion), will invest in Singapore and regional mid-cap firms, including initial public offerings (IPOs).
Singapore Exchange recently allowed special purpose acquisition companies (SPACs), or blank cheque companies, to list in our country .
Bloomberg added that Temasek and Singapore’s sovereign wealth fund Government of Singapore Investment Corporation (GIC) will be urged to use the new SPAC framework to encourage or facilitate the listing of tech firms in their portfolios.
The Monetary Authority of Singapore (MAS) is also involved in the effort and is looking to add to its existing measures.
Here’s an excerpt from the Bloomberg report:
“An effort to ramp up domestic investments by Temasek and GIC could help bolster Singapore’s local bourse, which has struggled in recent years with tepid listings and low liquidity.
''A paucity of tech names — one of the hottest themes in global equity markets since the pandemic began — has also affected investor interest in Singapore’s capital markets.”
The Straits Times Index , which represents the Singapore stock market, has lagged the Nasdaq by a vast margin over the past five years. Nasdaq is a barometer of how tech stocks perform in the US.
Potential beneficiaries of the Temasek capital injection
Even though the news is not confirmed, we can still look at some Singapore mid-cap companies that could benefit if Temasek indeed pumps money into the sector.
We can use stocks that are part of the FTSE ST Mid Cap Index for this exercise.
The index consists of mid-cap companies (as the name suggests) and represents around 18 per cent of the Singapore stock market capitalisation.
| Company Name | Ticker | Share Price ($, unless otherwise stated) |
Price-to-Earnings (P/E) Ratio | Price-to-Book (P/B) Ratio | Dividend Yield (per cent) | Market Cap ($' million, unless otherwise stated) |
|---|---|---|---|---|---|---|
| Ascott Residence Trust | HMN | 0.98 | - | 0.8 | 3.1 | 3058.0 |
| CDL Hospitality Trusts | J85 | 1.15 | - | 0.9 | 4.3 | 1413.0 |
| CapitaLand China Trust | AU8U | 1.29 | - | 0.8 | 4.9 | 1959.6 |
| ComfortDelGro | C52 | 1.56 | 54.7 | 1.2 | 0.9 | 3381.1 |
| First Resources | EB5 | 1.47 | 17.6 | 1.7 | 2.0 | 2319.2 |
| Frasers Centrepoint Trust | J69U | 2.29 | 25.7 | 1.0 | 2.6 | 3891.3 |
| Frasers Logistics & Commercial Trust | BUOU | 1.49 | 12.0 | 1.3 | 4.4 | 5477.8 |
| Golden Agri-Resources | E5H | 0.235 | 71.0 | 0.5 | 2.0 | 2982.6 |
| Hutchison Port Holdings Trust | NS8U | US$0.21 | 17.1 | 0.5 | 7.4 | US$1829.3 |
| Haw Par | H02 | 11.91 | 22.0 | 0.8 | 2.5 | 2635.1 |
| Keppel Infrastructure Trust | A7RU | 0.54 | - | 2.4 | 6.9 | 2695.2 |
| Keppel DC REIT | AJBU | 2.54 | 25.9 | 2.0 | 3.4 | 4355.4 |
| Keppel REIT | K71U | 1.07 | - | 0.8 | 5.0 | 3943.2 |
| Mapletree North Asia Commercial Trust | RW0U | 1.01 | - | 0.8 | 6.0 | 3523.7 |
| Nanofilm Technologies | MZH | 4.09 | 46.7 | 5.9 | - | 2693.3 |
| NetLink NBN Trust | CJLU | 0.975 | 40.1 | 1.4 | 5.2 | 3799.5 |
| OUE Commercial REIT | TS0U | 0.44 | - | 0.8 | 5.5 | 2392.7 |
| Olam | O32 | 1.61 | 31.4 | 1.0 | 4.0 | 5941.6 |
| Parkway Life REIT | C2PU | 4.75 | 32.9 | 2.4 | 2.9 | 2873.7 |
| Raffles Medical | BSL | 1.36 | 38.5 | 2.8 | 1.8 | 2540.1 |
| SATS | S58 | 3.95 | - | 2.9 | - | 4432.2 |
| SIA Engineering | S59 | 2.08 | - | 1.5 | - | 2334.8 |
| SPH | T39 | 1.94 | - | 0.9 | 1.3 | 3087.5 |
| SPH REIT | SK6U | 0.92 | - | 1.0 | 2.9 | 2562.3 |
| Sembcorp Industries | U96 | 1.86 | - | 1.0 | 2.1 | 3323.1 |
| Sembcorp Marine | S51 | 0.083 | - | 0.6 | - | 2605.2 |
| Sheng Siong | OV8 | 1.49 | 16.2 | 5.7 | 4.4 | 2240.2 |
| Singapore Post | S08 | 0.66 | 45.3 | 1.2 | 1.7 | 1484.7 |
| StarHub | CC3 | 1.21 | 14.0 | 5.9 | 4.1 | 2095.0 |
| Suntec REIT | T82U | 1.43 | - | 0.7 | 5.1 | 4072.5 |
| Thomson Medical | A50 | 0.085 | 157.4 | 4.6 | 17.6 | 2247.4 |
| Venture | V03 | 18.72 | 18.3 | 2.1 | 4.0 | 5439.2 |
| Wing Tai | W05 | 1.85 | 32.7 | 0.4 | 1.6 | 1423.3 |
| Yangzijiang Shipbuilding | BS6 | 1.56 | 11.8 | 0.9 | 2.9 | 6003.6 |
| Yanlord Land | Z25 | 1.18 | 4.3 | 0.3 | 5.8 | 2279.2 |
Source: Shareinvestor
Some of the major investments that are already part of Temasek’s portfolio include SATS and Sembcorp Marine.
And a few of the better-performing companies are Keppel DC REIT, Parkway Life REIT, and Sheng Siong.
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Of course, Temasek could look to invest in other mid-cap companies that are not part of the index (provided the investment company is indeed planning to boost the local stock market as per the Bloomberg report).
We will never know for sure until things are confirmed.
As always, remember to do your own research before investing in any company and that stocks are not mere pieces of paper to be traded; they represent part-ownership in businesses.
We will be updating this article as more details emerge so do bookmark it for future reference!
This article was first published in Seedly.