Monday, November 17, 2014

Largest capitalised stocks with Indonesia business !

  • More than 80 stocks listed on SGX report a revenue percentile to Indonesia - ranging from 1 to 100 percent. Of these stocks, there are 13 with market cap above S$250 million reporting more than half their revenue, income or assets to Indonesia.
  • These 13 stocks have generated mixed performances in the year to date, averaging a 0.6% YTD total return. This takes the average three year total return of the ten stocks that have been listed for the duration to 43.4%.
  • The five best performing stocks of the 13 in the year thus far have been Sinarmas Land, FIRST REIT, Petra Foods, Bumitama and Jardine Cycle & Carriage.
Indonesia’s primary listed stocks currently maintain a market capitalisation of US$406.5 billion, which is less than half the size of its US$868.3 billion Gross Domestic Product (GDP) in 2013. Like China, Indonesia’s ratio of market capitalisation to GDP is between 40 and 50 percent.

There is no practical rule of thumb that a developing or developed economy must have a certain market capitalisation to GDP ratio – for instance according to Bloomberg, Japan’s primary market cap is 78% of its GDP and Malaysia’s primary market cap is 172% of its GDP. However, one possible inference is that the higher the GDP growth or trade expansion of a country, the more likelihood of some overlapping businesses on neighbouring international stock markets.  China maintains the highest GDP in Asia and Indonesia maintains the highest GDP in ASEAN.

Hence, there are also a number of stocks listed on Singapore Exchange (SGX) that report revenue, operating income or base assets in these countries. There are more than 80 stocks that specifically report a percentage of their revenue to Indonesia, that ranges between 1 to 100 percent. This does not include those companies that geographically segment their revenue to the region such as Jardine Matheson Holdings, Wilmar International and Olam International.

Of the 80 or so stocks there are 13 stocks that maintain a market capitalisation of more than S$250 million and reporting half revenue, income or assets to Indonesia. In the year thus far, the largest capitalised stocks that report their majority revenue to Indonesia have performed better than those that report all their revenue to Indonesia. The seven largest capitalised stocks that report partial revenue to Indonesia averaged a 4.4% YTD total return.

The 13 stocks are detailed below. The effect of commodity prices on the two mining, oil & gas plays – RH Petrogas and Geo Energy Resources have been discussed in previous market updates.
Source: Bloomberg & SGX
Together the 13 stocks in the table above have averaged a 0.6% total return in the year to date. This takes the average three year total return of the ten stocks that have been listed for the duration to 43.4%. Over the past three years, the Jakarta Composite Index (JCI) generated a 3.6% total return with a 10.0% total return over the past year in Singapore Dollar terms.

The five best performing stocks of the 13 in the year thus far have been Sinarmas Land, FIRST REIT, Petra Foods, Bumitama Agri and Jardine Cycle & Carriage. These are also four of the five largest capitalised stocks that report more than half of their revenue or income to Indonesia. The most recent of the 13 stocks to list is Japfa which, following the latest semi-annual rebalancing, will join the MSCI Singapore Small Cap Index effective 26 November.

Sinarmas Land
Sinarmas Land is involved in developing and leasing properties in countries including Indonesia, China, Malaysia and Singapore. It  also develops and operates country club and golf clubs, and provides consultancy services. Some of its developments in Indonesia include Sinar Mas Land Plaza in Jakarta, Wisma BII in Surabaya, and ITC Roxy Mas in Jakarta. Sinarmas Land has a market capitalisation of S$1.8 billion and generated 2014 year-to-date total return of 26.1%. On 14 August 2014, Sinarmas Land reported revenue of S$433.8 million and profit for the period of S$194.5 million for the half-year ended 30 June 2014 (click here to view). On 4 November 2014, Sinarmas Land announced that the financial results for the period ended 30 September 2014 will be released on 12 November 2014 after trading hours (click here to view). The stock went ex-dividend on 17 June 2014, distributing S$0.005 per share in dividends.

FIRST REIT
FIRST REIT invests in real estate and real estate-related assets in Asia for healthcare purposes. Its property portfolio comprises 15 properties located in countries including Indonesia, Singapore and South Korea. The trust has 11 properties located in Indonesia.
  • Siloam Hospitals Purwakarta
  • Siloam Hospitals Bali
  • Siloam Hospitals TB Simatupang
  • Siloam Hospitals Manado & Hotel Aryaduta Manado
  • Siloam Hospitals Makassar
  • Mochtar Riady Comprehensive Cancer Centre
  • Siloam Hospitals Lippo Cikarang
  • Siloam Hospitals Lippo Village
  • Siloam Hospitals Kebon Jeruk
  • Siloam Hospitals Surabaya
  • Imperial Aryaduta Hotel & Country Club
FIRST REIT has a market capitalisation of S$891.0 million and maintained 2014 year-to-date total return of 23.3%. On 17 October 2014, FIRST REIT reported gross revenue of S$23.8 million and net property income of S$23.5 million for the third quarter ended 30 September 2014 (click here to view). The stock went ex-dividend on 24 October 2014, distributing S$0.0202 per share in dividends.

Petra Foods
Petra Foods is involved in manufacturing, marketing and distributing chocolate confectionery products. It offers chocolate and sugar confectionary products, including molded chocolate, dragees, enrobed wafers, and wafers and biscuits. The Group has an established portfolio of chocolate confectionery brand names in Indonesia including "SilverQueen" and "Ceres" which were introduced in the 1950's and "Delfi" in the 1980's. Petra Foods has a market capitalisation of S$2.2 billion and generated 2014 year-to-date total return of 20.5%. On 13 August 2014, Petra Foods reported revenue of US$131.8 million and profit after tax and minority interest of US$13.2 million for the three months ended 30 June 2014 (click here to view). On 20 October 2014, Petra Foods announced that the financial statement for the period ended 30 September 2014 will be released today, 11 November 2014, after trading. The stock went ex-dividend on 25 August 2014, distributing S$0.0273 per share in dividends.

Bumitama Agri
Bumitama Agri is involved in the production and trading of crude palm oil, palm kernel and related products. The company sells its products to refineries in Indonesia. It has a land bank of approximately 200,000 hectares in Central Kalimantan, West Kalimantan, and Riau provinces located in Indonesia. Bumitama Agri has a market capitalisation of S$1.9 billion with 2014 year-to-date total return of 17.7%. On 13 August 2014, Bumitama Agri reported profit for the period of IDR344,955 million for the second quarter ended 30 June 2014, an increase from IDR180,679 million for the previous corresponding period (click here to view).

Jardine Cycle & Carriage
Jardine Cycle & Carriage is involved in manufacturing, assembling, distributing, retailing and after-sales service of motor vehicles and motorcycles in countries including Indonesia, Malaysia, Singapore, Vietnam and Myanmar. Through Astra, Jardine Cycle & Carriage is also involved in the cultivation, harvesting and processing of palm oil with plantations in Indonesia covering approximately 284,000 hectares. It has operations in the western Jakarta water utility system, toll road operations and transportation services. Jardine Cycle & Carriage has a market capitalisation of S$14.3 billion and generated 2014 year-to-date total return of 15.2%. On 4 November 2014, Jardine Cycle & Carriage reported revenue of US$14,113 million and profit attributable to shareholders of US$646 million for the nine months ended 30 September 2014 (click here to view). The stock went ex-dividend on 27 August 2014, distributing US$0.18 per share in dividends.

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