STI led by Travel & Leisure, Banks in Sep quarter

As of Friday, the Straits Times Index (STI) had firmed 1.9% in price over the third quarter, with dividends boosting the return to 3.2%, according to the latest My Gateway email update by the Singapore Exchange. The impact of dividends was strongest in the month of August when almost two thirds of STI constituents made distributions.

The two strongest segments of the STI over the quarter-to-date (QTD) were Travel & Leisure and the Banks.

As of the Friday close, the three STI companies that represent the Travel & Leisure Sector, led by Genting Singapore, averaged a 6.8% quarterly price gain with dividends boosting the average total return to 7.9%. Over the same timeframe, the three banks that are a part of the STI, led by DBS Group, had averaged a 6.1% price gain with dividends boosting that average return to 7.6%.

Together, these two sectors of the STI provide services to local and international customers and their performance suggests those travel & leisure services in addition to banking services were less affected by the regional volatility of the third quarter. As of Friday, the MSCI South East Asia Index had declined by 3.1% in the third quarter after taking into account dividends.

The three STI companies that represent the Travel & Leisure sector (and QTD total returns) are Genting Singapore (+11.0%), ComfortDelgro (+8.2%) and Singapore Airlines (+4.6%). The three banks that are a part of the STI (and QTD total returns) are DBS Group Holdings (+8.4%), UOB (+8.2%) and OCBC Bank (+6.2%).

The 30 stocks of the STI represent as many as 14 different sectors as defined by the Industry Classification Benchmark. The segments of the STI constituents that were most affected by the volatility of the third quarter were General Retailers through Jardine Cycle & Carriage, and General Industrials, represented by Jardine Matheson, Jardine Strategic and Noble Group.

The QTD price and total returns of the 30 STI stocks are detailed in the table below. While Hutchison Port Holdings generated the second best total return in the QTD, the decline in SIA Engineering, meant the two Industrial Transportation stocks averaged a 4.7% total return in the QTD.