Singapore stocks: Once bitten, twice shy

[weijian]

SGX to launch index that tracks listcos beyond STI: Chee Hong Tat

[SINGAPORE] The Singapore Exchange (SGX) will be launching an index that tracks listed companies that are not constituents of the Straits Times Index (STI), as part of efforts to showcase its broader equity market, said Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat on Friday (Sep 12).

My enthusiasm was stirred up when the announcement was made. But it quickly died down after this new "small/med cap index" was revealed. At least 50% of the weightage is made of of REITs/Trusts. Out of the top10 constituents (making up ~47% of the weightage), 8 of them are REITs/Trusts with YZJFH and ComfortDelgro completing the list. Therefore, this is more like a REIT index + little bit of everything else.

That said, this is probably also symbolic of Spore as a whole, isn't it? A place where public homes change hands for million dollars (not an outlier anymore although they are still generally constrain to choicer locations/higher floors/bigger sizes).

SGX rolls out new indices to broaden visibility of listed companies beyond STI


Complementing existing benchmarks, the iEdge Singapore Next 50 Indices are designed to raise the visibility of mid-cap companies and broaden investor participation in this increasingly active segment of the market.

Luke Lim, managing director at Phillip Securities and Securities Association of Singapore (SAS) chairman, described the new benchmarks as a bridge for investors. It helps them “move from the familiarity of established benchmarks to growing confidence in Singapore’s mid-cap companies”, he told The Business Times.

Echoing this sentiment, David Gerald, the president of Securities Investors Association (Singapore), or Sias, noted that this move sets a precedent for other index providers to follow and encourages the development of new indices that spotlight different tiers of the market.

“The move also encourages companies to do more to unlock shareholder value as their viability would be recognised,” he said.

https://www.businesstimes.com.sg/compani...beyond-sti

Full list of constituents: https://api2.sgx.com/sites/default/files...tsheet.pdf

[CY09]

Hi Weijian,

I do agree with you. The large companies in Singapore are now dotted with Trust and REITs. Even Centurion, Yangzijiang Financial, Boustead and Wee hur are boosted by either they spinning off their trust/REITs or property accomodation stories. Post spin off, it is likely more Trust/REITs will be added to this next 50 basket.

If you notice, Guocoland and Ho Bee despite being 2 and 1.5 billion in market cap is not added in the next 50. Why is this so? Because they have little trading volume + the developers has been forthcoming in saying that REIT is not in their cards yet.

The developers are geared 50-70% leveragesd. The exchange on a whole are dotted with real estate trusts and partly due to Singapore being the rare few countries which allows an external managed REIT manager

[weijian]

The developers are geared 50-70% leveragesd. The exchange on a whole are dotted with real estate trusts and partly due to Singapore being the rare few countries which allows an external managed REIT manager

Hi CY09,

Your bolded portion seems to suggest that an external REIT manager is not allowed in most other countries. That is definitely not true from a legal perspective. Personally, I think internal/external REIT manager has its pros/cons and therefore plenty of nuances based on the geography's regulations, investor preferences and the availability of expertise.

It is a fact that REITs in Western markets (US/Canada) mainly uses an internal manager model because that's how it has evolved based on investor preferences, regulation preferences etc. But the internal manager model been the default isn't because an external manager is not legally allowed in these markets.

On the contrary, many countries eg. Australia and Japan actually legally require an external REIT manager. Of course, some of them go around this problem by stapling the external REIT manager with the REIT itself (like how many S-REITs are stapled securities with a REIT + Trust, hence allowing more flexibility), making the separate REIT manager effectively an internalized entity.

[weijian]

I have read some stats on how pharma (or biopharma since pharma science has since advanced to using biotech) works - (1) Slightly less than 1 in 10 of drugs that passes pre clinical trials get final FDA approval. (2) In the 1950s, it costs ~50mil to get a drug approved and that is adjusted for inflation. Since 2000s, it is 2.3bil.

So small biopharma firms with promising drug lines are almost guaranteed to be acquired by Big Pharma. And there is more venture capital investing than private equity investing involved - If only 1 out of 10 firms make it, then having just a few biopharma firms listed means that one's effective odds of failure is 100%, isn't it?

In 2001, I was still in school. But I believe on the back of AFC97, Dotcom crash 2000 and then 911, no product would have sold regardless of how much merit it has. But it make sense to keep throwing stuff on the wall and see what sticks. Incorporating failure is about trying many things, keep the failures small (most of them will fail) and doubling down on those that succeed.

The biopharma scene in Singapore is vibrant, but few make it to SGX

SGX-listed biopharma players also lack a strong track record. While there may be the rare exception, Azure Capital’s Wong said: “I struggle to think of one that made money.”

iX Biopharma, listed in 2015, has seen its market price decline over 95 per cent from its listing price; Biolidics, listed in 2018, now trades at a price that reflects a drop of more than 90 per cent from its IPO level.

In 2001, the first attempt to launch a real estate investment trust (Reit) listing on the SGX failed because of insufficient investor demand, he recalled. “So we started to educate investors,” he said, adding: “From 2004, 2005, more and more Reits started to sprout up, and then we later became the Reit capital of Asia.”

https://www.businesstimes.com.sg/singapo...ake-it-sgx

[Wildreamz]

I follow Martin Shkreli closely on YouTube and X, and he frequently posts his new picks (shorts or longs). His hit rate and slugging ratio are both high — and you can see it play out in real time (recent case being Uniqure NV (QURE)). His reasoning is usually sound and grounded in publicly available info, often PubMed articles.

Yes, the chance of failure is extremely high if you just invest blindly. But if you actually do the work — digging into trial data, drug mechanisms, and the literature — some people really can tilt the odds in their favor. At the end of the day, that’s not much different from any other form of investing.