One of the most under-appreciated markets & largely ignored by young Singaporeans is the SGX market.
SGX Market is largely characterized by:
However, there are some real gems in this part of the world too. Hence, in this Blog post, I will be sharing Benjamin’s Top SGX dividends picks.
#1 NIKKOAM-STC ASIA EX J REIT ETF(CFA.SI)
Ticker CFA.SI has been one of my long-time favorite stocks Because.
- Averaging a dividend yield of 4%-5% (Since inception)
- Its an ETF with properties concentrated in Asia’s most developed cities
- The Stock is not volatile & Highly Liquid
- Available to buy from POSB Regular Saving Plan with a low transaction fee of 0.82% Per trade.
- Low Effort, buy and forget about it.
#2 NetLink NBN Trust (CJLU.SI)
Appointed as the sole Network Company (“NetCo”) in Singapore, NetLink is the only company that can lay optic fiber underground. It generates income when telecom companies use their fiber network. Netlink dividends yield hovers a little over 5% per annual.
Netlink Trust Core business is protected by IMDA(regulatory body), hence the company enjoys a certain level of “Guaranteed” future cash flow. However, growth in terms of revenue from its core business is very limited as prices are closely regulated.
#3 SINGAPORE TECH ENGINEERING LTD (S63)
One of Singapore’s largest technology engineering companies, STE has 3 streams of income.
- “Defence & Public security”(Largest)
- “Commerical Aerospace”
- “Urban solution & Satcom” (Smallest)
The company has traditionally issued a yield of 4%~5%. It is widely considered one of Singapore’s Blue Chip fossil stocks.
Although labeled as a tech/innovative stock, the P/E ratio is trading at a reasonable premium. This is because potential customers are rather limited, and the North America, China, and Europe market have their own advanced domestic players. Hence an annual review of the financial health of the company is required, because of more sophisticated & intense overseas competition.
#4 Singapore exchange limited (S68)
The only exchange in Singapore, SGX has a monopoly in Equities & Fix-income listing in Singapore. It generates a yield between 2.5%~3.5% per annual.
However, many “A” tier ASEAN companies would still choose to be listed on the American exchange. To be fair there are quite a number of hidden gems listed on the SGX exchange from the APAC region, particularly REITs listing.
In my opinion, the SGX’s continual success is heavily reliant on good/transparent governance, political stability & strong and stable SGD.
According to tradingeconomics Singapore has seen its highest level of capital surplus in its history, & many economists agree that Singapore is one of Asia’s best financial hubs, as evident by the increasing capital inflow to the country.
However, a yearly review of this stock is required as sudden changes in the economical environment may drastically influence the risk profile.
#5 Nikko AM Singapore STI ETF
It tracks SGX’s top 30 blue chip stocks and provides a yield of around 3.5~3.8%. STI ETF is heavily weighted towards the financial sector of Singapore with Singapore’s 3 largest banks making up approximately 40% of the NAV of portfolio. The other 60% comprises of S-REITs and industry pillars of Singapore. These are all mature dinosaur companies with a healthy cash flow (mostly). It’s a buy and forget about it kind of stock.
#6 Special mention: Wilmar int
A great stock with its core business in agriculture essential consumable industry. Wilmar intr has a lot of advantages compared to its competition. They have a vertically integrated business model, with a streamlined process flow. Heavily invest in R&D food science and has won multiple awards for the quality of the food products. However, the biggest concern for me is their leadership is entirely made of the late 60s to 70+ senior citizens. There might be a knowledge/skill gap if the current c-suite team retires.