by Tan Shih Ming
SINGAPORE, Dec. 31 (Xinhua) -- Singapore bourse concluded the year almost unchanged, compared to 19.7 percent jump in 2012, and most analysts were divided about the performance of local stocks in 2014.
Singapore's benchmark Straits Times Index inched up 0.01 percent in 2013 to 3167.43 points. The local bourse was unable to maintain the upward momentum of previous year, even touched as low as 2,990.68 points at one time on Aug. 28, mainly due to persistent concern about when the United States would scale back its massive bond-buying program. But with the Federal Reserve's announcement in December that it will begin trimming its bond- purchasing in the new year, the market index managed to gain firmer footing towards the end of the year.
Among the index stocks, Thai Beverage chalked up gain of 35 percent in the year, whereas Jardine Cycle and Carriage suffered loss of 25.3 percent, making them the best- and worst- performance index stocks respectively in 2013.
As caution prevailed among investors, defensive sectors such as utilities and telecommunication ended this year with positive returns. The utilities and telecommunication sector indices gained about 22 percent and 11 percent respectively in 2013.
The worst performing sector plays were technology and healthcare with their indices plunging about 27 percent and 12 percent respectively. Property sector also did poorly, with sector heavyweights such as City Development and CapitaLand suffering about 20 percent losses each on-year, mainly due to the series of cooling measures imposed by the government, and the credit tightening arisen from the U.S. tapering.
There were 27 initial public offerings throughout 2013, up from 13 in the previous year, with Mapletree Greater China Commercial Trust, Asian Pay Television Trust and OUE Hospitality Trust been the three largest initial public offering listed on the Singapore Exchange for the year.
Looking ahead, most research houses see few catalysts for Singapore bourse to move higher in 2014.
Credit Suisse Research said while the Singapore equity market offers a unique, low-volatility exposure to potential growth improvement, "the Singapore government is likely to maintain its tightening approach to property and labor markets. Consumption in the region remains under a cloud, and with an upward bias to ( interest) rates, there are few broad sector-wise themes evident for 2014."
CIMB Research said until interest rates actually normalize, interest-rate-sensitive sectors such as property in Singapore will not do well. The road to outperformance for the property and real estate investment trust sectors will open up only after interest rates rise.
But OCBC Investment Research was more upbeat about the local bourse. It expected the market outlook is slowly and gradually improving. The recent third quarter corporate results in Singapore also point to a cautiously optimistic guidance from companies and high single-digit earnings growth is likely for 2014. Among sectors, the research house was particularly optimistic upon the oil and gas sector, which is entering 2014 to 2017 with robust order books.
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