OREANDA-NEWS. There are 12 Singapore stocks within the 50 constituents of the FTSE Value-Stocks ASEAN Index. Stocks that have joined the Index over the past 12 months include Singapore Telecommunications, DBS Group Holdings, Ascendas REIT, Mapletree Industrial Trust and Venture Corp.

Constituents of the FTSE Value-Stocks ASEAN Index must pass a proprietary value screening process which use P/E ratios, dividend yields, return on equity, operating profit margin, net gearing and a unique contrarian factor. The stated objective of the FTSE Value-Stocks ASEAN Index is to identify quality and overlooked value stocks listed in ASEAN exchanges. As there are a maximum of 50 stocks in the index, the largest capitalised stocks that meet the criteria will be chosen.

The current 12 Singapore stocks that are included within the Index are tabled below.

The 12 Singapore stocks of the FTSE Value-Stocks ASEAN Index average an indicative dividend yield of 5.2% which is the highest average for the five ASEAN countries that have representation in the Index. These average comparative indicative dividend yields are illustrated below.

The 12 Singapore stocks within the FTSE Value-Stocks ASEAN Index have averaged a 1.0% decline in total return in the 2016 year thus far, which is in line with the decline of 0.7% of the FTSE Value-Stocks ASEAN Index. For the 12 Singapore stocks, the average 1.0% decline takes the average five year total returns of the 12 stocks to 26.4% with nine gainers and three decliners over the period.

The strongest of the 12 value stocks over the five year period was Mapletree Industrial Trust with a 98.3% total return, while Keppel Corp was the least strongest of the 12 stocks with a 36.8% decline in total return over the five year period.   The respective five year returns of the 12 stocks are illustrated below.

In the 2016 year to date, the three strongest performers of the 12 Singapore stocks within the FTSE Value-Stocks ASEAN Index thus far were CDL Hospitality Trusts, Mapletree Industrial Trust and Venture Corp.

Valuations

As noted in the table below, all stocks are either trading at a discount or at the same price-to-book (P/B) ratio as their respective five year P/B averages.  Since the first quarter of 2011, the decline of the Straits Times Index (STI) P/B ratio has matched the decline of the P/B of the MSCI AC Asia Ex Japan Index on a proportional basis. As many as eight of the 12 Singapore stocks within the FTSE Value-Stocks ASEAN Index are also constituents within the STI.

On a Price to Earnings (P/E) basis, while the average ratio of 12.3 is above the five year average of 12.1, half of the 12 stocks are trading a P/E ratio below their five year average. To see the full profile of each of the 12 stocks, please click on the respective stock names below.

Source: SGX StockFacts, Bloomberg (data as of 14 June 2016)

The FTSE Value-Stocks ASEAN Index’s 50 stocks are made up of stocks listed on the Indonesia Stock Exchange, Bursa Malaysia, the Philippine Stock Exchange, Singapore Exchange and the Stock Exchange of Thailand. The ground rules for the index can be obtained here. The Index is free float weighted and constituent stocks are capped at 5% weightings to avoid over-concentration in any one stock.  As maintained by the Index Rules, each security must be a current constituent of the FTSE Global All Cap Index and the securities from an ASEAN Country will be eligible for Index inclusion on the size, liquidity and free float investability screens.