- Venture, UMS & Frencken have ranked as Singapore’s most traded Technology stocks over the past four weeks, with the trio averaging 14% gains, while booking S$48 million of net fund inflows. This follows average declines of 24% in total return in 2022 on S$139 million of net fund outflows.
- Global stocks have been led by the Technology Sector and SEMI Industry over the past four weeks, after these segments led declines in 2022. The mean reversion was on the back of an uptick in the outlook for global consumer growth, as China presses ahead with business-friendly policies, with expectations the US Fed Funds Rate is near peak.
- ISDN, which reported 70% of its FY21 revenue to China, led the price performances of the most actively traded SGX-listed tech stocks over the past four weeks. ISDN flagged in April that COVID-19 measures in China were disrupting its supply chain and workforce. This coincided with its share price declining from 72.5 cents at the end of 2021, to 36.5 cents at the end of Oct, with recent re-opening momentum seeing the stock return to 57.0 cents on 27 Jan.
The Worldwide Semiconductor Trade statistics maintained back on 29 Nov that global semiconductor billings would contract by 4.1% in 2023, following 4.4% growth in 2022 and 26.2% growth in 2022. Since these estimates have been published, China has pressed ahead with pro-growth and business friendly policies, appointed its former ambassador to the United States as its new Foreign Minister, while also seeing some moderate growth tailwinds for December. This has seen the global stock market led by the Technology Sector and Semiconductor Industry over the past four weeks, after these segments led declines in 2022. The forward-looking, mean reversion has also been supported by expectations that the US Federal Reserve will hike rates by 25bps on 1 February and 22 March, with the 25bps hike on 8 March currently expected to be the peak/terminal rate before the FOMC pivots with no change to rates on 3 May.
The outlook for global inflation, however, is driven by both supply and demand factors which remain relatively fluid, and Singapore, South Korea and Taiwan’s exports have been registering YoY declines in recent months. As maintained by Deloitte’s 2023 technology industry outlook a “major challenge now for technology companies is how to weather a potential economic slowdown by trimming costs, increasing efficiency, and growing revenues”. The outlook added that “beleaguered by softening consumer spending, lower product demand, and falling market capitalisation, tech companies’ C-suites are feeling the urgency to increase margins and grow revenues” and “beyond workforce adjustments, approaches may include making business processes more efficient, relying more heavily on intelligent automation, modernizing legacy architectures, and considering strategic mergers and acquisitions.
For the first four weeks the former developments have seen 14 stocks of Singapore’s Technology Sector average daily turnover exceed S$50,000. These 14 stocks have averaged 10% gains over the past four weeks, while booking S$42 million of net fund inflows, outpacing the STI, and contrary to the broader Singapore stock market which has booked net fund outflows. This follows average declines of 27% in total return in 2022 on S$327 million of net fund outflows for the 14 stocks.
The 14 stocks are tabled below.
| Most Traded Technology Stocks in 2023 YTD | Code | Mkt Cap S$M | 2022 Total Return % | 2022 Net Fund Flow S$M | 2022 Avg Daily T/OS$M | 2023 YTD Total Return % | 2023 YTD Net Fund Flow S$M | 2023 Avg Daily T/O S$M |
| Venture | V03 | 5,378 | -3 | -70.2 | 15.8 | 8 | 25.9 | 13.2 |
| UMS | 558 | 885 | -19 | -12.6 | 7.0 | 12 | 16.0 | 7.0 |
| Frencken | E28 | 487 | -51 | -56.2 | 5.0 | 21 | 6.3 | 5.4 |
| Nanofilm | MZH | 960 | -63 | -99.1 | 4.3 | 5 | -6.3 | 5.2 |
| AEM SGD | AWX | 1,065 | -33 | -34.3 | 8.6 | 1 | -0.1 | 4.7 |
| IFAST | AIY | 1,541 | -30 | -52.7 | 3.0 | -10 | -0.7 | 2.2 |
| ISDN | I07 | 250 | -38 | -3.1 | 0.9 | 31 | 1.8 | 2.2 |
| TOTM Tech | 42F | 152 | -53 | -3.6 | 0.3 | 18 | -1.1 | 0.9 |
| Aztech Global | 8AZ | 672 | 4 | -9.0 | 1.0 | 5 | -0.6 | 0.3 |
| Creative | C76 | 120 | -41 | 0.8 | 0.0 | 20 | 0.1 | 0.3 |
| CSE Global | 544 | 228 | -27 | -6.3 | 0.2 | 9 | 0.4 | 0.2 |
| Silverlake Axis | 5CP | 940 | 34 | 14.9 | 0.6 | 4 | -0.5 | 0.2 |
| Valuetronics | BN2 | 226 | 0 | 3.9 | 0.2 | 5 | 0.5 | 0.1 |
| Grand Venture Tech | JLB | 197 | -57 | 0.6 | 0.2 | 15 | -0.2 | 0.1 |
| Average/Total | -27 | -326.9 | 47.1 | 10 | 41.5 | 41.9 |
Source: Bloomberg, Refinitiv, SGX. Data as of 27 Jan 2023.
STI constituent Venture Corporation maintains the highest market capitalisation and average daily turnover of the above tabled stocks. It will be releasing its FY22 results after the 24 February close. For its 9MFY22 (ended 30 Sep) revenue increased 28.0% YoY to S$2,818.7 million, while net profit rose 24.9% YoY to S$271.7 million with all technology domains contributing to the robust 9MFY22 performance. Venture Corporation also noted its Malaysian entities delivered the most impressive contributions to the Group’s overall performance and that beyond FY22, the science and technology market segments may continue to see volatility if geopolitical tensions, COVID-19 lockdowns, and other headwinds remain unabated. Venture Corporation generated a decline of 3% in total return in 2022, and an 8% price gain over the first four weeks of 2023. At 4.1%, Venture Corporation’s dividend yield is marginally above its 5-year average dividend yield of 4.0%.
ISDN Holdings was the strongest performing of the above tabled stocks over the past four weeks. ISDN Holdings which reported 70% of its FY21 (ended 31 Dec) revenue to China, reported 1HFY22 revenue and 3QFY22 revenue declined 12% and 10% respectively YoY with the company flagging back in April that the COVID-19 measures in China were disrupting its supply chain and workforce similarly to other multinational businesses operating in China. The share price declined from 72.5 cents at the end of 2021 to 36.5 cents at the end of October 2022, with the re-opening measures of the past 13 weeks seeing the ISDN Holdings share price since return to 57.0 cents on 27 January. At 2.5%, ISDN Holding’s dividend yield is trading above its 5-year average dividend yield of 2.2%. ISDN Holdings also announced on 3 January that its first mini hydropower plant, Lau Biang 1, has received its commercial operation date as of 31 December 2022, with investor presentation slides available here.
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Originally Posted January 30, 2023 – Technology Sector Led Global Stocks in January
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