• The STI added 3.7% in July, bringing the seven month total return to 9.6%. While the STI Banks averaged 2.8% gains for the month, both the iEdge S-REIT Index and iEdge SG Manufacturing Index generated 5.5% total returns. The FTSE APAC Index gained 1.2% for the month, in SGD terms. 
   
• Singapore stocks booked S$198 million of net institutional inflow on the month, reversing more than 15% of the net outflow in 1H24. In July, the trio of STI Banks saw S$38 million of net inflow, the iEdge S-REIT Index saw S$19 million of net outflow, and the iEdge SG Manufacturing Index saw S$76 million of net inflow. 
   
• The STI ended July with its P/B ratio at 0.3 standard deviations (s.d.) above the five-year historical mean. By comparison, the iEdge SG Manufacturing Index P/B ratio ended at 0.4 s.d. above its mean and the iEdge S-REIT Index ended the month at 1.2 s.d. below its mean.
   

The STI added 3.7% in July, ending the month at 3,455.94, with the FTSE Asia Pacific Index gaining 1.2% in SGD terms. This brings the STI total return for the first seven months to 9.6%, with the two STI-tracking ETFs averaging 9.2% total returns. These two ETFs also  saw the net inflows of 1H24 reversed with net outflows in July, coinciding with the STI posting the highest monthly percentage price gain since December 2023.  

The trio of STI Banks averaged 2.8% gains in July, and saw their combined STI weight marginally decrease from 51.5% to 50.9%. At the same time the iEdge S-REIT Index and iEdge SG Manufacturing Index both generated 5.5% total returns over the month. Together the trio of STI Banks booked S$38 million of the net institutional inflow in July, taking their combined net institutional inflow for the past seven months to S$632 million. 

In July, the iEdge SG Manufacturing Index recorded net institutional inflow of S$76 million, with contributions led by SATS, ST Engineering, and Venture Corporation. Notably, SATS was also among the top performers in the STI for the month, alongside Seatrium and Thai Beverage. SATS's expansion through the integration of Worldwide Flight Services has extended its global footprint to over 215 locations across more than 27 countries. Separately, a July IMF working paper underscored the importance of horizontal integration in lessening the adverse effects of uncertainty on global trade. This highlights a broader context and key economic theme going into 2025 where strategic horizontal expansions can potentially bolster operational resilience.

Meanwhile the constituents of the iEdge S-REIT Index booked S$19 million of net institutional outflow in July. This was a significantly slower outflow pace than seen in 1H24, with the constituents booking S$1.1 billion of net institutional outflow. Suntec REIT ranked among the stocks with the highest net institutional inflow in July (+S$24.5 million), reversing the S$22.2 million net institutional outflow in 1H24.

The 20 stocks that booked the highest net institutional inflow in July are tabled below. 

Note NIF refers to Net Institutional Inflow, NRF refers to Net Retail Flow, TR refers to Total Return. All Data as of 31 July 2024 Source: SGX, Refinitiv. Note ARA US Hospitality Trust NIF coincided with Acrophyte Pte Ltd acquisition.

The five stocks that saw the highest net institutional outflow in July averaged 0.3% declines over the month and included Singapore Airlines, DBS Group Holdings, Jardine Cycle & Carriage, Sembcorp Industries and Genting Singapore. 

The first half of July was comparatively more bullish for the local market with S$418 million of net institutional inflow and the STI forming its six year high at 3,509.20 on 15 July. This was primarily on the increased likelihood of a smooth recovery in the US economy. However, the familiar theme of geopolitical uncertainty took hold in the second half of the month, which saw the STI give back one quarter of the 5.0% gain it had built in the first half of July. The latter half of the month also saw S$220 million of overall net institutional outflow in the local market. Global monetary policy was firmly in focus in July. Over the course of July, expectations for an 18 September FOMC Federal Funds Rate cut increased from 65% to 100%, with the expectation for at least 100bps in cuts by the conclusion of March 2025 meeting to near 90%, versus 33% at the end of June. In China, the PBOC cut its new key policy rate, the 7-day reverse repo, to 1.75%, after outlining five monetary policy reforms to enhance economic recovery and development back in June. Meanwhile, the FTSE China A50 Index saw a slight decline but yielded a positive total return due to dividends, with shifts towards China Government Bonds amid the policy changes. The BOJ also raised its benchmark interest rate to 0.25% on July 31 and signaled a tapering of its bond-buying program, while maintaining a supportive stance for the economy with negative real interest rates. The decision bolstered the Japanese Yen (JPY) throughout July, so that the 0.6% TOPIX decline in JPY terms, translated to a 6.3% USD return for the Index. This also saw the Lion-Nomura Japan Active ETF gain 5% for the USD counter, and 4% for the SGD counter. 

The STI ended July with its P/B ratio at 1.14x, which was 0.3 standard deviations (s.d.) above the five-year historical mean of 1.11x. By comparison when the STI made a high of 3,641.65 in early May 2018, the P/B was at 1.37x which at the time was also 0.3 s.d. above the 5-year mean of 1.32x. The FTSE Asia Pacific Ex-Japan Index ended July with a P/B of 1.70x that was similarly 0.2 s.d. above its 5-year historical mean. By comparison, the iEdge SG Manufacturing Index P/B ended at 0.4 s.d. above its 5-year mean and the iEdge S-REIT Index ended the month at 1.2 s.d. below its 5-year mean. 

After the 31 July close, the IMF released the Annual Article IV Country Report on Singapore, highlighting that Singapore's economic growth is on a recovery path, bolstered by external demand, with reduced growth risks and gradual disinflation despite potential inflationary pressures from labor and commodity markets. 

Enjoying this read?

• Subscribe now to our SGX My Gateway newsletter for a compilation of latest market news, sector performances, new product release updates, and research reports on SGX-listed companies.
• Stay up-to-date with our SGX Invest Telegram channel.