• The S$506 million net institutional outflow from local stocks last week was driven by Financials and Industrials, and notably concentrated across two trading sessions. The US economic outlook shifted from a smooth to a hard landing concern, with FOMC cut expectations fluctuating from 25bps to 50bps, ending the week with divided opinions.
   
• ASEAN's most defensive performing sectors last week included Healthcare, Telecommunications, Consumer Non-Cyclicals, Energy, and Utilities. These sectors also booked net institutional inflow over the corresponding four trading sessions in Singapore. Telecommunications and Energy Sectors have seen net institutional inflow not only over the past week, but also throughout the month and year to date. 
   
• Singapore’s Utilities Sector recorded S$7.1 million of net institutional inflow for the week, seeing August reverse close to 20% of the net institutional outflow from the first seven months of the year, with Sembcorp Industries accounting for the majority of the sector flow. On 6 Aug, Sembcorp Industries reported S$532 million of net profit before exceptional items for 1HFY24, with its gas and related services portfolio providing high earnings visibility. 
   

Last week the STI declined 3.5%, with dividend distributions marginally reducing the decline in total return to 3.4%. Combined with the preceding week’s 0.9% decline in total return, the August month-to-date has more than reversed the 3.7% total return posted by the STI in July. 

The decline was on the back of global cross-asset repositioning that coincided with the Bank of Japan rate hike, in addition to concerns on US growth, and recent rotation from US technology stocks. The outlook for the US economy's smooth landing has been comparatively fluid in August, initially shifting from confidence of a smooth landing, to concerns of a hard landing. This saw the majority expectations for the 18 Sep FOMC move from a 25bps cut to a 50 bps cut. However, by the end of last week, opinions were divided on the size of the pending cut. 

At the same time, local earnings reports, and subsequent corporate and sector outlooks have also impacted local flow, particularly in the Banks which is the key industry of the local Financial Sector. 

Last week’s S$506 million in net institutional outflow over four sessions was mostly concentrated to two sectors and two Sessions. On the sector front, the two mega-cap sectors of Financials and Industrials respectively booked S$476 million and S$66 million of net institutional outflow. The first two sessions of the week also accounted for 80% of last week’s net institutional outflow.

Amid the notch up in global volatility last week, ASEAN’s most defensive performing sectors included Healthcare, Telecommunications, Consumer Non-Cyclicals, Energy and Utilities. The five sectors also booked net institutional inflow over the shortened trading week in Singapore. Real Estate (excluding REITs) and Consumer Sectors also booked marginal net institutional inflow last week. 

Proportionate to sector market capitalisation, the Telecommunications and Energy Sectors continued to lead the net institutional inflow to the local market last week. The four-session trading week resulted in net institutional inflow for Singapore Telecommunications, StarHub, and NetLink NBN Trust, which led combined net inflow for the sector to S$48.38 million. This represented 0.090% of the S$53.8 billion combined market capitalisation of the sector as of the August 8 close. In the Energy Sector, Dyna-Mac, Mermaid Maritime, Pacific Radiance, Rex International, and MTQ led the sector’s S$2.37 million net institutional inflow last week, representing 0.080% of the sector's S$3.0 billion market capitalisation.

As detailed in the table below, both the Telecommunication and Energy Sectors have not only seen net institutional inflow over the past week but also throughout the month and year to date. Additionally, they represent sectors respectively linked to the key structural economic trends of digitalisation and sustainable solutions. The table details the sector net institutional flow as a proportion of each sector’s market capitalisation, and sort by the highest proportionate net institutional inflow last week.   

Meanwhile, Singapore’s Utilities Sector booked S$7.1 million of net institutional inflow over the four-session week, taking the sector’s combined net institutional inflow over the first six sessions of August to S$8.7 billion. This has reversed close to 20% of the net institutional outflow that the sector booked in the first 7 months of the year. 

Sembcorp Industries has accounted for most of the sector’s net flows, coinciding with the stock comprising 85% of the sector’s market capitalisation. On 6 Aug, Sembcorp Industries reported 1HFY24 net profit before exceptional items of S$532 million, bolstered by the gas and related services portfolio which provided robust earnings visibility. Reflecting this performance, the interim dividend has been raised to 6.0 cents per share, up from the previous 5.0 cents per share. The CEO noted that the group’s 1HFY24 results demonstrated resilience, overcoming challenges like lower wholesale power prices and significant maintenance at the Singapore gas-fired power plant. He added that the strong performance from the gas and renewable energy portfolio anchors the 2024–2028 strategy, positioning the group favorably to cater to the growing demand from corporate clients, including data centers.

The respective net flow and performances for the most traded stocks this year are tabled below.

NIF refers to Net Institutional Flow, NRF refers to Net Retail Flow, TR refers to Total Return, ADT refers to Average Daily Turnover. 

^Note on the SGX Watchlist

All Data as of 8 August 2024.

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