If you are looking for Singapore stocks to buy in August 2019, then Multi Management Future Solutions equity research team share their top stock picks for the month of August, Add these stocks in your portfolio for big short term gains.
It is the largest bank in Singapore and also one of the biggest financial corporations in Asia. During 2019, DBS was awarded the ‘World’s Best Bank’ by Euromoney.
The company’s 1st half results reflected a highly positive picture of the company. All the profitability metrics show record increment YOY.
|Metric||S$ Billions (1st HY 2019)||% Change (YOY)|
The extraordinary 11% growth in total income is diversified across the various parts of the business like non-trade corporate loans, higher net interest margin, record fee income and recovery in trading income.
Also, net profit and operating profits grew even faster than total income. ROE increased from 12.5% to 13.7% on an annual basis.
DBS bank is undervalued based on PE valuation as compared to the overall Singapore market. The price to earnings (PE) ratio of DBS stood 11.5 times against 12.7 times of SGX.
Also, the company holds an excellent balance sheet with a proven track record DBS offer an attractive dividend yield of 4.57% with a dividend of 120 cents and a market price of 26.25 (Aug 2, 2019). The company pays only 52% of its EPS as dividends and retained remaining for further growth projects. The company is going ex-dividend on Aug 5, 2019.
Also, the company has high liquidity, Loans are broadly funded by customer deposits and it has an acceptable level of bad loans of less than 2%.
As already mentioned, DBS Group Holdings is a growing business, but one of the most important point to consider DBS is that insiders have bought large quantities of shares.
The insider recently has purchased around 34000 shares at an average rate of 26.0, a value of S$ 884000.
This makes the company a prime candidate for MVR watch list because insider trading signifies that the Top management of the company is of the view that the stock is currently undervalued.
Capitaland Retail China Trust
CapitaLand Retail China Trust (CRCT) is the first China retail real estate investment trust (REIT) of Singapore with a portfolio of eleven shopping malls. Also, these malls have a diverse mix of approximately 1,600 tenants which include leading brands like Nike, Xiaomi, UNIQLO, Nanjing Impressions, Sephora, ZARA, Starbucks and Sisyphe.
The results for the quarter ended June 30, 2019, the quarterly Revenue fell by a little 1.9% to S$ 55.2 million. However, the NPI (Net property Income) increased by 7.3% to S$ 40.4 million.
The overall distributable income for 2nd Quarter, 2019 increased by 5.0% YOY basis to S$2.54 million. However, due to low quarterly distributions, DPU decreased by 3.8% to Scents 2.54.
Shopper traffic increased by 0.3% YOY for the 2nd quarter of 2019. Also, tenant sales increased by 2.8% for the 2nd quarter of 2019 YOY. Moreover, the rental reversions increased by 7.0% during the same quarter on an annual basis. All these factors were major contributors to higher NPI (net property income).
The gearing ratio (or debt to asset ratio) of the company is low at 33.8% where the limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%. This allows the trust manager to raise debts to finance future projects.
The recent statement by CEO of REIT’s manager Mr. Tan Tze Wooi is very optimistic and progressive. He says:
“Despite global market headwinds and trade tensions, China’s economy registered steady growth at 6.2% for 2Q 2019, in line with market expectations. The continued rise in national urban disposable income per capita of 8.0% for the first half of 2019 indicates momentum in the increasing spending power of China’s middle class, a trend which CRCT malls are well-placed to benefit from.”
That means CRCT on a growth road will continue to perform well in the near future.
The market price of the stock fell from a high of 1.63 to 1.52 in a period of last about10 days where bulls seem to be returning makes the stock a good buy.
Riverstone Holdings Limited (SGX: AP4)
The Company, through its subsidiaries, is engaged in manufacturing and distributing cleanroom gloves and finger cots, and manufacturing plastic bags and trading latex products with an annual production capacity of 9 billion gloves as of 31 December 2018. It has six manufacturing facilities in Malaysia, Thailand, and China.
The main reason behind considering this stock is that the major business profile of the company is recession-proof.
It is the global market leader in the production of cleanroom and healthcare gloves, fingercots, cleanroom packaging bags and faces masks which are used by major global players in the hard disk drive (“HDD”), semiconductor and healthcare industries.
80% of its products are exported to key high-tech customers in Asia, America, and Europe.
The market for healthcare gloves is growing at 8% per annum.
2019 second-quarter results, however, shows that its net profit is down by only “2.8%” year-on-year.
The company’s share price has declined by more than 20% recently, mainly due to concerns about weakening margins. This makes the company a profitable buy.
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