Utilities index outperforms other stocks in 2013

The FTSE ST Utilities Index Has Been the Best Performing of the ST Sector Indices with a Total Return of 15.2 Per Cent So Far This Year

The index is made up of just three stocks. However, SGX lists 12 other companies which either reported a majority of their revenue from the utilities sector or are categorised as utilities stocks by the Industry Classification Benchmark.

The 10 largest utilities companies of the 15 listed on SGX averaged a price gain of 48.3 per cent year to date. Their median price gain was 27.9 per cent.

Companies in the utilities sector provide services ranging from electricity generation and gas distribution to water treatment for household and industrial customers.

So far this year, the FTSE ST Utilities Index has gained 13.6 per cent in price and delivered a total return of 15.2 per cent, making it the best performing sector index.

The FTSE ST Utilities Index, which draws from the FTSE ST All Share Index, is made up of just three stocks. However, there are 12 other companies on SGX that are either categorised as utilities stocks by the Industry Classification Benchmark or report a majority of their revenue from the utilities sector.

The following table lists the 10 largest of the 15 stocks. Their year-to-date price performances range from a decline of 10.6 per cent for Hyflux to a gain of 196.9 per cent for C&G Environmental Protection Holdings. On average, the stocks gained 48.3 per cent so far this year. The median price gain was 27.9 per cent.

The three best performing stocks were C&G Environmental Protection Holdings, Charisma Energy Services and SIIC Environment. Even though C&G Environmental Protection Holdings is categorised as a basic materials stock by ICB, it derived its entire revenue from utilities-related operations according to its FY12 annual report as reported by Bloomberg. The other two stocks are both from the utilities sector based on ICB.

C&G Environmental Protection Holdings has gained 196.9 per cent so far this year. The company both invests in and constructs and maintains waste incineration power plants. Its market capitalisation was S$277 million as of Dec 18.

Headquartered in Singapore, Charisma Energy Services has gained 103.2 per cent since the start of 2013. It had a market capitalisation of S$514 million. The company has two main divisions, namely covering offshore and onshore oil and gas related businesses and providing services to the energy and power generation sector.

SIIC Environment has gained 73.8 per cent since the start of 2013 and had a market capitalisation of S$763 million. The company provides engineering solutions for water purification and waste water treatment systems.

Although Sembcorp Industries, an STI constituent, does not belong to the utilities industry, it reported 55 per cent of its revenue from utilities-related operations in FY12. The stock has gained 0.2 per cent so far this year. In addition to the 15 utilities stocks, Sound Global, an industrial stock, is involved in the utilities business as it provides wastewater treatment. Its share price has gained 22.4 per cent since the start of the year.

Source: Business Times

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Taxonomy

• Utility Provider