As 2020 draws to a close, many will look back on this year as the most tumultuous in decades. While we hope for more certainty in 2021, we must also remain prepared and alert, as the threat of Covid-19 is still prevalent together with other business risks.
Despite the dark clouds that we have experienced, we should not lose sight of the silver lining. Coronavirus vaccinations have started, Singapore’s economy has shown some signs of recovery, stock markets continue to be buoyant, and core sectors like finance and manufacturing remain relatively resilient.
In fact, there are many successes in 2020 worth celebrating, and we are delighted that The Edge Singapore’s Billion Dollar Club (BDC) and Centurion Club awards have continued to recognise the fruits of the labour of many Singapore-listed companies.
Recognising the resilient
While many companies still face an uphill struggle in tiding over this trying period, there are some remarkable examples of resilience and innovation exemplified in this year’s awards.
For these award winners, 2020 can also be seen as a year of triumphing in the face of adversity. They have seized the chance to pull ahead, win new markets and grow revenues. More importantly, they proactively engage with their stakeholders which is especially critical during these periods of uncertainty. There is much that we can learn from the award winners.
Homegrown Venture Corporation, the winner of BDC Overall Company of the Year award, has maintained a steady performance, supported by strong demand from customers across multiple sectors. Malaysian healthcare and cleanroom glove maker Riverstone Holdings has been a beneficiary of the surge in global demand for personal protection equipment. These companies have been able to seize the opportunities ahead of them.
Paying attention to sustainability no doubt strengthens resilience, as it sharpens the company’s focus on business risks, and opportunities. CapitaLand, despite forecasting that its FY2020 financial performance will be adversely impacted, expects to deliver positive cash profits from its diversified operating income streams. Notably, the company has forged ahead with its 2030 Sustainability Master Plan even amid the challenging operating environment.
Another Centurion Club award runner-up —major cocoa ingredients producer JB Foods — has not only sustained a profitable business, but also kept its commitment towards sustainable cocoa processes and the securing of better livelihoods for cocoa farmers.
The Centurion Club winners have also proven that size is not always a requisite for success, and that small-to-mid cap companies are increasingly catching the attention of savvy investors. The winner of this year’s Centurion Club Overall Company of the Year award is semiconductor and electronics solutions provider AEM Holdings, which is ranked among the 30 most traded stocks this year.
Just as AEM Holdings continued to innovate and capitalise on emerging technologies such as AI and 5G, analysts have similarly opined that integrated technology solutions provider Frencken Group, a Centurion Club Company of the Year award runner-up, could also benefit from these new trends.
Supporting Singapore’s gems
The BDC and Centurion Club awards underscore how investors can discover the many gems listed in Singapore if they look beyond the main benchmark constituents.
On SGX’s part, we have been working hard to provide a robust and liquid platform for listed companies to grow sustainably in the long run. In October, we were delighted to welcome Nanofilm Technologies International, a deep technology unicorn. The company raised over $500 million and saw its valuation grow from $1.7 billion at the point of IPO to over $2 billion as at end-November. Last month, we also celebrated the listing of Credit Bureau Asia, a leading player in the credit and risk information solutions market in Southeast Asia, whose IPO retail tranche was 60 times subscribed.
It is heartening to see these companies successfully tap our capital markets and advance to their next stage of growth. SGX’s priority is to provide a platform for companies to continually access capital. Over the last five years, SGX-listed companies raised four times more funds through the secondary market than at IPO. We look forward to supporting more IPO aspirants from diverse industries in the coming months.
Investing across asset classes
Covid-19 has shown the important role SGX plays as a flight-to-quality marketplace — ensuring that our markets are open round the clock, so that investors can react to news and risk-manage their portfolios across equities, fixed income, foreign exchange and commodities. This reputation is built over decades with the support of our ecosystem, and we need to continually evolve to meet the rising expectations of our stakeholders.
With interest rates getting lower for longer, SGX is acutely aware that we need to provide our global market participants and investors with multi-asset solutions to help them seek incremental returns.
The rise of passive investing, supported by the growth in ETF investing platforms such as regular savings plan providers and robo advisors, has led to retail demand for ETFs reaching a new high. In the first 11 months of this year, we have seen retail turnover of equities ETFs quadruple to a record of S$570 million.
Along with this demand, we have worked with product issuers to launch more ETFs for portfolio diversification. In the last three months, we welcomed the listing of the ICBC CSOP FTSE Chinese Government Bond Index ETF, which is the world’s largest Chinese pure government bond ETF by CSOP Asset Management in partnership with ICBC Asset Management. We’ve also welcomed the NikkoAM-ICBCSG China Bond ETF. Both of these ETFs will meet the growing demand for access to China’s onshore bond markets. Most recently, we welcomed the listing of Lion-OCBC Securities Hang Seng TECH ETF which provides affordable access to Asia’s largest technology companies.
Beyond ETFs, SGX has also expanded its suite of regional and single-country derivative contracts, rolling out over 20 new pan-Asia FTSE benchmark equity derivatives products in 2020. Moving forward, we will continue to broaden our product shelf to help our clients extract more benefits from our multi-asset approach, as they seek diverse solutions that provide higher returns, yield, cost efficiencies as well as an ESG focus.
Strengthening our sustainability ecosystem
Another major focus for SGX is sustainability. We are confronting the increasingly complex challenge of reversing climate change while driving economic growth, and there is a clear need for businesses and societies to find new ways to collaborate to tackle the issue.
As Asia’s most international and trusted multi-asset exchange, SGX can play a central role in the region’s shift to a greener, more sustainable financial future. We are working even more closely with our partners to strengthen the ecosystem, as well as deliver products that have a measurable impact on the environment and our economy.
As sustainable investing gains momentum in global capital markets, asset managers and investors are increasingly using Environment, Social and Governance (ESG) ratings and combining them with traditional financial metrics when creating investment portfolios. We are happy to support The Edge Singapore again this year in their ESG assessment of companies in the BDC awards.
We believe that sustainability and economic growth are inter-dependent. In what has been an unprecedented year, the companies in the BDC and Centurion Club awards have turned the adversity brought about by the pandemic into opportunities. What is even more encouraging is that this has been done in a responsible, sustainable way, which we hope will continue to drive greater long-term value for shareholders and stakeholders.
Loh Boon Chye is CEO of the Singapore Exchange (SGX)
