Diversified Returns of the 12 Sector Indices

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 In the year-to-date, the 12 FTSE ST Sector Indices that cover the 161 stocks of the FTSE ST All Share Index have generated returns that ranged from 44.8% for Real Estate Holding & Development to -19.6% for Consumer Goods Index. The FTSE All Share Index has gained 15.9% over the period. Sorted by best performing FTSE ST Sector index, the largest stocks of each sector index are currently as follows:

  1. The Real Estate Holding & Development Index has gained +44.8% in the year-to-date. The biggest three stocks of the Index are Hongkong Land Holdings (H78), CapitaLand (C31) and Global Logistic Properties (MC0) which are all categorised to the Real Estate Investment & Services Sector by the Industry Classification Benchmark (ICB). In the year-to-date the three stocks have gained +47.4%, +54.8% and +52.1% respectively.
  2. The Real Estate Investment Trust (REIT) Index has gained +31.1% in the year-to-date. The biggest three REITs of the Index are CapitaMall Trust (C38U), Ascendas REIT (A17U) and CapitaCommercial Trust (C61U). In the year-to-date the three trusts have gained +21.2%, +25.7% and +46.0% respectively. This does not take into account dividend distributions.
  3. The Financials Index has gained +28.6% in the year-to-date. The biggest three stocks of the Index are DBS Group Holdings (D05),Oversea-Chinese Banking Corp (O39), United Overseas Bank Ltd (U11) which are all categorised as Banks by the ICB.  In the year-to-date, the three locally incorporated banks have gained +22.2%, +16.2% and +19.8% respectively. The FTSE ST Financial Index also includes the stocks of the Real Estate Holding & Development Index and the REIT Index.
  4. The Industrials Index has gained +22.5% in the year-to-date. The biggest three stocks of the Index are Jardine Matheson Holdings (J36), Jardine Strategic Holdings (J37), and Fraser & Neave (F99) which are all categorised as General Industrials by the ICB.  In the year-to-date, the three stocks have gained +26.7%, +27.6% and +48.2% respectively.
  5. The Oil & Gas Index has gained +16.1% in the year-to-date. The biggest three stocks of the Index are Keppel Corp (BN4), SembCorp Marine (S51) and SembCorp Industries (U96) which are all categorised as Oil Equipment, Services & Distribution by the ICB.  In the year-to-date, the three stocks have gained +9.1%, +14.1% and +23.2% respectively.
  6. The Utilities Index has gained +8.5% in the year-to-date. The biggest three stocks of the Index are Hyflux (600), Gallant Venture (5IG) and United Envirotech (U19) which are all categorised as Gas, Water & Multiutilities by the ICB.  In the year-to-date, the three stocks gained +9.1%, +12.5% and +15.4% respectively.
  7. The Telecommunications Index has gained +4.3% in the year-to-date. The three stocks of the Index are Singapore Telecommunications (Z74), StarHub (CC3), M1 (B2F) which are all categorised as Mobile Telecommunications by the ICB.  In the year-to-date, the three stocks have gained +2.6%, +24.7% and +4.8% respectively.
  8. The Technology Index has gained +1.7% in the year-to-date. The biggest three stocks of the Index are LionGold Corp (A78), CSE Global (544) and DMX Technologies Group (5CH). In the year-to-date, the three stocks generated mixed performances of +19.5%, +13.3% and -10.6% respectively. Liongold is categorised as Technology Hardware & Equipment by the ICB while CSE Global and DMX Technologies Group are categorically sectored to Software & Computer Services.
  9. The Consumer Services Index has marginally declined -0.8% in the year-to-date. The biggest three stocks of the Index are Jardine Cycle & Carriage (C07), Genting Singapore PLC (G13) and Singapore Airlines (C6L). In the year-to-date, the three stocks generated mixed performances of -2.0%, -18.2% and +3.2% respectively. Jardine Cycle & Carriage is categorised as a General Retailer by the ICB while Genting Singapore PLC and Singapore Airlines Ltd are categorised to the Travel & Leisure sector.
  10. The Basic Materials Index has declined -4.6% in the year-to-date. The biggest three stocks of the Index are Midas Holdings (5EN), XinRen Aluminum Holdings (MN5), Li Heng Chemical Fibre Technology (E9A).  In the year-to-date, the three stocks have gained +13.6%, +12.5% and +14.6% respectively. Midas Holdings and XinRen Aluminum Holdings are categorised as Industrial Metals & Mining by the ICB while Li Heng Chemical Fibre Technology is categorically sectored to Chemicals.
  11. The Health Care Index has declined -10.1% in the year-to-date. The biggest three stocks of the Index are IHH Healthcare Bhd (Q0F), Biosensors International Group (B20) and Raffles Medical Group (R01) which are all categorised as Health Care Equipment & Services by the ICB.  In the year-to-date, the three stocks generated mixed performances of +15.0%, -23.1% and +14.6% respectively.
  12. The Consumer Goods Index has declined -19.6% in the year-to-date. The biggest three stocks of the Index Wilmar International (F34), Golden Agri-Resources (E5H) and Olam International Ltd (O32) which are all categorised as Food Producers by the ICB.  In the year-to-date, the three stocks have declined -36.6%, -14.0% and -12.0% respectively.

Grouping stocks by sectors is a practice that may assist investors spread portfolio risk and potential return across different industries.  For up-to-date information on the width and depth of the sectors that are represented by stocks listed on Singapore Exchange, investors can visit the Markets Tab at My Gateway here.

Source: SGX My Gateway

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What is the Fiscal Cliff?

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By , About.com Guide

“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.

Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.”

In dealing with the fiscal cliff, U.S. lawmakers have a choice among three options, none of which are particularly attractive:

  • They can let the current policy scheduled for the beginning of 2013 – which features a number of tax increases and spending cuts that are expected to weigh heavily on growth and possibly drive the economy back into a recession – go into effect. The plus side: the deficit, as a percentage of GDP, would be cut in half.
  • They can cancel some or all of the scheduled tax increases and spending cuts, which would add to the deficit and increase the odds that the United States could face a crisis similar to that which is occurring in Europe. The flip side of this, of course, is that the United States’ debt will continue to grow.
  • They could take a middle course, opting for an approach that would address the budget issues to a limited extent, but that would have a more modest impact on growth.

 

Can a Compromise be Reached?

The oncoming fiscal cliff is a concern for investors since the highly partisan nature of the current political environment could make a compromise difficult to reach. This problem isn’t new, after all: lawmakers have had three years to address this issue, but Congress – mired in political gridlock – has largely put off the search for a solution rather than seeking to solve the problem directly. Republicans want to cut spending and avoid raising taxes, while Democrats are looking for a combination of spending cuts and tax increases. Although both parties want to avoid the fiscal cliff, compromise is seen as being difficult to achieve – particularly in an election year. The most likely result, in any event, is that the problem will linger at least until after the election, and there’s a strong possibility that Congress won’t act until the eleventh hour. Another potential obstacle is that the next Congress won’t be sworn in until January 3.

The most likely result is another set of stop-gap measures that would delay a more permanent policy change until 2013 or later. The election will almost certainly have an impact on the direction of future policy, particularly if one party earns a decisive victory. Nevertheless, the non-partisan Congressional Budget Office (CBO) estimates that if Congress takes the middle ground – extending the Bush-era tax cuts but cancelling the automatic spending cuts – the result, in the short term, would be modest growth but no major economic hit.

 

Possible Effects of the Fiscal Cliff

If the current laws slated for 2013 go into effect, the impact on the economy could be dramatic. While the combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 billion, the CBO estimates that the policies set to go into effect would cut gross domestic product (GDP) by four percentage points in 2013, sending the economy into a recession (i.e., negative growth). At the same time, it predicts unemployment would rise by almost a full percentage point, with a loss of about two million jobs. A Wall St. Journal article from May 16, 2012 estimates the following impact in dollar terms: “In all, according to an analysis by J.P. Morgan economist Michael Feroli, $280 billion would be pulled out of the economy by the sunsetting of the Bush tax cuts; $125 million from the expiration of the Obama payroll-tax holiday; $40 million from the expiration of emergency unemployment benefits; and $98 billion from Budget Control Act spending cuts. In all, the tax increases and spending cuts make up about 3.5% of GDP, with the Bush tax cuts making up about half of that, according to the J.P. Morgan report.” Amid an already-fragile recovery and elevated unemployment, the economy is not in a position to avoid this type of shock.

The cost of indecision is likely to have an effect on the economy before 2013 even begins. The CBO anticipates that a lack of resolution will cause households and businesses to begin changing their spending in anticipation of the changes, possible reducing GDP by a full half-percent in the second half of 2012.

Having said this, it’s important to keep in mind that while the term “cliff” indicates an immediate disaster at the beginning of 2013, the impact of the changes – while destructive over a full year – will be gradual at first. What’s more, Congress can act to change laws retroactively after the deadline. As a result, the fiscal cliff won’t necessarily be an impediment to growth even if Congress doesn’t address the issue until after 2013 has already begun.

 

 

From Investopedia

Investopedia Says

Definition of ‘Fiscal Cliff’

A combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective Dec. 31, 2012. The idea behind the fiscal cliff was that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.

 

 

Investopedia explains ‘Fiscal Cliff’

Because 2012 was a presidential election year, Congress delayed dealing with the fiscal cliff issue, leading to much speculation about how the scheduled tax and spending changes would play out and the potentially negative consequences of letting both occur without modifications. While the term “cliff” implied that the changes would have immediate, destructive and final consequences, some policy and economic analysts said that the consequences would be gradual and that negative outcomes like tax increases could be undone.

Read more: http://www.investopedia.com/terms/f/fiscalcliff.asp#ixzz2BvWEO2qn

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McDonald’s Corporation (MCD): Break Support!

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McDonald’s Corporation (MCD) broke support recently and hit the breakout target of the Double Tops chart pattern. If MCD is not able to rebound from this support from the next few days, MCD will continue to slide in the down trend. Currently MCD’s chart is technically bearish whereby the stock is trading below 20D, 50D and 200D SMA. 200D SMA is starting to slope down.

Key Statistics for MCD

Current P/E Ratio (ttm) 15.9586
Estimated P/E(12/2012) 15.9526
Relative P/E vs.SPX 1.1465
Earnings Per Share (USD) (ttm) 5.3100
Est. EPS (USD) (12/2012) 5.3120
Est. PEG Ratio 1.6574
Market Cap (M USD) 85,076.98
Shares Outstanding (M) 1,003.98
30 Day Average Volume 6,771,255
Price/Book (mrq) 6.1278
Price/Sale (ttm) 3.1343
Dividend Indicated Gross Yield 3.63%
Cash Dividend (USD) 0.7700
Last Dividend 11/29/2012
5 Year Dividend Growth 22.87%
Next Earnings Announcement 01/24/2013
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