• The Healthcare Sector led the global stock market in the 2Q21 to 18 June, as healthcare services and equipment continued to outpace biotechnology and pharmaceutical stocks. The top quartile of global Healthcare stocks by market value have generated a median 7% gain in the 2Q21 to 18 June.
   
• Singapore’s iEdge SG All Healthcare Index has closely followed the global trend, generating a 5% total return in the 2Q21 to 18 June. The 10 most traded stocks of the Index have also averaged a 6% total return in the 2Q21 to 18 June, bringing their average 12M return to 53%.
   
• Among the Index constituents, Medtecs International was recipient to the highest net institutional and net proprietary inflow (S$8.2M) proportionate to market capitalisation (S$505M) in the 2Q21 to 18 June. Through its Amazon US shop, the Group increased its 1Q21 daily sales volume by more than tenfold from 4Q20.
   
• Index constituents that generated double-digit total returns in 2Q21 to 18 June included First REIT (23%), Riverstone (15%) and Q&M Dental (14%) which are among the 10 most traded stocks of the Index, and outside the 10 most traded stocks, TZXP (14%), iX Biopharma (14%), HC Surgical (14%) and Cordlife (13%). 

Over the course of 2Q21, the return to more normalised economic conditions emerged as the key motif of global markets, earnings reports, institutional flows and industry reports. Apart from global progress in vaccine rollouts, normalisation was underlined by significant year-on-year rebounds in key economic data across the globe, in addition to ongoing sequential recoveries. During the quarter, the Straits Times Index (“STI”) consolidated on its strong 4Q20 and 1Q20 gains, generating a marginal 0.5% total return in the 2Q21 quarter to 18 June. The strongest global sector of the 2Q21 to 18 June, Healthcare does not maintain any weightage in the STI. This was a contrast to 1Q21, when the under significant STI benefitted from Banks ranking the strongest sector across the globe on resilient investment and higher treasury yields.

According to the Deloitte Insights 2021 global healthcare outlook, consumers are driving and accelerating the pace of change in health care with COVID-19 challenging consumer’s sense of well-being and accelerated their desire and determination to become more active, engaged, and empowered in managing their health.

Singapore’s iEdge SG All Healthcare Index generated a 5.3% total return in the 2Q21 to 18 June, with its 10 most traded stocks averaging a 6.2% total return over the 11 weeks.  As illustrated below, the iEdge SG All Healthcare Index has also been more aligned with the median performance of the top quartile of global healthcare stocks, this quarter, in comparison to the preceding three quarters.

Global healthcare stocks generally trade at higher valuations to the broader market. The past 12 months have seen a modest level of convergence in the price-to-book ratios of Singapore-listed healthcare stocks and the global leaders of the Healthcare Sector. Since June 2020, the top quartile of global healthcare stocks have extended their premium to book value by 6%, whilst the constituents of Singapore’s iEdge SG All Healthcare Index have seen their median premium to book value extend by 9%.

The 10 most traded stocks of the iEdge SG All Healthcare Index are tabled below and sorted by highest average daily turnover in the 2021 year to 18 June. The 10 stocks include three of the strongest constituents of the Index in 2Q21 to 18 June.

 Source: SGX, Refinitiv, Bloomberg (Data as of 18 June 2021)

Among the iEdge SG All Healthcare Index constituents, Medtecs International Corporation was recipient to the most trading activity in the 2021 year to 18 June. The stock was also recipient to the highest net institutional and net proprietary inflow (S$8.2M) proportionate to market capitalisation (S$505M) among the constituents, in the 2Q21 to 18 June.  As reported on 6 May, Medtecs International Corporation has started site selection for the construction of a personal protective equipment (“PPE”) manufacturing facility to further strengthen the Group's position as a leading PPE stockpiling provider and Asia’s first multi-national group procurement platform with one-stop shop capabilities. In addition, the Group has continued to expand its retail business, including through its Amazon US shop, which has increased its 1Q21 daily sales volume by more than 10 times from 4Q20.

Other stocks of the Singapore’s iEdge SG All Healthcare Index that generated double digit gains in the 2Q21 to 18 June beyond the 10 tabled above included Tianjin Zhong Xin Pharm Group, iX Biopharma, HC Surgical Specialists and Cordlife Group. These four stocks generated similar gains in the 2Q21 to 18 June, averaging a 13.9% total return. Note iX Biopharma and HC Surgical Specialists are both listed on Catalist. Mainboard listed Thomson Medical Group, and Catalist-listed stocks AOXIN Q & M Dental Group, Singapore Medical Group, QT Vascular and Singapore Paincare Holdings were the least performing stocks of the Index in the 2Q21 to 18 June, averaging 15.7% decline, trimming their average total return for the past 12 months to 28.0%.

The combined market capitalisation of the constituents of the iEdge SG All Healthcare Index is S$48 billion which represents 5% of the total market capitalisation of all stocks listed on Singapore Exchange at S$905 billion. The iEdge SG All Healthcare Index combined market capitalisation has grown by 37% since the end of 2019. Business activities within the healthcare sector include, but are not limited to, healthcare providers, manufacturing and distribution of medical equipment and supplies, pharmaceutical companies, biotechnology companies or healthcare asset owners.