• The iEdge SG Advanced Manufacturing Index is comprised of 110 stocks that drew 20 cents in every dollar that went to work into the Singapore stock market in 1Q23. While the Index generated a marginal 0.5% decline in total return in 1Q23, 49 of the 110 constituents booked positive returns, with nine stocks unchanged and 52 stocks posted declines.
   
• For 1Q23, the Index constituents booked S$52 million of net institutional inflow, led by inflow to Sembcorp Marine, Singapore Tech Engineering, Thai Beverage, Tianjin Pharmaceutical, Venture, Nanofilm Technologies International, Halcyon Agri Corp, Frencken, Top Glove Corp Bhd, and ISDN. These 10 stocks averaged a 9.0% total return in 1Q23.
   
• The Index constituents that booked the highest net institutional inflow proportionate to quarter-end market cap in 1Q23 included Acesian Partners, ISDN and Frencken, while averaging a 28% total return. Jiutian Chemical, Yangzijiang Shipbuilding and Medtecs International booked the highest net institutional outflow proportionate to quarter-end market cap and averaged a 19% decline in total return in 1Q23.
   

The iEdge SG Advanced Manufacturing Index is comprised of 110 stocks that drew 20 cents in every dollar that went to work into the Singapore stock market in 1Q23. Yangzijiang Shipbuilding (Holdings) saw the most trading turnover in 1Q23, averaging S$42 million a day, with 20 stocks averaging more than S$1 million in traded turnover a day.

The iEdge SG Advanced Manufacturing Index booked S$52 million of Net Institutional Inflow in 1Q23  

While the Index generated a marginal 0.5% decline in total return in 1Q23, 49 of the 110 constituents booked positive returns, with 9 stocks unchanged and 52 stocks posted declines. For 1Q23, the stocks of the iEdge SG Advanced Manufacturing Index booked S$52 million of net institutional inflow, led by inflow to Sembcorp Marine, Singapore Technologies Engineering, Thai Beverage PCL, Tianjin Pharmaceutical Da Re Tang Group Corp, Venture Corporation, Nanofilm Technologies International, Halcyon Agri Corp, Frencken Group, Top Glove Corp Bhd, and ISDN Holdings.

For the quarter, stocks of the Index that booked the highest net institutional inflow proportionate to quarter-end market capitalisation included Acesian Partners, ISDN Holdings and Frencken Group which averaged a 28% total return in 1Q23. Meanwhile, Jiutian Chemical Group, Yangzijiang Shipbuilding (Holdings) and Medtecs International Corp booked the highest net institutional outflow proportionate to quarter-end market capitalisation and averaged a 19% decline in total return in 1Q23.

As illustrated below, the 52-week low of the Index is 1,219 on 25 Oct, with the Index since gaining 18% to 1,438 on 26 Jan, decline 11% to 1,279 on 14 March, and recover 6% to return to 1,362 on 31 March.

Manufacturing is a Highly International Business

The decline in the iEdge SG Advanced Manufacturing Index into October 2022, preceded Singapore’s NODX reports registering YoY contractions since the Oct 2022 NODX report was released on 17 November. In tandem, export data for South Korea and Taiwan have also registered YoY contractions since October on the weak global outlook, and some moderation to the optimistic outlook for both China’s economic growth, and rapprochement with US policymakers since late January.

Aside from familiar macroeconomic drivers of growth, inflation, interest rates, geopolitical tensions, and overall financial stability, manufacturing outlooks can be also shaped by global trade trends, regional integration, Industry 4.0, and inbound foreign direct investment.

Manufacturing is expected by Enterprise Singapore to play a critical role in South East Asia’s growth, with multiple initiatives at work to make it easier for goods to flow within the region, by expediting cargo clearance and cutting down paperwork. ADB’s Sanchita Das sees more integrated approaches to trade and transport facilitation will help to allay two of the more costly components of the supply chain, customs, and transport connectivity, and thus provide for greater trade and better engagement in value chains. While manufacturing transformation and trade readiness are in focus with the ASEAN Declaration on Industrial Transformation to Industry 4.0 and Regional Comprehensive Economic Partnership, further integration stands to benefit operational efficiency at a company level.

Transcending value chains, acquisitions, the adoption of lean manufacturing, product differentiation and stout inventory management are among the strategic initiatives pursued by international manufacturers in recent years.  

Wide Sector Representation Across Index Constituents

While the Index spans multiple Sectors, Industrials, Technology, Consumer Non-Cyclical and Materials and Resources and Healthcare contribute 94 of the 110 constituents. The Sector bandwidth is not unlike Singapore’s Industrial Production, which is comprised of Electronics, Chemicals, Precision Engineering, Biomedical Manufacturing, General Manufcaturing and Transport Engineering.

As detailed in the Index Methodology, revenue breakdown is a key part of the Index selection criteria obtained and based using the RBICS industry classification system as provided by iEdge research partner, FactSet. To be eligible for index inclusion, a company must belong to a RBICS Level 6 Sector as specified in the Appendix – Sector Criteria for iEdge SG Advanced Manufacturing Index. The sector criteria states that more than 40% of a company’s revenue must be generated from the relevant index theme; the threshold is lowered to 30% for existing constituents. All companies are screened for sector eligibility in the annual September index review.

NIO Inc maintained the highest Index  weightage at the end of 1Q23. It also ranked among the 15 most traded constituents of the Index in 1Q23, while also ranking among the five stocks of the Index with the narrowest bid-ask spread for the last week of the quarter. On average those five sessions saw the difference between the bid-ask spread at 29 basis points (bps), on par with Singapore Technologies Engineering at 28 bps. NIO Inc shares traded in Singapore and NYSE traded ADS are fully fungible, thus holders and shareholders can convert shares trading on SGX to ADS trading on NYSE , and vice-versa.

The 110 Index constituents, sort by Index weight as of 31 March, are tabled below.

Source: SGX, Refinitiv, Bloomberg (Data as of 31 March 2023). Note ^ on SGX Watchlist.

Fund Flows takes account of trades in the ‘Buying-in Market’ and ‘Unit Share Market’.