What should you look out for when investing in equities?

For a first time investor, it is useful to consider your investment objective before deciding on what information is needed analyse the companies.

Investing for income
If you are looking to generate income through investing, you may choose to focus on the dividends which are paid out by the company. This is typically measured by the dividends paid per share, or dividend yield. As a benchmark, the STI constituents had an average yearly dividend of 3.21% from 2010 to 2012.

Current examples of dividend shares in Singapore are telecommunication shares and Real Estate Investment Trusts. As detailed in the table below the three shares of the STI with the highest dividends as of 18 June 2013 were Hutchison Port Holdings, Singapore Press Holdings and Starhub.

STI Constituent

SGX Code

Market Cap (S$m)

ICB Sector Name

12M Price change (%)

Dvd 12M Yld - Gross (%)

HUTCHISON PORT-U NS8U 8,464 Industrial Transportation 6.93 8.58
SINGAP PRESS HLG T39 6,926 Media 14.55 5.58
STARHUB LTD CC3 7,118 Mobile Telecommunications 24.7 4.93
SIA ENGINEERING S59 5,461 Industrial Transportation 24.24 4.50
SINGAP TECH ENG S63 12,383 Aerospace & Defence 34.34 4.33
SINGAP TELECOMM Z74 60,107 Mobile Telecommunications 18.55 4.29
KEPPEL CORP LTD BN4 19,263 Oil Equipment, Services & Distribution 7.19 4.25
SINGAPORE EXCH S68 7,869 Financial Services 16.83 3.72
JARDINE CYCLE & C07 15,370 General Retailers -0.78 3.62
COMFORTDELGRO C52 3,825 Travel & Leisure 22.37 3.62

Top 10 dividend yielding shares for the past 12 months
Source: Bloomberg (Data as of 19 June 2013)

Investing for capital appreciation
Alternatively, you may look at companies which have exhibited higher than average growth over the years, and focus on how the company has grown in terms of net income. Strong net income growth typically reflects that the company is doing well fundamentally and is earning more every year.

In the Singapore context, net income for STI companies grew an average of 104.3% between 2009 and 2012. As detailed in the table below the three shares of the STI with the greatest net income increase as of 18 June 2013 were Global Logistic Properties, CapitaMall Trust and Genting Singapore.

STI Constituent

SGX Code

Market Cap (S$m)

ICB Sector Name

Net Income / Profit:FY 2009 (S$m)

Net Income / Profit:FY 2012 (S$m)

2009 to 2012 change in Net Income

GLOBAL LOGISTIC PROPERTIES MC0 12,797 Real Estate Investment & Services 46.0 678.1 1373.74%
CAPITAMALL TRUST C38U 7,054 Real Estate Investment Trusts -65.2 536.3 922.79%
GENTING SINGAPORE G13 17,237 Travel & Leisure -277.6 680.2 345.05%
THAI BEVERAGE Y92 15,443 Beverages 447.5 1,145.8 156.02%
OCBC BANK O39 35,290 Banks 1,962.4 3,992.8 103.46%
DBS GROUP HLDGS D05 39,125 Banks 2,041.0 3,809.0 86.62%
JARDINE CYCLE & CARRIAGE C07 15,381 General Retailers 743.9 1,233.1 65.75%
UNITED OVERSEAS U11 32,102 Banks 1,901.7 2,803.1 47.40%
OLAM INTERNATION O32 4,123 Food Producers 252.0 370.9 47.17%
CAPITAMALLS ASIA JS8 7,337 Real Estate Investment & Services 388.1 546.0 40.69%

Top 10 companies with the greatest change in net income for the past 12 months
Source: Bloomberg (Data as of 19 June 2013)

Source: SGX My Gateway