4 Singapore Stocks Perfect For Your First Investment
When it comes to picking your first stock, looking for companies closer to home may be a good place to start.
After all, we are more likely to be familiar with these companies if we use their products and services on a regular basis.
Singapore is also a good place to hunt for dividend-paying companies.
Unlike foreign stocks, we do not have to pay taxes on dividends received on Singapore-listed shares.
And as Singapore heads towards a new normal and the economy forges ahead with reopening, many businesses are investing in new pillars of growth.
Here are four local blue-chip stocks that are worthy candidates for your first investment.
DBS Group (SGX: D05)
Where better to start than the “World’s Best Bank”?
The local lender has received this accolade from global financial publications for four consecutive years, and it is not hard to see why.
DBS’ business not only remained resilient throughout the COVID-19 pandemic, and the bank has even emerged stronger.
The bank reported record earnings in its fiscal 2021 first-half results, with net profit growing by 54% year on year to hit S$3.7 billion.
In the same period, fee income climbed by 19% year on year to a record S$2.1 billion, while assets under management (AUM) grew 13% year on year to S$285 billion.
DBS has also leveraged the pandemic to pursue several growth opportunities.
The lender acquired India’s Lakshmi Vilas Bank as well as a 13% stake in Shenzhen Rural Commercial Bank, making DBS the largest shareholder in the Chinese bank.
Lastly, DBS has kick-started several new business ventures, including blockchain-payments platform Partior, carbon credit exchange Climate Impact X, and DBS Digital Exchange, a cryptocurrency trading platform.
CapitaLand Investment (SGX: 9CI)
CapitaLand Investment, or CLI, is a global real estate investment manager (REIM) with assets under management (AUM) of S$119 billion and funds under management (FUM) of S$83 billion.
The company’s well-diversified property portfolio contains asset classes such as integrated developments, retail, office, lodging, industrial, logistics, business parks, and data centres.
CLI was spun out of the restructuring of CapitaLand Group in September 2021.
The objective of the restructuring was to unlock shareholder value by separating CLI, an asset-light business, from the group’s development arm.
The REIM’s business model is focused on fee-income related businesses such as fund and lodging management, as well as its stakes in REITs, unlisted funds and investment properties.
CLI has plans to scale up these revenue sources.
The group aims to achieve FUM of S$100 billion by 2024 through organic growth and strategic acquisitions, as well as expand the number of units on its lodging platform from 123,000 to 160,000 by 2023.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is the sole stock exchange operator in Singapore.
The group’s platform allows investors to buy and sell a variety of securities such as equities, bonds, derivatives, and commodities.
For new investors, SGX makes for a safe first investment due to its natural monopoly and stable dividends.
The bourse operator has maintained or increased its total annual dividend for the last 12 years, and recently raised its fiscal year 2021 dividend to S$0.32, an increase of 5% from its fiscal year 2020.
The company is also undertaking several initiatives to grow its business.
SGX recently introduced new rules to allow Special Purpose Acquisition Companies, or SPACs, to list on the SGX Mainboard.
The move, a first in Asia, is aimed at revitalizing the bourse by attracting more diverse companies to list their shares in Singapore.
The company is also pursuing growth opportunities for its platform in the areas of foreign exchange, digital fixed income, and sustainable finance.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is a local supermarket chain that was founded in 1985 and currently operates 63 outlets in Singapore.
The company is the supermarket of choice for many Singaporeans, and stocks over 1,400 products across a wide assortment of categories on its shelves.
Last year, Sheng Siong enjoyed a bumper year due to elevated demand for groceries.
The supermarket operator’s net profit spiked 83.7% year on year to S$139.1 million in 2020.
The group was very generous in sharing its good fortune with its employees by rewarding them with up to 16 months of bonus.
This gesture helped Sheng Siong win praises from the Singapore public.
Expanding its network of stores locally is also in the works, with the company constantly looking for suitable locations to reach more families in the heartlands.
Sheng Siong also operates two stores in Kunming, China, with another two slated to open in the second half of this year.
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Disclosure: Herman Ng does not own shares in any of the companies mentioned.
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