In an increasingly interconnected global landscape, allocating your investments across various countries or geographic regions can be advantageous. This can help reduce portfolio volatility and maximise returns.
However, many investors still often exhibit home bias, favouring companies from their own country over those from other countries or regions due to their familiarity and ease of trading.
The good news is that many solutions exist today that can help investors build a globally diversified portfolio with the same familiarity and ease, one of them being Singapore Depository Receipts (SDRs).
What are Singapore Depository Receipts (SDRs)?
SDRs are tools that give investors a share in a foreign security listed on an overseas exchange. Through SDRs, Singapore investors can access overseas securities via SGX. This provides a more convenient and cost-effective way of trading foreign securities. The first ones available are Thai SDRs under the Thailand-Singapore DR linkage.
Expansion of Thai SDR Offerings on SGX
Alongside the initial three Thai SDRs launched last year – Airports of Thailand, CP All, and PTT Exploration & Production – investors seeking geographical diversification can now trade an additional five new Thai SDRs.
With these five new additions, the eight Thai SDRs available on SGX collectively provide exposure to all major sectors of the Thai market, representing over 40% of the market capitalisation of Thailand’s SET50 benchmark index.
Here’s an overview of the five new Thai SDRs to look out for:
- Advanced Info Services (SGX: TADD)
Advanced Info Service (AIS) is Thailand’s largest telecommunications and mobile phone operation, with a market capitalisation of S$22.6 billion. It holds a 48% market share in terms of revenue, and caters to more than 40 million customers nationwide.
During FY2023, AIS recorded a total revenue of THB 188,873 million, reflecting a 1.8% year-on-year growth, while its net profits surged by 12% to THB 28,656 million. The company expects 5G technology and market value to continue growing in 2024 as consumers start opting for 5G plans with higher data offering and speed efficiency.
AIS’s outstanding performance is strengthened by strategic partnerships, notably with Singtel, which holds a 23.3% stake. Additionally, AIS has consistently paid dividends over the past decade.
- Delta Electronics (SGX: TDED)
Delta Electronics, a subsidiary of Taiwanese electronic components maker Delta Group, stands as a leading electronics manufacturer in Thailand. With a market capitalisation of S$34.5 billion, it ranks among the largest companies listed on the SET50 index.
The manufacturer’s strong regional presence in the US, Germany, and China, combined with its innovative product offerings, has driven a 23.6% increase in revenue to THB 147,675 million. Additionally, net profits rose by 20.1% to THB 18,423 million during the 2023 financial year.
By providing business solutions and products extensively utilised in automotive, medical, and telecom, the company is well-positioned to benefit from the structural trends of EV adoption and the growth of data centres in the coming years.
- Gulf Energy Development (SGX: TGED)
Valued at S$19.1 billion, Gulf Energy is Thailand’s largest private power producer. It boasts a diverse portfolio of gas-fired and renewable power projects, serving both public and private clients in the country’s major industrial zones.
Gulf Energy achieved impressive financial results in FY2023, with revenue rising by 18.7% to THB 116,950 million and net profit growing by 30.1% to THB 14,857 million year-on-year. The company anticipates its revenue to increase by 25 to 30% this year, contributed by a few projects scheduled to roll out which includes gas-fired, solar rooftop and domestic solar farms.
With the Thai government’s goal of achieving carbon neutrality by 2050, Gulf Energy is expected to benefit from the shift to renewable energy.
- Kasikornbank (SGX: TKKD)
Known as Thailand’s best domestic bank, Kasikornbank (KBank) has a market capitalisation of S$10.9 billion. In FY2023, the financial powerhouse saw a 13% increase in total revenue, reaching THB 306,529 million, while its net profit grew by 18.6% to THB 42,405 million year on year.
KBank ranks among the top three most actively traded SDRs among recently introduced blue-chip companies, mainly due to its increasing dividend distributions over the past three years. With its current yield exceeding 5%, it has garnered significant attention from investors, earning a coveted spot on many watchlists.
Aside from its plans to achieve a double digit return on equity by 2025 through a 3+1 strategy, the country’s second largest bank also intends to expand its business in China, Indonesia and Vietnam.
- Siam Cement Group (SGX: TSCD)
Founded in 1913 by King Rama VI who owns a 30% stake, Siam Cement Group (SCG) commenced operation as the first cement manufacturer in Thailand, making it one of most reputable industrial conglomerates in the country.
The largest industrial conglomerate comprises three core divisions: cement-building materials, chemicals, and packaging. With a market capitalisation of approximately S$12.9 billion and a 21% increase in net profits to THB 25,915 million in FY2023, it stands as a significant player in the market.
Investors can anticipate the company’s continued business expansion this year, driven by its pursuit of government infrastructure projects and integrated energy transition solutions, aiming to supply solar energy to residential areas, factories, and industrial estates.
How to Invest in SDRs on Syfe Brokerage
Keen to start investing in Thai SDRs? Simply sign up on the Syfe Brokerage platform, explore the available SDRs, and start building a well-diversified portfolio.
Enjoy fee rebates* when you invest in SDR trades from now until Aug 31, 2024.
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