Chart of the Day: STI annualised returns hit 9.2% in 2018

The strongest stock returns during the period were from Venture, SATS, and Jardine Cycle & Carriage.

This chart from the Singapore Exchange (SGX) shows that the Straits Times Index (STI) recorded an annualised total returns of 9.2% for the 10 years ending 2018, a fifth higher than the regional Asia Pacific benchmark, and in-line with the FTSE ASEAN 40 Index.

“Following the financial crisis of 2008, global economic growth took a dip in 2009, recovered in 2010, and has kept above 2.5% for every year since, based on World Bank statistics,” SGX noted. “Over the 10 years big market drivers have gradually moved from Central Bank’s expansionary and extraordinary measures to stimulate economic growth, to political leaders reassessing international paradigms in order to restructure their trade-related growth.”

On a non-annualised basis, the STI’s total return was 140.5% over the period which spanned the end of 2008 to the end of 2018. SGX explained that without reinvesting dividends, the STI ‘s annualised return over the 10 years would have been 5.7%.

“Dividends have played a key role in these annualised returns, and following the 6.5% decline in total return for the STI in 2018, the 30 constituents currently average an indicative dividend yield of 3.8%,” SGX said.

The local bourse also revealed that the strongest returns by STI constituents during the period include Venture, SATS, and Jardine Cycle & Carriage which saw averaged similar annualised total returns of 18.5%.