asianone business
4 January 2010

THE curtain may have been falling on a tumultuous year yesterday but the bulls could see nothing but a red rag.

Investors were out in force to give the price of blue chips a final dressing-up, and 2009 - and the first decade of the millennium - a rousing send-off.

In doing so, they sent the benchmark Straits Times Index (STI) roaring ahead by 17.86 points to 2,897.62.

This meant the benchmark closed a remarkable 65 per cent higher for the year - a feat almost any analyst would have regarded as an unlikely and laughable prospect when trading kicked off on a dismal note a year ago.

Still, a casual glance at the bigger picture suggests there is less to crow about.

In the past 10 years, the STI has gained a modest 10.6 per cent - despite the big run-up since March. At the crisis' epicentre, the Dow Jones Industrial Index was down 8 per cent for the decade.

By contrast, the STI surged 128 per cent in the 1990s. The local bourse gained in bulk as a host of corporate giants such as SingTel made a beeline to go public on the Singapore Exchange (SGX).

Despite these figures, there is still much for the local bourse to celebrate in the past decade.

Of the 30 component stocks of the slimmed-down STI launched in January 2008, 22 had been around in the market for the past 10 years or so.

The varying fortunes they had enjoyed reflect the importance attached by investors to backing the right horse - or right counter - as the complexion of the local bourse morphed with the winds of change blowing across the financial landscape.

The biggest untold story of the decade is how those STI counters, which came on board during the decade, stole the hearts of investors.

Plantation giant Wilmar International, which listed in 2006 as the result of a reverse takeover, became the second most valuable firm on the local bourse with a market value of $41 billion.

And bourse operator SGX has leapt 6.5 times in value since it was listed in November 2000, to become one of the most valuable exchange operators in the world.

Foreign blue chips now vie with local heavyweights for investors' attention and it is hardly surprising that the top five STI performers are all controlled by foreigners and operate huge businesses outside Singapore.

At the top of the list was Hong Kong-based commodities supply chain manager Noble Group, whose share price surged a staggering 53 times in 10 years.

It turned its owner Richard Elman into a multibillionaire and made huge fortunes for anyone with the foresight to hang onto the stock.

In second place was Cosco Corp whose price jumped 11.9 times as it transformed itself from a bulk carrier operator to a major shipyard play, following the injection of assets by its China parent.

Not surprisingly, another group of strong performers were counters linked to the Hong Kong-based Jardine group, whose far-flung business empire had ridden on the heady economic growth experienced by the region.

Jardine Matheson jumped 6.6 times, while sister firm Jardine Strategic leapt 7.8 times.

Jardine Cycle & Carriage staged a turnaround, gaining 5.5 times, as its bold purchase of Indonesia's Astra Motors in 2000 reaped handsome dividends.

This was despite starting the decade under a cloud after losing its Mercedes wholesale franchise in Singapore.

For those who have stuck to local blue chips in their investment portfolio, this strategy has proved a mixed blessing.

Among banks, OCBC Bank was the best performer, gaining 65 per cent over the past 10 years, followed by United Overseas Bank which rose 44 per cent.

DBS Group Holdings, however, ended the decade with a loss of 34 per cent, partly because of a sharp spike in price in 1999 as it became linked with every regional lender that had been put up for sale after the Asian financial crisis.

The escalation in offshore oil exploration activity also gave a fillip to shipyards which had been shunned as an apparent sunset industry when the decade kicked off.

Keppel Corp successfully took listed units such as Keppel Fels and Keppel Singmarine back into its fold, and saw its price soaring 4.1 times.

Rival SembCorp Marine jumped an eye-popping 6.7 times, as it raked in orders worth billions in oil rigs from far-flung countries such as Brazil.

Among property counters, Hongkong Land rose 2.3 times while local heavyweight CapitaLand - the result of a merger between DBS Land and Pidemco in 2000 - rose 84 per cent and Fraser & Neave surged 2.47 times.

Heavyweights such as Singapore Airlines and SingTel ended almost flat for the decade, with investors mostly deriving benefits from the fat dividends paid out over the years.