Singapore Funds Flow - UOB Kay Hian 2021-07-12: Institutional Investors Were Net Buyers Of Financial Sector In 1H21

YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)

Singapore Funds Flow - Institutional Investors Were Net Buyers Of Financial Sector In 1H21

1H21 funds flow showed a stark difference in the views on the financial sector: while retail investors were net sellers in 1H21, institutional investors were net buyers. Apart from the banks (DBS (SGX:D05), OCBC (SGX:O39) and UOB (SGX:U11)), SGX (SGX:S68), SingTel (SGX:Z74), Yangzijiang Shipbuilding (SGX:BS6) and Ascendas REIT (SGX:A17U) were very well traded.
In June however, financials fell out of favour with institutional investors while retail investors were sizeable buyers of the sector.

Looking at 1H21 institutional fund flows, financials took up 4 of the top 5 stocks that were bought, with only Yangzijiang Shipbuilding (SGX:BS6) breaking up the favouritism for financials.
On the other hand, retail investors were net sellers of the 3 banks, with Yangzijiang Shipbuilding (SGX:BS6) and SPH (SGX:T39) rounding up the 5 stocks that saw net selling.

In 1H21, institutional investors saw an average return of 24.4% for its top 10 most bought stocks, while retail investors saw a loss of 3.5% on average across its group of top 10 most bought stocks.
Similarly for the top 10 stocks that were most sold by institutional investors, the group saw an average loss of 1.2% while retail investors witnessed a gain of 22.6% in the stocks that it sold off.
See the data table and charts on the list of stocks with largest buy / sell by institutional and retail investors 1H21 and respective share price performance in PDF report attached below.

In our view, retail investor selling in 1H21 could have been motivated by profit-taking on stocks that outperformed in the past 52 weeks. If we look at the top 10 stocks sold by retail investors over a 52-week period to end-Jun 21, these 10 stocks had an average share price return of 46%; thus profit-taking would be understandable.
Similarly, we note that retail buying during 1H21 heavily favoured value stocks such as SingTel (SGX:Z74), Ascendas REIT (SGX:A17U) and Thai Beverage (SGX:Y92) which have underperformed over the past 52 weeks.

In a stark change of affairs vs previous months, financials fell out of favour with institutional investors in June.
See also
The top 5 stocks with net buying were
It would appear that institutional investors were net sellers of the Singapore market in June with SingTel (SGX:Z74) and OCBC (SGX:O39) witnessing significant selling.

OCBC (SGX:O39), DBS (SGX:D05) and UOB (SGX:U11) seeing strong buying together with SingTel (SGX:Z74) and City Developments (SGX:C09). Tech stocks were sold off by retail investors in June – these include AEM (SGX:AWX), UMS (SGX:558) and NanoFilm Technologies (SGX:MZH), all of which have done well year-to-date.
It would appear that retail investors were generally more bullish in June and thus net buyers of the Singapore market.

As mentioned previously, the key divergence in views in June was related to the financial sector, with institutional investors selling and retail investors buying.
- OCBC (SGX:O39) saw institutional selling S$127m worth of stock vs retail investors’ S$156m in net purchases, while
- DBS (SGX:D05) saw S$109m in buying from retail vs institutional selling S$25m.
Other notable divergences in stock calls were:
- SGX (SGX:S68) with institutional buying S$32m of stock and retail selling of S$49m,
- SPH (SGX:T39) with institutional buying S$21m of stock and retail selling S$20m, and
- SingTel (SGX:Z74) with S$264m in net sales from institutions vs retail buying an exact S$246m worth.
See also

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2021-07-12

SGX Stock Analyst Report BUY MAINTAIN BUY 1.900 SAME 1.900