OREANDA-NEWS. The Materials Sector is made up of companies that are involved in turning the wares of the earth – which are referred to as raw materials – into industrial inputs. The Materials Sector now accounts for 7% of the market capitalisation or combined value of all the primary-listed stocks across the world. This is based on Global Industry Classification Standard (GICS®) which is also used to classify sectors on SGX StockFacts. Within the world’s Materials Sector,  the Chemicals industry maintains the largest capitalisation.

Singapore’s 10 biggest stocks of the Materials Sector have averaged a 10.9% total return in the 2016 year through to the 13 June close. Of the 10 stocks, there have been eight gainers and two decliners. Total returns varied from a 62% gain for CNMC Goldmine Holdings to a -15.8% decline for Samko Timber.

The MSCI AC Asia Ex Japan Materials Index has generated a 0.8% total return in SGD terms over the same period. The correlation of the MSCI AC Asia Ex Japan Materials Index to the S&P 500 index has gradually been declining since reaching a high in August 2015 at 0.52. The correlation is now at 0.24, with a correlation of 1.00 implying full correlation in the daily price swings of the two indices. 

Similarly, over the past six months, 10 biggest stocks of the Materials Sector have on average generated half the swings of the Straits Times Index (STI). This is based on six month historical beta for the eight most actively traded stocks of the 10, which on average came to 0.47.

Historical beta measures the average percentage returns of a stock relative to a 1.0% change in the benchmark. The individual historical beta coefficients for the last six months varied from 1.03 for Midas Holdings to 0.15 for Kingboard Copper Foil Holdings. Note that beta is backward looking only and can change over time. To see the respective historical beta of the 10 stocks for the past five years, click on the stock names below.