The CPF is a wonderful tool to help you save for your retirement.
The Ordinary Account (OA) offers you the flexibility to use the funds either for real estate or for education.
You can also invest the funds within the OA by opening a CPF Investment Account (CPFIA).
Currently, the OA interest rate is 3.5% for the first S$20,000 and 2.5% for amounts over S$20,000.
The great thing is that the CPFIA allows you to invest your CPF funds in reliable stocks that can give you a better return than the OA.
Here are three reliable Singapore stocks to consider for your CPFIA buy watchlist.
United Overseas Bank (SGX:U11)
The United Overseas Bank or UOB is the smallest of the three local banks.
The lender reported strong earnings for the first half of 2023 (H1 2023) as rising interest rates boosted its net interest income (NII).
The bank’s core net profit rose 53% year-on-year to a record S$3.1 billion in the first half of 2023, driven by a 37% year-on-year increase in NII to S$4.8 billion.
In parallel with the strong results, UOB declared and paid an interim dividend of S$0.85, almost 42% higher than the S$0.60 paid a year ago.
The blue-chip lender also reported record income from trading and investment, up 15% year-on-year.
Its digital app TMRW has digitally acquired more than seven million retail customers in four markets: Thailand, Indonesia, Singapore and Malaysia.
UOB also confirmed that its Citigroup The acquisition is expected to generate annual revenue growth of approximately S$1 billion for China Telecom Corp. (NYSE: C) by 2023.
For 2023, the bank forecasts loan growth in the mid-single-digit range with a stable net interest margin.
UOB also expects fees to increase by a high single-digit percentage compared to last year.
Frasers Centrepoint Trust (SGX:J69U)
Frasers Centrepoint Trust or FCT is a pure retail REIT for the suburbs of Singapore.
Its portfolio includes 10 shopping malls and one office building with total assets under management of S$6.9 billion (as of March 31, 2023).
FCT’s shopping centres are well connected to public transport hubs, which ensure a constant flow of customers into the shopping centres.
In addition, just over 52% of FCT’s retail portfolio’s gross rental income comes from the essential trade and services sector, making the company resilient to economic downturns.
In the REIT’s business update for the third quarter of fiscal year 2023 (Q3FY2023), retail occupancy increased to 98.7% due to firm leasing demand.
Customer frequency also increased by 16% year-on-year during the quarter, while tenant revenue improved by 5% year-on-year.
FCT had total debt of 40.2% as of June 30, 2023, but this was expected to fall to 37.1% after the REIT announced the divestment of Changi City Point.
For the first half of fiscal 2023, FCT paid a distribution per unit of S$0.0613, slightly lower than the S$0.06136 paid out a year ago.
Singapore Exchange Limited (SGX:S68)
Singapore Exchange Limited or SGX is Singapore’s sole stock exchange operator.
The exchange operator recently reported excellent results for the fiscal year 2023 (FY2023) ending June 30, 2023.
Revenue increased 8.7% year-on-year to S$1.2 billion, while net profit increased 26.5% year-on-year to S$570.9 million.
Excluding one-off expenses and items, net profit would still have increased 10.3% year-on-year to S$503.2 million.
The Group also increased its quarterly dividend from S$0.08 to S$0.085, equivalent to an annual dividend of S$0.34.
As Singapore’s sole stock exchange operator, the group has a natural monopoly position.
The blue-chip exchange believes that Asia offers significant growth potential that will help SGX realise its ambitions to become a multi-asset hub.
Both SGX’s commodities and foreign exchange divisions are reporting healthy revenues, which are expected to continue in fiscal 2024.
The exchange will focus on expanding its product range to meet more market needs and provide investors and institutional funds with more tools to manage their portfolios.
The company plans to partner with other exchanges to launch additional products, such as the recently launched Singapore Depository Receipts, to achieve greater liquidity and higher trading volumes.
SGX aims to achieve high single-digit revenue growth over the medium term and also aims to increase the dividend per share by a mid-single-digit average annual growth rate.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited.
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