News flow highlighting growth-oriented business activities of the listed companies in Singapore touched the highest level in the last 3-years during the quarter ended Sep. 30, 2017. The pickup in news flow featuring growth-oriented activities indicates improvement in the business confidence.
Heckyl studied the past 3-years’ news data for 540 listed companies in Singapore. During September 2017 quarter, news items featuring growth-oriented business activities moved up 15.65% sequentially and 17.10% on year-on-year basis (Image 1).
At the same time, the number of companies mentioned in the growth-oriented news items has also grown 16.3% on a y-o-y basis to 164 (Image 2).
Real estate/ construction, telecom services, engineering, marine infra and banks were the top 5 sectors which led the growth-oriented news flow for the quarter ended Sep. 30, 2017 (Image 3 and Image 4).
For the latest quarter, positive to negative news ratio for Singapore based companies was at the highest level in 11-quarters. This ratio indicates the level of positive/ negative sentiment for the overall news coverage.
If the ratio value is greater than 1, then it indicates that the volume of positive news has outpaced negative news count. On the other hand, if the ratio value is lower than 1, then it indicates that the volume of negative news has outpaced positive news count.
We have witnessed a strong positive correlation between positive to negative news ratio and FTSE ST All Share Index, which represents 98% of Singapore market capitalization. For the past 5-quarters, correlation between positive to negative news ratio and FTSE ST All Share Index stood at 0.91 (Image 5).
At the same time, we noticed a strong positive correlation between 90-day moving average of positive to negative news ratio and FTSE ST All Share Index. For the past 365 days, correlation between positive to negative news ratio 90-DMA and FTSE ST All Share Index was at 0.80 (Image 6).
Following word cloud shows top 30 companies which dominated growth-oriented news flow for the latest quarter (Image 7).
A significant rise in news flow highlighting growth-oriented activities reflects improvement in overall business confidence for Singapore listed companies. At the same time, an increase in a number of companies mentioned in such news items indicates broad-based improvement in growth-oriented activities.
From investors’ perspective, analytics derived from news coverage can help them to get a bird eye view of growth related activities at the broader level. At the same time, it can also help to gauge overall revenue visibility. Most importantly, such alternative data can be used in the top-down analysis of the sector for picking stocks with bright growth prospects.
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