Blue-Chip Stocks Are Flying High: Which Ones Still Deserve Your Money?

Core Viewpoint - The Straits Times Index has reached new heights, with Singapore blue-chip stocks experiencing significant gains, raising questions about the sustainability of this rally and potential corrections in the market [1][12]. Group 1: CapitaLand Integrated Commercial Trust (CICT) - CICT is one of Singapore's largest REITs, owning prime office and retail properties, and has shown resilience with a solid occupancy rate of 96.3% as of June 2025 [3][4]. - Retail rents increased by 7.7% and office rents by 4.8%, indicating strong demand for its properties [4]. - The gearing ratio stands at 37.9%, which is manageable, and the interest cover is at 3.1 times, providing room to manage borrowing costs [4]. - CICT's price-to-book ratio is just under 1.1, suggesting it is trading close to its underlying asset value, which may cushion against potential downturns [5]. Group 2: Frasers Centrepoint Trust (FCT) - FCT owns suburban malls that serve as community hubs, achieving a retail occupancy rate of 99.5% as of June 2025, indicating near-full occupancy [6][7]. - Shopper traffic increased by 1% year on year, and tenant sales rose by 3.3%, demonstrating the malls' importance to the community [7]. - FCT's cost of debt has decreased below 4%, providing financial relief, and its gearing is at 38.6%, still below the 50% cap [8]. - The upcoming asset enhancement at Hougang Mall, which is 64% pre-leased, is expected to drive future growth [8]. Group 3: SATS Ltd - SATS has evolved into a global aviation and food solutions provider following its acquisition of Worldwide Flight Services (WFS), with first-quarter revenue for fiscal 2026 rising nearly 10% year on year to S$1.5 billion [9][10]. - Operating margins improved to 8.3%, and revenue from Gateway Services increased by 11.2% year on year [10]. - The integration of WFS is ahead of schedule, and new contracts with major airlines highlight SATS's expanding global presence [10]. - The gross debt-to-equity ratio has eased to 1.5 times, and the fiscal 2025 dividend of S$0.05 reflects management's confidence in cash flow [11]. Group 4: Investment Considerations - The current market rally does not imply that all stocks are overpriced; strong businesses with solid fundamentals can still present investment opportunities [12][13]. - CICT offers exposure to prime commercial real estate with a 5% yield, FCT provides defensive suburban retail exposure, and SATS represents a transformation play with expanding operations [12]. - Investors are advised to focus on quality businesses at reasonable valuations rather than chasing market momentum [13].