Quality of Singapore's corporate management lagged Vietnam and Thailand

It performed poorly in capital management and earnings/interest expense.

Within the ASEAN region, firms in Vietnam and Thailand performed better than Singapore firms in terms of corporate management, Natixis Asia Research revealed.

According to its ASEAN corporate monitor, within the realm of corporate management, Singapore scored 0.1 like Vietnam. Thailand has a score of 0.5, topping the rankings in the region. Indonesia, Malaysia, and the Philippines have scores of 0, -0.3, and -0.4, respectively.

Utilities and real estate firms in Singapore have the best corporate management scores across the ASEAN at 0.5 each.

The monitor revealed that Singapore is worse than global peers when it comes to capital management and EBITDA/Interest expense. However, it had better debt dynamics and revenue generation.

Natixis also covered corporates’ debt, revenue, and capital performance as indicators of corporate financial health. In terms of debt performance, Singapore did better in managing liabilities/common equity and interest burden but worse in terms of short-term liabilities compared to its global peers. 

For revenue performance, only its profit margin was better compared to the rest of the world. Notably, however, is that Singapore had the biggest profit margin in 2017 at almost 10%. Meanwhile, its return on capital this year was also worse than those of global counterparts.

Within the realm of the domestic macro market, Singapore’s environment is better than the rest of its global peers, thanks to improved performance of its interest rate and effective tax rate. However, it lagged in terms of inflation whilst GDP growth stayed flat.

Natixis also compared Singapore’s performance in 2016 to its showing in 2017.

In the domestic macro environment, Singapore’s performance improved in 2017 compared to 2016. This reflected in the positive changes in its GDP growth and inflation as well as its interest rate (2.2%) and effective tax rate (18%).

In terms of corporate management, Singapore showed flat performance in 2017 compared to 2016. The change was most positive in terms of EBITDA/Interest expense, followed by capital management, and revenue generation. Its debt dynamics had middling performance.

In terms of debt performance, Singapore did better in interest burden but worse in managing liabilities/common equity compared to last year. For revenue performance, it did better in increasing operating income and profit margins, but free cash flow yield was much worse than last year.

Return on capital this year was much better than last year’s.

The study covered 1,200 largest listed corporates across seven industries in the ASEAN.