Buyback flows consistent and acquisition to disposal ratios higher

THE four trading sessions spanning June 23 to June 29 saw the STI add 1.3 per cent, which brought its dividend-inclusive return for the 2017 year to date to 14.9 per cent.

Ten stocks conducted share buybacks over the four sessions with a total consideration of S$11.8 million, up seven per cent from the preceding five sessions. Again, OCBC contributed most to the buybacks, with 800,000 shares purchased at an average price of S$10.76, up from last week's average purchase price of S$10.62.

Buyback activity is expected to decline in July, ahead of second quarter earnings reports and the necessary blackout periods for companies buying back their own shares.

Over the five sessions, 40 stocks lodged more than 90 changes in director interests and/or substantial shareholders.

For directors, the ratio of filed acquisitions to disposals was 15 to 1, while the ratio of acquisitions and disposals filed for substantial shareholders was almost two to one. Half the filings over the four sessions were associated with scrip dividends, employee share option schemes and share awards.

Venture Corp

On June 27, Blackrock Inc trimmed its stake in Venture Corp to marginally below the 6.00 per cent threshold, at 5.99 per cent.

The filed transaction involved the selling of 72,700 shares at an average price of S$12.136. According to filings, the stake of Blackrock Inc in Venture Corp had last moved up to 6.00 per cent (from 5.97 per cent) on March 14 in a similar sized transaction albeit buying at a lower average price of S$11.092.

Prior to this, the Blackrock Inc stake in Venture Corp had moved up to 5.00 per cent on Feb 6, with that transaction executed at an average price of S$10.244.

Venture Corp is a leading global provider of technology services, products and solutions, in addition to being Singapore's biggest information technology sector stock. The group reported diluted EPS of 17.2 cents for Q1 FY17, up from 12.9 cents in Q1 FY16.

Other institutional shareholders of the stock, which is a part of more than 100 global indices, include Aberdeen Asset Management and Sprucegrove Investment Management.

Suntec Reit

On June 23, Suntec Reit substantial unitholder Gordon Tang increased his total stake in Suntec Reit from 7.694 per cent to 8.278 per cent. This transaction saw Mr Tang acquire 44,615,200 units of Suntec Reit at an average price of S$1.862 per unit. Mr Tang and his spouse, Celine Tang, are the SingHaiyi Group non-executive director and managing director respectively.

The SingHaiyi Group focuses on property development, real estate investment and property management services, and was the most recent stock to transfer from Catalist to the Mainboard. Mr Tang's stake in Suntec Reit moved above the substantial unitholder threshold in September 2016.

For its Q1 FY17, Suntec Reit reported that its distributable income was S$61.8 million compared to S$60.0 million a year ago with its DPU at 2.425 cents compared to 2.371 cents in Q1 FY16.

Suntec Reit holds properties in Suntec City, a 60.8 per cent interest in Suntec Singapore Convention & Exhibition Centre, a one-third interest in One Raffles Quay, a one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall, and a 30.0 per cent interest in 9 Penang Road, in addition to interests in two properties in Australia.

Suntec Reit's largest unitholder is Raffles Investments, which is part of the Tecity Group of companies that includes Straits Trading Company.

GK Goh Holdings

With its roots in the securities business, GK Goh Holdings (GKGH), invests shareholder funds into operating businesses and a range of long-term and liquid investments. Its total assets are in excess of S$600 million and the stock has gained 15 per cent in the 2017 year to date, while reporting EPS growth.

Executive chairman Goh Geok Khim and executive director Goh Yew Lin have controlling interests in the holding company GKG Investment Holdings Pte Ltd (GKGI).

GKGI reported more acquisitions of GKGH last week. On June 27, GKGI purchased 31,400 shares of GKGH in addition to 5,900 shares of GKGH on June 23. Both transactions were traded at a share price of S$0.920 and the two transactions increased the GKGI stake in GKGH to 60.11 per cent.

This means GKGI has acquired 239,700 shares of GKGH at an average price of S$0.9148 through 11 transactions since resuming buying on May 24.

In 2016, GKGI also gradually increased its stake in GKGH, with 21 transactions increasing its stake from 59.85 per cent to 60.03 per cent.

In mid-May GKGH reported Q1 FY17 diluted EPS of 2.37 cents, up from 0.55 cents a year ago. This followed on from FY16 diluted EPS at 9.18 cents against 3.99 cents in FY15.

Delfi

Clients and subsidiaries of Commonwealth Bank of Australia (CBA) have been increasing their stake in the chocolate confectioner which maintains a strong regional presence.

Delfi markets and distributes its own brand of chocolate confectionery products in over 17 countries including Indonesia, Singapore, Malaysia, Hong Kong, Australia, Thailand, the Philippines and China.

On June 27, CBA increased its stake in Delfi from 5.92 per cent to 6.03 per cent. The acquisition of 657,000 Delfi shares was transacted at a price of S$2.02. CBA is the parent company for Colonial First State Group.

In another transaction, on June 22, First State Investments (UK Holdings) purchased 914,800 shares of Delfi, also at a price of S$2.02, taking its stake in Delfi from 4.91 per cent to 5.06 per cent.

For its Q1 FY17, Delfi reported diluted EPS of 0.92 US cents, compared to 1.38 US cents in Q1 FY16. This follows on from the group reporting diluted EPS of 4.28 US cents in FY16, which was a turnaround on the diluted EPS of -0.77 US cents in FY15.

Delfi CEO John Chuang noted with the Q1 FY17 results that despite slower sales in Q1 FY17, management continued to invest in brand building and routes-to-market capabilities as these are critical to the long-term growth of the business.

Mr Chuang also noted that Delfi was extending its reach in its key markets by having better channel segmentation to widen its distribution coverage.

Rowsley

Rowsley's non-executive independent chairman Ng Ser Miang, who has held this position since December 2015, has been acquiring shares in Rowsley since March 21.

Rowsley is a diversified real estate company with businesses in design and engineering, real estate development and hospitality. For its Q1 FY17, diluted EPS was -0.033 cents, compared to 0.108 cents for Q1 FY16.

On June 20, Mr Ng raised his total interest in Rowsley to 0.1261 per cent with the purchase of 500,000 shares at a price of S$0.08 each. Mr Ng and his wife have acquired a total of 5,900,000 shares in the company.

Mr Ng is also a director of various companies, including Yanlord Land Group. He is also Singapore's non-resident ambassador to Norway and was a Nominated Member of Parliament from 2002 to 2005.

In Rowsley's FY16 Annual Report Mr Ng noted that while market uncertainties would persist in 2017, there were bright spots such as: the weaker sterling means future investments in the UK will be cheaper; and in Singapore, the fall in private sector projects is being offset by increasing government stimulus in the infrastructure, institutional and industrial sectors.

Institutional flows

According to the SGX fund flow data for June 23 through June 29, OCBC and DBS saw the largest amount of institutional inflows (combined amount of S$119.6 million). Singapore Airlines was third on the list at S$7.9 million. ComfortDelGro, CapitaLand Commercial Trust and Wilmar International were subject to the largest outflows in the same period.

Non-STI stocks subject to the largest institutional inflows were Croesus Retail Trust, Mapletree Commercial Trust, and Keppel DC Reit, while the largest outflows were logged to Venture Corp, Frasers Logistics and Industrial Trust and Suntec Reit.