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INSIDE INSIGHTS

Buybacks and acquisition filings continue amid market swings

FOR the 2018 year through to June 13, the Straits Times Index (STI) generated a 1.4 per cent total return, compared to the Nikkei 225, Hang Seng and S&P/ASX 200 Indices averaging a 2.1 per cent return, while the Dow Jones has gained 2.9 per cent, in SGD terms.

For the four trading sessions ended June 13, the STI generated a 2.3 per cent decline, with the three regional benchmarks averaging a one per cent decline in total return.

Share buybacks

Buyback momentum was maintained over the four sessions ended June 13 with consideration totalling S$44.7 million.

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This followed a consideration of S$52.2 million over the preceding five sessions.

CapitaLand again led tally, buying back 6.6 million shares for a consideration of S$23.2 million.

Companies that commenced buyback mandates included real estate specialist SingHaiyi Group with its mandate approved back in July 2017.

Director and substantial shareholder transactions

The four sessions spanning June 8 to June 13 saw 43 primary-listed stocks lodge 100 changes in director interests or substantial shareholders' transactions.

There were 30 company director acquisitions and no disposals filed, while substantial shareholders filed 14 acquisitions and six disposals.

On June 7, Yanlord Land Group founder chairman and CEO Zhong Sheng Jian purchased 138,600 shares of the stock for a consideration of S$239,778.

Mr Zhong, who is responsible for the overall management and strategy development of the group, increased his stake in the stock to 69.82 per cent.

On June 8, Sing Holdings managing director and CEO Lee Sze Hao continued to acquire more shares of the company, taking his total stake up to 38.89 per cent.

Sing Holdings chairman Lee Sze Leong also acquired more shares on June 12, taking his stake in the company to 36.01 per cent.

UOB-Kay Hian Holdings chairman and managing director Wee Ee Chao acquired shares each day between June 8 and June 13, taking his total stake in the company to 26.82 per cent.

UOL Equity Investments Pte Ltd's ongoing acquisitions of United Industrial Corporation (UIC) shares saw the stake of UIC shares held by its chairman Wee Cho Yaw climb to 50.0062 per cent on June 13.

Veteran banker Steven Ong Kay Eng also continued to increase his total stake in Hwa Hong Corporation.

With a total stake of 13.209 per cent as at June 12, Mr Ong has gradually grown his stake in the company from 10.804 per cent on Nov 28, 2016, and 7.38 per cent at the end of 2014.

On June 8, Intelligentsia Holding Ltd acquired 8,946,469 shares of Silverlake Axis at S$0.58 per share taking its direct stake in the company to 66.26 per cent.

Intelligentsia Holding Ltd is wholly-owned by Silverlake Axis founder & group executive chairman Goh Peng Ooi.

Between June 8 and June 11 Clearbridge Health non-executive non-independent chairman Johnson Chen acquired 260,000 shares of the stock for a consideration of S$101,175.

This took Mr Chen's stake in the company from 15.65 per cent to 15.71 per cent.

Substantial shareholder Johnny Chen Chung Ni also increased his stake in Clearbridge Health between June 7 and June 11 from 6.27 per cent to 6.35 per cent.

Miyoshi

On June 11, Miyoshi CEO Andrew Sin Kwong Wah acquired one million shares of the company for a consideration of S$60,186.

This took the total stake of Mr Sin in Miyoshi to 26.2 per cent.

Mr Sin along with non-executive and non-independent director Masayoshi Taira have served as directors of Miyoshi since 1991.

Miyoshi is a manufacturer of a wide range of precision stamping, prototyping, metal finishing and automation for its customers with high quality solutions.

In May 2018, Miyoshi announced the completion of a placement of 115,000,000 new ordinary shares. The issuance raised net proceeds of S$6,820,000 with 90 per cent of the net proceeds reserved for additional investment in the group's electric vehicle business.

Miyoshi noted that this may include the provision of loans to or additional equity investment in Core Power (Fujian) New Energy Automobile Co, Ltd.

Back in April, Miyoshi reported that its H1FY18 (ended Feb 28) profit after income tax increased by S$0.6 million to S$1.1 million from S$0.6 million in H1FY17.

NetLink NBN Trust

On June 8, NetLink NBN Management Pte Ltd executive director and CEO Tong Yew Heng acquired 100,000 units of NetLink NBN Trust for a consideration of S$75,000. This took Mr Tong's direct stake in the trust to 0.008 per cent.

NetLink NBN Management Pte Ltd is the Trustee-Manager of NetLink NBN Trust which listed in July 2017.

Mr Tong noted in mid-May that NetLink NBN Trust's better-than-forecast earnings for the financial period June 19, 2017 to March 31, 2018 reflected the resilience of its business model.

Mr Tong added that the growth in the number of connections for residential, non-residential and segment fibre for the financial period was higher than previous forecasts.

This meant that the Distribution per Unit (DPU) of 3.24 Singapore cents for the period from July 19, 2017 to March 31, 2018 was 5 per cent higher than forecast at the time of listing.

Fragrance Group

On June 11, Fragrance Group executive chairman & CEO James Koh Wee Meng added to his GBP term note holdings in the company.

Mr Koh acquired another GBP 100,000 in aggregate principal amount of 3.25 per cent per annum notes due in 2021.

This followed a similar acquisition on June 1. This has taken Mr Koh's total holdings of these notes to GBP 42,450,000 in aggregate principal - of which GBP 30,450,000 are direct holdings.

Fragrance Group executive director Lim Wan Looi, the spouse of Koh Wee Meng, maintains a direct interest of GBP 12,000,000 in aggregate principal in these notes. These term notes have been issued under a multi-currency debt issuance programme listed on SGX.

The GBP term notes carry a fixed coupon of 3.25 per cent per annum and mature on Aug 23, 2021.

Fragrance Group also lists SGD term notes carrying a fixed coupon of 4.75 per cent per annum maturing on Nov 23, 2021.

In addition, the company issued S$125 million in SGD term notes in April with a fixed coupon of 6.125 per cent per annum that mature on April 26, 2021. Mr Koh and Ms Lim also maintain interests in both these SGD term notes.

Fragrance Group's S$1 billion multicurrency debt issuance programme was established in October 2013.

Fragrance Group focuses on real estate, investment and hospitality, and has built up a presence in Asia, Australia and Europe. In its FY17 Annual Report the company noted that proceeds from recent note issuance went towards acquisitions of various properties in the UK in addition to Australian development projects.

Mr Koh and Ms Lim also maintain a total stake of 85.66 per cent of the issued shares of Fragrance Group.

On May 15, the company reported a net profit of S$8.5 million for its Q1FY18 (ended March 31) which was up 57.7 per cent year on year.

The increase in profits came on the back of a 50.6 per cent improvement in revenue to S$65.7 million for Q1FY18. Mr Koh founded the Fragrance Group of Companies in the early 1990s.

  • The writer is the market strategist at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.