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INSIDE INSIGHTS

CapitaLand tops buybacks; directors continue acquisitions

FOR the five sessions ending March 22, the Straits Times Index (STI) declined 0.8 per cent compared to an average 1.4 per cent decline for the benchmarks of Japan, Hong Kong, Australia and the United States. In terms of SGD total returns, the STI has continued to be the best 2018 performer (through to March 22) of the benchmarks, gaining 3 per cent compared to their average decline of 1.5 per cent.

Share buyback value for the five sessions spanning March 16 to 22 continued the preceding week's momentum with another 17 stocks conducting buybacks. The buyback consideration totalled S$42.9 million, following on from S$65.3 million for the five preceding sessions.

CapitaLand bought back S$23.2 million in share value, taking the number of shares bought back since Feb 20 to 30.8 million. CapitaLand is authorised to buy back as many as 84.9 million shares on the current mandate which ends on April 23.

Over the five sessions, 46 primary-listed stocks lodged 140 changes in director interests or substantial shareholders. There were 23 director acquisitions with no disposals filed, while substantial shareholders filed 16 acquisitions and 18 disposals. AMP Capital Finance Limited acquired 26,734,158 units of AIMS AMP Capital Industrial Reit from Parangool Overseas Limited. AMP Limited's deemed interest in the Reit stands at 9.34 per cent.

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On March 20, SIMCO acquired 400,000 shares of HRnetGroup at S$0.76 per share. With a consideration of S$304,000, this took SIMCO's total interest in HRnetGroup to 74.384 per cent. HRnetGroup's founding chairman, Peter Sim and executive directors JS Sim and Adeline Sim have deemed interests in SIMCO. HRnetGroup reported in late February that its FY17 revenue increased by 7.4 per cent mainly due to flexible staffing business in Singapore registering strong growth throughout the year.

Ongoing director acquisitions

Yanlord Perennial Investment (Singapore) Pte Ltd (YPIL) continued to acquire shares of United Engineers (UEL). Two filed transactions saw YPIL acquire 50,000 shares of UEL, for a consideration of S$130,000. This took the deemed UEL interest of its executive chairman Zhong Sheng Jian to 33.69 per cent.

Back on March 15-16, UOB-Kay Hian Holdings (UOBKH) chairman and managing director Wee Ee Chao acquired 72,800 shares at S$1.4248 per share, taking his total stake in the stock to 26.55 per cent. Mr Wee has gradually increased his stake from 25.64 per cent in mid-March 2017, when UOBKH was trading at S$1.35 per share.

Tung Lok Restaurants (2000) non-independent and non-executive director Sam Goi increased his total stake in the stock to 19.549 per cent with the acquisition of 173,000 shares. Mr Goi is the executive chairman of the Tee Yih Jia Group - a global food and beverage group with operations in Singapore, Malaysia, USA, Europe and China. Mr Goi is also the executive chairman of regional developer GSH Corporation.

Between March 15 and 20, Vicplas International (Vicplas) non-executive director Robert Gaines-Cooper acquired 700,000 shares of the stock taking his direct stake from 2.47 per cent to 2.61 per cent. This brings his total interest in Vicplas to 58.28 per cent. Mr Gaines-Cooper is the chairman of the board of directors of Venner Capital SA which maintains a 55.67 per cent stake in Vicplas.

Lum Chang Holdings managing director David Lum Kok Sen continued to build his stake in the construction and property development play, taking his total stake in the stock to 20.747 per cent.

Keong Hong Holdings

On March 16, Keong Hong Holdings lead independent director Steven Lim Jun Xiong acquired S$500,000 in principal amount of 5.75 per cent Notes due 2021. With a consideration of S$507,500, the notes are held through BNP Paribas Nominees Singapore Pte Ltd. Mr Lim was re-elected to the Keong Hong Holdings board on Jan 24, 2017, following on from his initial appointment in November 2011. Mr Lim serves as the group's chairman of the audit committee and a member of the remuneration committee and the nominating committee.

With foundations in building and construction, Keong Hong Holdings has expanded into hotel and property development and investment. Despite a decrease in revenue, Keong Hong Holdings achieved a better gross profit of S$7.5 million in Q1FY18 (ended Dec 31) compared to S$6.5 million in Q1FY17. The improvement in gross profit was attributable to higher gross profit margin of 18.5 per cent achieved in Q1FY18 compared to 15.1 per cent in Q1FY17. The group's other income decreased by 63.4 per cent or S$2.0 million from S$3.1 million in Q1FY17 to S$1.1 million in Q1FY18. This was mainly due to the absence of the foreign exchange gain of S$1.5 million and management fee of S$0.4 million from associates which were recorded in Q1FY17.

Keong Hong Holdings chairman and CEO Ronald Leo Ting Ping is the majority shareholder of the stock, with his total stake of ordinary shares at 52.43 per cent as at December 2017.

Keong Hong has recently been awarded a contract for the erection of a part four-storey and part 10-storey building with two basements for the National Skin Centre, and reconstruction of an existing five-storey building with basement for National Healthcare Group offices.

New Silkroutes

As detailed in the share buyback table, New Silkroutes Group bought back 407,200 shares over the five sessions. Since commencing its 12- month buyback mandate on March 5 (which was approved on Oct 31 2017), the company has bought back 1.4 million shares.

On March 20, New Silkroutes group executive director and CEO Goh Jin Hian acquired 118,000 shares at S$0.30 per share. With a consideration of S$35,400, this took Dr Goh's stake in the stock to 3.471 per cent. Dr Goh's preceding transaction was on March 7 at S$0.31 per share.

Dr Goh is also an independent director of Cordlife Group and prior to joining New Silkroutes Group, he was a C-suite executive in ParkwayHealth from 1999 to 2011 and an executive director in a private oil and gas company from 2012 to 2014.

On Feb 12, New Silkroutes Group reported its first quarterly net profit in more than three years, driven by its core healthcare and oil trading businesses. The investment holding company made a net profit of US$135,000 in its Q2FY18 (ended Dec 31), reversing a loss of US$343,000 in Q2FY17. Prior to this, the group last registered a quarterly net profit in Q1FY15.

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