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Director acquisitions surge; buyback momentum continues
THE Straits Times Index (STI) has continued to be the strongest of the regional majors that include the Nikkei 225, Hang Seng and S&P/ASX 200.
In the 2018 year through to May 24, the STI generated a 5.5 per cent total return, compared to these three regional indices averaging a 1.8 per cent return, while the Dow Jones has gained 1.5 per cent, in SGD terms.
For the five trading sessions ended May 24, the STI generated a marginal 0.03 per cent total return, with the three benchmarks of the region all weaker, averaging a 0.5 per cent decline in total return.
Dividend distributions made the difference to the STI's marginal lead, with Yangzijiang Shipbuilding Holdings, OCBC and CapitaLand Commercial Trust shares going ex-dividend between May 18 and 24.
The five sessions saw share buyback consideration continue its momentum, totalling S$41.1 million, up from S$27.5 million the preceding week.
CapitaLand led the tally, and commenced its new mandate, buying back 5.1 million shares for a consideration of S$18.2 million.
At its recent AGM, CapitaLand received shareholder approval to buy back 2 per cent of its issued shares up until the next AGM, with the standard provision for a possible revoke or variation by shareholders at an earlier general meeting.
Director and substantial shareholder transactions
The five sessions saw 63 primary-listed stocks lodge 212 changes in director interests or substantial shareholders' transactions.
There were 39 director acquisitions and four disposals filed, while substantial shareholders filed 12 acquisitions and six disposals.
Between May 18 and 22, Yanlord Perennial Investment (Singapore) Pte Ltd (YPIL) acquired 667,600 shares of United Engineers (UEL) for a consideration of S$1.86 million. This took the deemed UEL interest of Yanlord Land Group chairman and CEO, Zhong Sheng Jian, who also serves as UEL's executive chairman, to 33.96 per cent. Mr Zhong has gradually increased his stake in UEL from 33.59 per cent at the end of 2017.
On May 18, Best World International (BWI) founding co-chairwoman and president Doreen Tan acquired 100,000 shares of the company at an average price of S$1.255 per share. With a consideration of S$125,500 this took her total stake in BWI to 40.784 per cent. This followed BWI founding co-chairwoman Dora Hoan acquiring 600,000 shares of BWI between May 16 and 17, which took her total stake to 40.854 per cent.
On May 24, Sino Grandness Food Industry Group chairman and CEO Huang Yupeng acquired 500,000 shares for a consideration of S$108,450, increasing his direct interest in the company to 35.90 per cent.
On May 18, TEE International (TEE) chief executive & managing director Phua Chian Kin acquired one million shares at the company at a price of S$0.199 per share. This took Mr Phua's total stake in TEE to 60.28 per cent. Mr Phua had previously acquired one million shares on March 1 via a married deal, at S$0.20 per share.
On May 17, TEE together with its subsidiaries and associated companies announced that TEE Infrastructure Private Limited, its wholly owned subsidiary, had formed a joint venture with Dymon Asia Capital (Singapore) Pte Ltd's private equity arm.
Together, the two entities entered into a sale and purchase agreement with Sembcorp Environment to acquire its medical waste business division for a proposed aggregate sum of S$20 million.
Mr Phua has been the group chief executive & managing director of the regional engineering, infrastructure and real estate group since 2000. On April 12 TEE reported that overall group profit after tax for its Q3FY18 (ended Feb 28) increased by S$0.7 million from S$0.3 million to S$1.0 million.
Almost five years ago, TEE's wholly-owned real estate subsidiary, TEE Land was listed on SGX. On April 12, TEE Land reported its Q3FY18 (ended Dec 28) profit after tax amounted to S$1.3 million, compared to a profit after tax of S$0.2 million in Q3FY17. For its 9MFY18, the group registered a loss after tax of S$5.4 million compared to a profit after tax of S$1.7 million in 9MFY17.
Between May 21 and 23, TEE Land non-executive chairman and independent director Lee Bee Wah, increased her stake in the stock from 0.35 per cent to 0.40 per cent. This involved the acquisition of 200,000 shares for a consideration of S$34,877.
Lian Beng Group
On May 18, Lian Beng Group chairman and managing director, Ong Pang Aik directly acquired 2.2 million shares of the group at S$0.63 per share. The consideration of the married deal totalled S$1.386 million. This took Mr Ong's total stake in the stock from 34.58 per cent to 35.02 per cent.
This was the first filed acquisition of Lian Beng shares for Mr Ong in 2018 and follows two acquisitions in 2017 which totalled 4.7 million shares at an average price of S$0.5944 per share.
These two acquisitions back in 2017 were made indirectly through substantial shareholder Ong Sek Chong & Sons Pte Ltd.
Mr Ong joined the group in 1978 and was instrumental in growing the business from its early days as a subcontractor into an A1-graded building construction enterprise registered with BCA today.
The group is one of Singapore's major home-grown main contractors with integrated civil engineering and construction support service capabilities, and has been listed on SGX Mainboard since 1999.
In mid-April, Lian Beng Group reported its 9MFY18 revenue had decreased 6.2 per cent year on year (yoy) to S$146.5 million mainly due to a decrease in revenue generated from the construction segment offset by the better revenue in the investment holding and ready-mixed concrete segments.
Mr Ong is deemed to be interested in a 74.07 per cent stake in SLB Development, a spin-off of Lian Beng Group, which listed on Catalist on April 20.
Between May 21 and 22, UMS Holdings (UMS) chairman and CEO Andy Luong acquired 600,000 shares of the precision engineering group at an average price of S$0.951 per share. The consideration of the two transactions totalled S$570,501 and took Mr Luong's total stake in UMS up to 20.19 per cent.
Mr Luong's preceding acquisition was in August 2017, with those 300,000 shares acquired at S$0.905 per share. As president and founder of the UMS Group, Mr Luong has more than 20 years of experience in the manufacturing of front-end semiconductor components.
On May 11, UMS reported its Q1FY18 net attributable profit gained 2 per cent yoy to S$11.4 million. This followed on from a 230 per cent yoy surge in net attributable profit back in Q1FY17, with FY17 the most profitable year in UMS' history.
With the results, management noted that the group is progressing well with its due diligence for the proposed acquisition of a 70 per cent stake in a non-ferrous metal alloys specialist, Starke Singapore Pte Ltd which will be funded by internal resources.
This proposed deal is in line with UMS' strategy to strengthen its upstream integration to reap cost savings and enhance business and operational synergies within the group through a more efficient supply chain to serve global customers.
- The writer is the market strategist at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.