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Director activity subsides as earnings take centre stage
FOR the five trading sessions from July 26 to Aug 1, the Straits Times Index (STI) declined 2.7 per cent with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index averaging 1.7 per cent declines, weighed by the Hang Seng Index decline of 3.5 per cent.
This has brought the STI's 2019 total return through to Aug 1 to 10 per cent.
There were nine primary-listed stocks conducting share buybacks over the five sessions ended Aug 1, with a total consideration of S$11.2 million.
Boustead Singapore, Stamford Land Corporation and Singapore Shipping Corporation all commenced new share buyback mandates.
The latter two stocks had respectively bought back 5.133 per cent and 2.94 per cent of their issued shares, excluding treasury shares as of their date of the previous buyback resolutions.
For the five sessions, Keppel Reit led the buyback tally by consideration, and was second ranked by buyback consideration for the month of July.
As of Aug 1, Keppel Reit had bought back 0.5358 per cent of its issued units as of the date of the buyback resolution approved back on April 23.
The previous mandate saw Keppel Reit buy back 1.004 per cent of the issued units.
For the month of July, a total of 23 primary-listed stocks on SGX repurchased more than 30 million shares with a total consideration of S$41.6 million.
This was down from S$55.1 million in June 2019 and also less than the average total monthly consideration of S$54 million over the preceding six months.
Earnings season typically sees less buybacks filed and as best practice, companies refrain from buying back their shares during the two weeks immediately before their quarterly financial statements and one month immediately before the full-year financial statements.
Director and substantial shareholder transactions
The five sessions spanning July 26 to Aug 1 saw approximately 100 changes in director interests or substantial shareholdings filed for just over 40 primary-listed stocks.
With the earnings focus, there were only four company director acquisitions and one disposal filed, with substantial shareholders filing 10 acquisitions and six disposals.
On July 16, Catalist-listed Alliance Mineral Assets formally changed the company's name to Alita Resources (Alita) following the shareholders' approval at the extraordinary general meeting on July 11.
The dual listed company commenced lithium (spodumene) concentrate production at its principal project, the Bald Hill Lithium and Tantalum Mine in March 2018.
On July 25, Weier Antriebe und Energietechnik GmbH (Weier) acquired 50 million shares of Alita for a consideration of A$10 million at an issue price of AS$0.20 per share.
This took Weier's direct interest in Alita from 5.88 per cent to 9.06 per cent.
Weier is a wholly owned subsidiary of Jiangxi Special Electric Motor Co Ltd (Jiangte).
Alita also announced on July 25 that further to a memorandum of understanding entered into on April 26, Alita and Jiangte have signed a term sheet to progress the formal terms of the 50:50 joint venture to produce and sell battery-grade lithium hydroxide and other lithium products.
This joint venture is conditional upon formal documentation being agreed and executed, regulatory and other consents (including from the company's lenders), output from the Bald Hill Mine being sufficient for the joint venture, and the converter being able to produce joint venture products to agreed specifications.
Between July 17 and 25, Shinvest Holding managing director Teo Teck Leong increased his direct and deemed interests in the company.
Mr Teo acquired 58,100 shares directly and 152,900 through deemed interests.
The total 211,000 shares were acquired with a total consideration of S$318,502 or average price of S$1.51.
This took Mr Teo's total stake in the listed company from 9.747 per cent to 10.452 per cent.
Mr Teo is the chief executive officer of the company's wholly-owned subsidiary, Sin Hong, and has been a director of GD Tech since March 2011.
He also sits on the board of all of Sin Hong's subsidiaries and one of the subsidiaries of GD Tech, and oversees the businesses of Sin Hong and its subsidiaries and GD Tech and its subsidiaries.
Mr Teo has gradually increased his total interest in Shinvest Holding from 8.283 per cent on Jan 26, 2017.
On July 30, SHS Holdings executive director and group chief executive officer Henry Ng Han Kok acquired 280,000 shares of the listed company for a consideration of S$49,560, at an average price of S$0.177 per share.
This increased his deemed interest in SHS Holdings from 17.58 per cent to 17.62 per cent.
Mr Ng's previously filed acquisition was on June 28 at an average price of S$0.175 per share, and prior to that, in December 2016, at an average price of S$0.194 per share.
SHS Holdings has engineering and construction, solar energy and corrosion prevention businesses.
Mr Ng is responsible for making strategic proposals to the board and implementing the group's strategies, policies and board's decisions.
He also leads the development of the group's growth strategy including identifying and assessing risks and opportunity of growth of existing business and new businesses and reviewing the performance of its existing businesses.
The group is expected to report its Q2 FY19 results by Aug 16.
On July 31, Catalist-listed QT Vascular substantial shareholder MDIE Pte Ltd (MDIE) sold 11,723,000 shares of the listed company at S$0.004 per share.
The transaction had a consideration value of S$46,892 and reduced the MDIE interest in QT Vascular from 9.34 per cent to 8.81 per cent.
Tanhum Feld is deemed interested in the company's shares held by MDIE by virtue of his 100 per cent shareholding interest in MDIE.
On June 14, MDIE's direct interest in QT Vascular increased from 4.97 per cent to 9.34 per cent following the allotment and issuance of 104,663,153 shares pursuant to the loan extension deed dated May 15, 2019.
Hwa Hong Corporation
Between July 25 and 29, Hwa Hong Corporation (Hwa Hong) substantial shareholder David Ong Eng Hui increased his direct stake in Hwa Hong from 5.719 per cent to 5.738 per cent.
Dr Ong acquired 125,000 shares for a consideration of S$37,835 at S$0.3027 per share.
This also increased the deemed and hence total interest of Dr Ong's father, Steven Ong Kay Eng, in Hwa Hong to 15.391 per cent.
Dr Ong's preceding acquisition of Hwa Hong shares was on July 4 at S$0.31 per share.
On July 29, LY Corporation executive chairman Tan Kwee Chai acquired 80,000 shares of the listed company for a consideration of S$16,126 at an average price of S$0.202 per share.
This took Mr Tan's total stake in the manufacturer and exporter of wooden bedroom furniture to 72.28 per cent.
Mr Tan's preceding acquisitions were between June 21 and July 1, at an average price of S$0.205 per share.
Mr Tan is one of LY Corporation's founders and is responsible for the group's overall management and operations, including formulating the group's strategic directions and expansion plans.
- The writer is the market strategist at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.