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Earnings season slows share buyback momentum
THE earnings season is in full swing with approximately 70 stocks reporting financials over the five sessions ended Aug 2.
For the 2018 year through to Aug 2, the Straits Times Index (STI) generated a 1.3 per cent decline in total return, compared to the Nikkei 225, Hang Seng and S&P/ASX 200 Indices averaging a 0.6 per cent gain.
Meanwhile the Dow Jones has gained 6 per cent in SGD terms. For the five trading sessions ended Aug 2, the STI declined 1.3 per cent, in line with the three regional benchmarks also averaging a 1.3 per cent decline.
With the earnings season well underway, share buyback momentum slowed for the five sessions ended Aug 2. Buyback consideration totalled S$5.4 million, down from S$8.3 million the previous week. The S$5.4 million was similar for the corresponding week in 2017, which saw buyback consideration totalling S$4.3 million.
For the month of July, 37 stocks repurchased 52 million shares/units for a total consideration of S$109 million. The buyback consideration was down 37 per cent from S$174 million in June 2018 and up fourfold from S$27 million in July 2017.
For the month, United Overseas Bank led the July tally with the buyback of 1.2 million shares for a consideration of S$32.7 million. The largest buyback consideration posted by a non-STI stock for the month was Wing Tai Hldgs' buyback of 5.6 million shares for a consideration of S$10.7 million.
As reported by The Business Times on Aug 1, companies that started new buyback mandates in July included Kim Heng Offshore & Marine Holdings, developers Ho Bee Land and Tuan Sing Holdings, and tech firms Valuetronics Holdings and Ban Leong Technologies.
Director and substantial shareholder transactions
The five sessions spanning July 27 to Aug 2 saw more than 42 primary-listed stocks lodge 90 changes in director interests or substantial shareholders.
There were eight company director acquisitions and two disposals filed, while substantial shareholders filed nine acquisitions and six disposals.
The 90 filings were lower the 100 transactions filed for the same week in 2017, which were filed by almost 50 stocks.
Substantial shareholder acquisitions were filed for UOB-Kay Hian Holdings, Hwa Hong Corporation, Jadason Enterprises, Suntec Real Estate Investment Trust, CH Offshore and Spackman Entertainment Group.
Substantial shareholder disposals were filed for Haw Par Corporation, Hong Lai Huat Group, Viking Offshore and Marine, Suntec Real Estate Investment Trust, CH Offshore and Choo Chiang Holdings.
Note that substantial shareholder acquisitions or disposals are filed if interests in voting shares of listed corporations (or voting units in a listed Business Trust or Real Estate Investment Trust) cross a percentage level.
Choo Chiang Holdings
On July 24, a married trade saw Lim Trust Pte Ltd sell14.56 million shares of Choo Chiang Holdings for a consideration of S$4,222,400 via a married deal.
This reduced the total holdings of executive chairman and CEO Thomas Lim Teck Chuan in Choo Chiang Holdings from 70 per cent to 63 per cent.
The acquirer of the 14.56 million shares was Thomas Lim's brother, executive director Rocky Lim Teck Seng.
Rocky Lim increased his total stake in the stock from 0.125 per cent to 7.125 per cent.
He started out working in Choo Chiang Electrical Trading Service in 1977, and is currently responsible for the sales and marketing and the development of the group, and the maintenance of relationships with the group's customers and suppliers.
UOB-Kay Hian Holdings
Wee Ee Chao, who serves as chairman and managing director of UOB-Kay Hian, continued to increase his total shareholding in the regional broking and corporate finance services firm.
Between July 26 and 27, Mr Wee bought a total of 248,500 shares for a consideration of S$328,438. This lifted his total interest to 27.58 per cent, which has gradually increased from 26.51 per cent as at the end of 2017.
Spackman Entertainment Group
A married deal on July 27 saw Pheim Asset Management Sdn Bhd and its founder Tan Chong Koay become substantial shareholders of Spackman Entertainment Group Limited (Spackman).
Dr Tan's deemed interest in Spackman increased to 8.93 per cent from 4.46 per cent, with the acquisition of 35,430,000 shares for a consideration of S$2,054,940.
Dr Tan is deemed to have an interest in the shares of Spackman held by Pheim Asset Management Sdn Bhd and Pheim Asset Management (Asia) Pte Ltd for the accounts of their respective clients, by virtue of his shareholdings in the two licensed asset management companies.
On July 30, Allied Technologies executive director Kenneth Low Si Ren acquired 10 million shares of the stock for a consideration of S$381,000.
This has taken Mr Low's direct holdings in the manufacturer of precision stamped metal parts to 42 million shares, representing a stake of 2.37 per cent.
As noted last week, Mr Low was appointed to the board of directors on June 27, 2018 and responsibilities include managing and overseeing the group's strategic investments and corporate development activities.
Since 2007, Mr Low has managed and overseen investments in various seed and growth stage companies in the industry areas of e-commerce, payments, sports and entertainment.
Prior to the appointment, the group proposed and received shareholders' approval (in March 2018) to diversify into new business arena, mainly in e-Commerce and related technologies such as e-payment systems and platforms.
First Sponsor Group
On July 30, First Sponsor Group Limited (FSGL) non-executive chairman Calvin Ho Han Leong acquired 100,000 shares for a consideration of S$132,000.
This took Mr Ho's total stake in FSGL to 45.27 per cent.
The alternate director to the non-executive chairman Ho Han Khoon also acquired 26,600 ordinary shares for a consideration of S$34,193.
This took the alternate director to the non-executive chairman's total stake in FSGL to 44.36 per cent.
FSGL is supported by both its established key controlling shareholders, the Hong Leong Singapore Group of companies, through its shareholding interests in Millennium & Copthorne Hotels plc, and Tai Tak Estates Sendirian Berhad.
FSGL is a mixed property developer in the Netherlands and the PRC, an owner of commercial properties (including hotels) and a provider of property financing services in the Netherlands, Germany and the PRC.
Both the non-executive chairman and the alternate director to the non-executive chairman maintain deemed interests in TT Properties (Asia) Ltd, which holds a 20 per cent interest in First Sponsor Management Limited.
First Sponsor Management Limited in turn holds a 67.5 per cent interest in First Sponsor Capital Limited.
The non-executive chairman's deemed interests also include holdings in SG Investments Pte Ltd.
Stamford Land Corporation
On July 30, independent non-executive director Danny Lim Teck Chai acquired 116,000 shares for a consideration of S$55,100.
This took Mr Lim's stake in Australasia's largest independent owner-operator of luxury hotels to 0.059 per cent.
Mr Lim is currently a partner, capital markets and mergers & acquisitions at Rajah & Tann Singapore LLP, and also serves as a director for Tee Land Limited, UG Healthcare Corporation Limited and Kimly Limited.
Stamford Land Corporation also announced the appointment of independent non-executive director Benjamin Goh Shao Lian on July 27.
Steven Ong Kay Eng continued to increase his total stake in Hwa Hong Corporation (Hwa Hong) with the acquisition of 58,000 shares.
The transaction had a consideration value of S$17,980, and increased Mr Ong's stake in Hwa Hong to 13.54 per cent.
Mr Ong has gradually grown his stake in the company from 10.80 per cent on Nov 28, 2016, and 7.38 per cent at the end of 2014.
On Aug 1, substantial shareholder Liaw Hin Hao continued to acquire 160,400 shares of Jadason Enterprises for a consideration of S$6,126.
The substantial shareholder's direct stake in the stock has gradually increased to 7.4688 per cent, from 6.0834 per cent as at Dec 29, 2017.
- The writer is the market strategist at Singapore Exchange (SGX). To read SGX's market research reports, visit sgx.com/research.