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INSIDE INSIGHTS

Eight STI stocks go ex-dividend; earnings remain in focus

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 3 the STI generated a 6.4 per cent total return, compared to these three regional indices averaging a 0.3 per cent return, while the Dow Jones has declined 3 per cent, in SGD terms.

For the four trading sessions ended May 3, the STI returned 0.8 per cent, with the three benchmarks of the region averaging a comparatively firmer 1.8 per cent total return.

Bundle of STI dividends

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As much as 0.6 percentage points of the STI's 0.8 per cent return over those four sessions were attributed to eight STI stocks going ex-dividend.

Ascendas Reit's 7.88 cents per share distribution and City Developments' 14 cents per share dividend both went ex-dividend on April 27. Genting Singapore Plc's 2 cents per share dividend and Singapore Press Holdings' 6 cents per share dividend followed, both going ex-dividend on April 30.

On May 2, UOL Group's 17.5 cent per share dividend went ex-dividend. Then, on May 3, another three STI stocks went ex-dividend, DBS Group Holdings' S$1.10 per share dividend, ComfortDelGro Corporation's 6.05 cents per share dividend and Wilmar International's 7 cents per share dividend.

Share buybacks

During the four sessions share buyback consideration continued its significant slowdown, amounting to just S$1.7 million over the four sessions. This is a textbook seasonal effect as the March quarterly earnings continues in earnest.

Just two primary-listed companies, Hi-P International and UOB Group bought back their SGX-listed shares. Both transactions took place on May 3, which for both stocks was the immediate session that followed the release of their Q1FY18 earnings.

Hi-P International reported a 19.9 per cent year-on-year (yoy) increase in profit after tax to S$10.1 million for Q1FY18, while UOB Group reported record net earnings of S$978 million for its Q1FY18, up 21 per cent yoy.

For the overall month of April, 22 stocks repurchased 40 million shares for a total consideration of S$117 million.

The buyback consideration was down 47 per cent from the 30-month high of S$222 million reported in March.

However, the S$117 million in consideration was up significantly yoy, from S$19 million in April 2017. Late April coincided with the beginning of March quarter earnings season in addition to AGMs for FYs ending Dec 31, where 12-month buybacks are typically scheduled to be approved by shareholders.

The four sessions also saw 59 primary-listed stocks lodge 175 changes in director interests or substantial shareholders.

There were 19 director acquisitions and no disposals filed, while substantial shareholders filed 12 acquisitions and four disposals.

Director and substantial shareholder transactions

On April 26 and April 27, UOB-Kay Hian Holdings (UOBKH) chairman and managing director Wee Ee Chao acquired a further 155,800 shares of UOBKH at an average price of S$1.384 per share.

With a consideration of S$215,680 this took Mr Wee's total stake in UOBKH to 26.75 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.

Roxy-Pacific Holdings executive chairman and CEO Teo Hong Lim also acquired another 100,000 shares of the company on April 27, for a consideration of S$51,500. Mr Teo is deemed to maintain the majority shareholding of the company with a total stake of 61.73 per cent.

Mr Teo has been a director of Roxy-Pacific since May 1993 and currently sets out the group's strategies and leads overall management. Roxy-Pacific is scheduled to release its Q1FY18 results after trading on May 14.

Imperium Crown

Between April 30 and May 2, Henry Wee increased his substantial shareholding in Imperium Crown from 20.29 per cent to 21.93 per cent. With a total consideration of S$858,900, the 12.9 million shares were acquired at an average price of S$0.06658 per share.

From March 23 through to May 2 Mr Wee acquired some 60.31 million shares of Imperium Crown, increasing his stake in the stock from 14.28 per cent.

Imperium Crown has continued its strategic reallocation of capital to new projects. As discussed in this column last week, Imperium Crown has entered into share options agreements with Mr Wee and its executive director Sun Bowen.

Proceeds from the exercise of the options are intended to be split 25 per cent to development of projects in Shandong province and 75 per cent to potential future investments in Shandong province.

Hotel Grand Central

On April 26 and 27, Tan Chee Hoe & Sons Holdings Pte Ltd increased its direct stake in Hotel Grand Central from 53.460 per cent to 53.478 per cent.

The substantial shareholder of the company acquired 120,000 shares for a consideration of S$189,420 at an average price of S$1.5785 per share.

From March 5 through to April 27, Tan Chee Hoe & Sons Holdings Pte Ltd acquired some 1.81 million shares, increasing its stake from 53.216 per cent. When this recent wave of acquisitions began on March 5, the average price of that transaction was S$1.469 per share.

On March 1, Hotel Grand Central reported its FY17 (ended Dec 31) total revenue increased by 8 per cent yoy mainly attributed to the maiden contribution of revenue by Grand Central Building, Christchurch which started recognising rental income in January 2017.

Additional attributions included the purchase of two new investment properties in Christchurch and Hamilton, New Zealand respectively in Q3FY17.

The decrease in the group's FY17 profit net of tax was impacted by the non-recurrence of the one off gain on the disposal of the Hotel Grand Chancellor Surfers Paradise in Q3FY16.

Looking forward, management noted that subject to the sustained improvement in the global economic growth, and barring unforeseen circumstances, the hotel markets where the group primarily operates in are generally expected to improve in 2018.

Hotel Grand Central's chairman and managing director Tan Eng Teong, executive director Tan Teck Lin and non-independent non-executive director Tan Eng How are brothers and are each deemed to have an interest in Tan Chee Hoe & Sons Holdings Pte Ltd.

Abundance International

On April 26, Abundance International managing director Sam Kok Yin acquired 200,000 shares of the Catalist-listed stock at a consideration of S$6,800.

This took Mr Sam's total stake in the company from 16.40 per cent to 16.43 per cent.

Mr Sam is responsible for the overall business operations and management of the group's business, particularly in the new chemical and investment business.

Abundance International's executive chairman Shi Jiangang maintains a 37.09 per cent direct stake in the stock.

Mr Sam's preceding acquisitions of shares in Abundance International were between Nov 22 and 23, 2017, when he acquired 2.561 million shares for a consideration of S$62,865.

With its FY17 (ended Dec 31) financials, Mr Sam noted that the wholly-owned subsidiary Orient-Salt Chemicals Pte Ltd and its subsidiaries performed well.

He added that the business managed to obtain more trade facilities from banks, and credit terms from suppliers, during the year.

Mr Sam also noted that with increased support from banks and suppliers, and with its operations achieving a more significant scale, the business will work towards increasing its profit margins.

Looking forward, Mr Sam stated that Abundance International will tap its strong supply and distribution network with the intention of gradually increasing the types of chemicals that it trades in, while constantly exploring and evaluating other chemical related investments.

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