Fewer buybacks, director transactions in results season
FOR the four local trading sessions that spanned Aug 3 to 6, the Straits Times Index (STI) gained 1.3 per cent, with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index averaging a five-day 0.2 per cent gain. This has brought the STI's decline in total return for the 2020 year to Aug 6 to 18.3 per cent.
Over the four sessions, the iEdge S-Reit Index gained 0.5 per cent, bringing its decline in total return for the 2020 year to Aug 6 to 5.3 per cent.
Share buybacks
With earnings season in full swing, there were just two primary-listed stocks conducting share buybacks over the four e sessions that spanned Aug 3 to 6 with a total consideration of S$54,917, higher than the S$24,193 from the preceding week.
Total share buyback consideration for the month of July totalled S$2.9 million, down from S$12.6 million in June and down from S$14.9 million in May. This was also the lowest monthly consideration recorded in recent years.
The four companies that commenced new buybacks in July were Spackman Entertainment Group, Zhongmin Baihui Retail Group, LY Corporation and Choo Chiang Holdings.
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For the 2020 year through to Aug 6, primary-listed stocks have filed more than S$660 million in buyback consideration, with the bulk of the consideration (S$501 million) filed amid the market volatility of March.
This means the buyback consideration of primary-listed stocks represented less than 0.1 per cent of the total market capitalisation of all stocks listed on SGX, which stood at S$813.5 billion as at the end of July.
The STI's 10-day volatility was contained between 10 per cent and 17 per cent for the entire month of July, after reaching as high as 80 per cent on March 25 and 31.
In addition, as best practice, companies should 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 four trading sessions through to Aug 6 saw less than 50 changes in director interests and substantial shareholdings, filed for 27 primary-listed stocks.
This included three company director acquisitions, with one disposal filed, and substantial shareholders filing eight acquisitions and three disposals.
Indofood Agri Resources
On Aug 4, PT Indofood Sukses Makmur Tbk (PT ISM) filed that it had acquired 871,000 shares of Indofood Agri Resources during the period of June 16, 2020 to Aug 4, 2020, excluding the blackout period on July 14, 2020 to July 29, 2020.
Acquired for a consideration of S$262,519, the average price of paid for the 871,000 shares was 30.14 cents per share.
PT ISM is a holding company of Indofood Singapore Holdings Pte Ltd (ISHPL) with an interest of approximately 83.84 per cent of the total number of issued shares in ISHPL.
The acquisition increased the total interest of PT ISM in Indofood Agri Resources from 82.86 per cent to 82.92 per cent. The preceding acquisitions saw PT ISM acquiring 11,881,800 shares of Indofood Agri Resources at an average price of 28.94 cents per share between March 17, 2020 and June 15, 2020.
On July 30, Indofood Agri Resources reported higher revenue and gross profit in H1FY20 (ended 30 June) despite challenging market conditions and Covid-19. The higher revenue and gross profit were mainly due to higher selling prices of palm and edible oils and fats (EOF) products.
Notwithstanding this, the group continued to report net loss in H1FY20. For the six-month period, the group reported a higher net loss of 575 billion rupiah (S$53.9 million) despite higher gross profit and higher joint venture results, as well as lower general and administrative expenses.
The company noted that this was largely due to loss arising from changes in fair value of biological assets.
This was a result of lower volume and a lower FFB price compared to December 2019, and a higher share of losses of associate companies and higher income tax expenses arising from deferred tax adjustments, a result of tax rate changes in Indonesia.
Key plantation strategies for Indofood Agri Resources in 2020 include: (i) the replanting of older palms in North Sumatra and Riau with higher yielding seed varieties and
(ii) the expansion of milling facilities - a target completion of a 45MT FFB/ hour mill in East Kalimantan in Q4FY20.
For its EOF segment, key strategies include:
(i) a competitive marketing strategy for Bimoli to maintain its leading brand position;
(ii) continuing to capitalise on Delima as second brand in the more affordable segment;
(iii) increased penetration of the premium Palmia Margarine with new and improved products and
(iv) incrementally increase capacity, to meet growing consumer demand in Indonesia.
Neo Group
On July 30, Neo Group founder, chairman and CEO Neo Kah Kiat continued to increase his direct interest in the Catalist-listed stock. Mr Neo acquired 232,000 shares of Neo Group for a consideration of S$90,800 at 39.1 cents per share. This increased his total interest in the stock to 79.65 per cent.
This followed his acquisition of 2,653,300 shares at 42.0 cents per share on July 24 and 100,000 shares at 38.5 cents per share on July 29.
Back on Feb 13, he acquired 5.2 million shares 30 cents per share.
The spouse of Mr Neo, executive director Sally Liew Oi Peng, also increased her deemed interest in Neo Group with the acquisition to 79.65 per cent.
Multi-Chem
On Aug 4, Multi-Chem CEO Foo Suan Sai acquired 25,300 shares of the listed company for a consideration of S$26,059. At S$1.03 per share, this increased his total interest in Multi-Chem from 68.72 per cent to 68.74 per cent.
Mr Foo is one of the founding shareholders of Multi-Chem, and has more than 20 years of experience in the printed circuit board (PCB) industry, of which the last 29 years were spent building up the company. He is currently responsible for the overall direction and development of the group.
This also increased the total interest of Mr Foo's spouse, Multi-Chem chief operating officer Han Juat Hoon, also a founding shareholder of Multi-Chem.
Mdm Han has been a director of the company since 1987 and commenced working in an executive capacity with the company in 1992.
Mdm Han is well versed in factory operations, having held the appointment of factory manager with a chemical company for 12 years from 1980 to 1992, and responsible for the overall operations of the group.
On Aug 3, Multi-Chem reported that for its H1FY20 (ended 30 June), the group achieved profit after tax of S$8.4 million compared to S$4.8 million in H1FY19. For its H1FY20, the IT division accounted for 99.5 per cent of the group's revenue, while the PCB division accounted for the remaining 0.5 per cent of the group's revenue.
The IT distribution business achieved revenue of S$225 million in H1FY20, an increase of 13.9 per cent from H1FY19, mainly due to the increase in customer demands arising from the push in and increased reliance on digital technologies during the Covid-19 pandemic.
The group noted that it maintains a focused strategy of selling and promoting only the best-of-breed IT products.
Among the products it currently carries are industry-leading IT products from Carbon Black, Check Point, CyberArk, McAfee, Imperva, Proofpoint, Riverbed, RSA, Solarwinds, Symantec (a division of Broadcom) and Trend Micro.
VibroPower Corporation
On Aug 4, VibroPower Corporation substantial shareholder Chng Beng Hock increased his total interest in the stock from 10.23 per cent to 10.32 per cent.
With a consideration of S$6,926, the 48,200 shares were acquired at an average price of 14.37 cents per share.
Mr Chng has gradually increased his substantial shareholding in VibroPower from 5.24 per cent on June 15. VibroPower is expected to release its H1FY20 (ended June 30) financial results on or before Aug 14, 2020.
On June 22, the listed company provided guidance that based on a preliminary assessment of the group's management report, it is expected to report a net loss for H1FY20.
It noted that revenue in Q2FY20 was adversely affected by Covid19 as most of its customers' projects delivery schedules were delayed due to the stoppage of construction activities due to the circuit-breaker measures during that period.
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