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INSIDE INSIGHTS

Venture buys back shares; Oxley and YPIL increase UEL stake

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 10, the STI generated a 5.4 per cent total return, compared to these three regional indices averaging a 0.5 per cent return, while the Dow Jones has gained one per cent, in SGD terms.

For the five trading sessions ended May 10, the STI declined 0.9 per cent, with the three benchmarks of the region averaging a comparatively firmer 1.2 per cent total return.

Share buybacks

The five sessions saw share buyback consideration regain momentum, totalling S$19.6 million. This was up from just S$1.7 million over the preceding four sessions which was impacted by company reporting.

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OCBC commenced buybacks under the renewed mandate which was approved on April 30. The previous 12-month mandate saw OCBC buy back 25.56 million shares representing 0.61 per cent of its issued shares excluding treasury shares at the time of approval.

Last week also saw Venture Corporation buy back 186,000 shares for a consideration of S$3.9 million. The last time Venture Corporation bought back its shares was two instances back in mid-2016, and before then, November 2013. At the recent AGM, 54.8 per cent of votes were registered for the Renewal of the Share Purchase Mandate which has a maximum limit of 10 per cent of the total number of issued shares as at April 24, 2018.

Director and substantial shareholder transactions

The five sessions saw 42 primary-listed stocks lodge just 89 changes in director interests or substantial shareholders. There were 16 director acquisitions and no disposals filed, while substantial shareholders filed 11 acquisitions and two disposals.

SMJ International Holdings substantial shareholder Nellie Ho Wan Jing reduced her stake in the Catalist-listed stock from 16.41 per cent to 4.99 per cent.

The married deal saw new substantial shareholder Lu Ning acquire the 8,910,000 shares sold by Ms Ho for a consideration of S$1,336,500.

Ms Ho recently retired from her role as a non-executive director of the group. As reported by The Business Times on May 4, Ms Ho was previously re-designated from executive director and deputy CEO to non-executive director following an EGM held in December 2017 as part of the company's move to dispose of its carpet business, SMJ Furnishings.

United Engineers

On May 7, Oxley Holdings increased its direct interest in United Engineers (UEL) from 16.78 per cent to 17.02 per cent. The acquisition saw 1,529,000 shares acquired for a consideration of S$4,084,357 at an average price of S$2.671 per share.

Oxley executive chairman and CEO Ching Chiat Kwong and deputy CEO and executive director Low See Chin hold respective interests of 41.12 per cent and 27.59 per cent of the total issued shares (excluding treasury shares) of Oxley Holdings. This means their respective total stakes in UEL are now 17.02 per cent and 18.10 per cent, respectively.

Yanlord Perennial Investment (Singapore) Pte Ltd (YPIL) also upped its stake in UEL, at S$2.68 per share. On May 8, YPIL acquired 200,000 shares of UEL, for a consideration of S$536,000. This took the deemed UEL interest of its executive chairman Zhong Sheng Jian to 33.75 per cent.

On May 7, United Engineers reported that the group's attributable profit increased 3 per cent to S$9 million in Q1FY18 from S$8.7 million in Q1FY17.

United Engineers noted with the results, that in Singapore, it intended to embark on asset enhancement initiatives for its investment properties and may make selective acquisitions if and when such opportunities arise.

UIC

Between May 4 and 8, UOL Equity Investments Pte Ltd acquired 101,600 shares of United Industrial Corporation (UIC) at an average price of S$3.254 per share. This took the total UIC stake held by its chairman and non-executive and non-independent director, Wee Cho Yaw, to 49.848 per cent. This stake has gradually increased from 49.760 per cent in early November 2017.

On April 27, UIC reported Q1FY18 net profit of S$69.5 million, a 3 per cent year-on-year (yoy) increase. This followed its FY17 net profit of S$324.9 million, which was a 17 per cent yoy increase compared to FY16.

In the recently released FY17 Annual Report, Mr Wee noted that last year the group performed well in Singapore in all three sectors, namely, office leasing, residential sales and hotel operations. In China, he noted the group's performance was good, with improved residential sales notwithstanding property supply and regulatory issues.

While the veteran banker with 60 years of experience has retired from his longstanding position on the board of UOB, he remains as chairman emeritus and honorary adviser to UOB.

Vicplas

Last week Vicplas International (Vicplas) non-executive director Robert Gaines-Cooper continued to increase his stake in the stock. Mr Gaines-Cooper acquired 895,000 shares of Vicplas between May 3 and May 8, for a consideration of S$94,563.

This took Mr Gaines-Cooper's direct stake in Vicplas to 2.87 per cent, from 2.69 per cent. Mr Gaines-Cooper also maintains a deemed interest of 280,852,441 shares in Vicplas, through Venner Capital SA which brings his total stake in Vicplas to 58.46 per cent.

Vicplas currently maintains a market capitalisation of S$54 million which is below the S$75 million market capitalisation threshold that actuates quarterly reporting. The group has two core businesses. The first segment is the research, design, development and manufacture of innovative medical devices through its subsidiary, Forefront Medical Technology (Pte) Ltd.

Revenue for the medical devices segment was S$14.3 million in H1FY18 (ended Jan 31), which was an increase of 11.7 per cent from H1FY17, due to increased orders from its customers.

The second segment is the manufacturing and distribution of plastic building products, including unplasticised polyvinyl chloride pipes and pipe fittings and electrical conduits.

The pipes and pipe fittings segment recorded revenue of S$19.7 million in H1FY18, unchanged from H1FY17. Mr Gaines-Cooper has gradually increased his total stake in the stock from 58.32 per cent in March 2017.

shopper360

On May 3, shopper360 executive chairman and group managing director Chew Sue Ann acquired 75,000 shares of the stock for a consideration of S$17,000. This took Ms Chew's stake in the Catalist-listed stock from 0.22 per cent to 0.28 per cent.

Back in January, shopper360 reported its H1FY18 net profit (ended Nov 30) increased marginally by RM 0.1 million or 4 per cent to RM 4.6 million. The group noted that it continued to secure new projects for its Malaysian and regional operations and, barring unforeseen circumstances, remained cautiously optimistic about its performance for the financial year ending May 31, 2018.

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