Frencken directors add stake; Wilmar leads buybacks in final 2 weeks of 2021

FOR the 10 trading sessions between Dec 17 and Dec 30, the Straits Times Index (STI) fell 0.1 per cent, with the FTSE China A50 Index declining 3 per cent while the Hang Seng Index fell 1.5 per cent and the FTSE Bursa Malaysia KLCI gained 4 per cent.

Among the STI constituents, Yangzijiang Shipbuilding was the top gainer with its shares rising 4.7 per cent to S$1.35. Other gainers included Dairy Farm International, CapitaLand Integrated Commercial Trust, and ComfortDelGro Corporation.

Meanwhile, shares of Singtel were the biggest decliner, with a 4.5 per cent slide.

Institutional investors were net buyers during the week of Dec 20 - for the first time in 4 weeks - with net inflows of S$38.5 million. DBS and UOB were the counters with the highest net institutional inflows during that week. City Developments and Singtel were the counters with the highest net outflows.

Director and substantial shareholder transactions

The 10 trading sessions saw 205 changes in director interests and substantial shareholdings filed for over 70 primary-listed stocks.

Yangzijiang Shipbuilding

Substantial shareholder Wang Dong, a founding member of Yangzijiang and its former deputy general manager, relinquished his stake in the company on Dec 23.

Wang held some 394.1 million shares in Yangzijiang - around 10 per cent of the company via his 100 per cent stake in Lido Point Investments.

He transferred the shares of Lido Point to a new irrevocable employee benefit trust set up for the purpose of rewarding employees of the group, and he no longer has any shareholding in Yangzijiang following the transfer.

The trust will be managed and administered by the Zedra Trust Company (Singapore) as professional trustees, alongside an employee council comprising persons selected by the labour union of the group.

Wang, who retired from the group in 2019, said it was his wish "that the employee benefit trust will reward and motivate the group to reach greater heights and foster a sense of personal ownership by the employees".

Frencken

Frencken said on Dec 18 that its chairman Gooi Soon Chai had increased his stake in the company during that week, through purchases in the open market.

Gooi bought 50,000 shares for a total of S$96,000. This increases his direct interest in the company to 6.92 million shares or 1.62 per cent of the total number of ordinary voting shares.

His total direct and deemed interest stands at 100.1 million, or 23.4 per cent of the company.

Meanwhile, Frencken's lead independent director, Ling Yong Wah, on Dec 23 also bought shares in the company. Ling, who is also the chief executive of Catalist-listed Vallianz Holdings, did not own any shares in Frencken prior to the latest transaction.

He acquired 55,000 shares via a market transaction for a total consideration of S$101,200 or around S$1.84 apiece. His current stake represents 0.01 per cent of the total ordinary voting shares in the company

The share price of Frencken - a technology solutions provider - rose from S$1.32 at the end of 2020 to as high as S$2.52 in September, amid increased revenue from its semiconductor business.

But the shares have seen a correction in the past month, following its third quarter business update on Nov 11. The company had said in its outlook it expected overall revenue to "remain stable" in the second half of the year compared with H1, a change from the previous outlook statement where it had expected a "moderate increase".

Miyoshi

Sycamore Equity Fund became a substantial shareholder in Miyoshi, following a placement exercise, which was completed on Dec 27, but pared its stake below the 5 per cent threshold shortly after.

Sycamore acquired some 33.8 million shares in the company for a consideration of S$700,000, taking its stake in the company to 5.1 per cent. Prior to this transaction, it owned 34,918 Miyoshi shares.

On Dec 29, Sycamore disposed of 1.45 million shares via a market transaction, paring its stake down to 4.9 per cent, and ceasing to be a substantial shareholder.

Sycamore had, under an earlier framework agreement, undertaken not to hold more than 5 per cent of the enlarged share capital of Miyoshi at any one time. This was to demonstrate it had no intention to take control of the company, in view of the structure of a previous placement exercise. The undertaking was revoked under the latest placement agreement, as the structure allows parties to determine the exact shareholding after the placement.

Miyoshi had announced the placement exercise on Dec 16, and the intent was to use the net proceeds for "opportunistic acquisitions, joint ventures (JVs), partnerships and investments to provide the group with new revenue streams and improve its prospects", and for working capital purposes. The placement raised gross proceeds of S$1 million.

The Catalist-listed company had on Dec 13 proposed a diversification of its business into trading of commodities, with an initial focus on rice, sugar, corn and feed. Its existing business includes engineering services, manufacturing of consumer electronics and metal precision components, and indoor farming. Miyoshi had said it remains committed to the existing business so long as its continuity is in the best interest of the group.

Sycamore Equity Fund's investment objective is to achieve medium- to long-term capital appreciation through investment in various financial instruments that assist small and medium capitalisation, publicly listed companies.

Metech International

Several large shareholders in Catalist-listed Metech raised their stakes in the company in the final weeks of December.

The company had a new substantial shareholder, Ng Eng Tiong, on Dec 23, after he purchased some 3.5 million shares of the company via a market transaction for S$1.3 million. He later acquired an additional 2.5 million shares for S$902,500 on Dec 24, taking his interest to 10.8 million shares or 7.3 per cent of the company as of the acquisition date.

Substantial shareholder Lim Hean Nerng, was also a buyer of shares on Dec 24, acquiring 1 million shares via a market transaction for S$365,000. This resulted in an increase of his total interest in the company's shares to 19.8 million, or 13.3 per cent of the company as of that date.

Metech shares have climbed 18.6 per cent in December, and the Singapore Exchange (SGX) on Dec 20 queried the company on "unusual volume movements" in its shares recently.

The company noted that it had in September entered into an agreement to establish a JV, in line with the group's strategy to expand into the environmental and sustainability business and manufacturing and distribution of lab-grown diamonds.

It announced its circular seeking shareholder approval for the proposed business diversification on Dec 24. Metech also said on the same day that its JV company Asian Eco Technology (AET) has entered into a strategic collaboration agreement with an entity known as Ningbo Meishan.

According to Metech, Ningbo Meishan has the intention "to provide funding of US$100 million in AET's lab-grown diamond business activities through debt and/or equity financing".

Buybacks

Between Dec 17 and Dec 30, some 23 companies on the SGX reported share buybacks with a total consideration of S$31.8 million.

During the period, Wilmar International led the consideration tally, with the purchase of nearly 2.2 million shares over 2 sessions for a total of S$8.9 million.

The agribusiness giant bought back the shares at price levels of between S$4.02 and S$4.11, close to the weakest levels seen this year for the counter. Wilmar had in February traded as high as S$5.64.

Since the beginning of its share buyback mandate in April, the company has bought back some 19.9 million shares.

Several other STI constituent companies were also carrying out buybacks during the last 2 weeks of the year.

CapitaLand Investment carried out buybacks over 2 sessions, purchasing some 2.3 million shares for S$7.8 million. Since its share purchase mandate in July, nearly 62 million shares have been purchased.

Other companies that were leaders in the consideration tally over the past 2 weeks include Yangzijiang Shipbuilding - which purchased some 3 million shares for S$3.9 million - as well as OCBC, which bought back 200,000 shares for S$2.3 million.