Would Sincere Watch be a good buy for Cortina?

RUMOURS are swirling that Cortina Holdings is considering buying privately-held Sincere Watches, and the price movements of Singapore Exchange-listed Cortina may be reflecting the murmurs on the grapevine.

Shares of Cortina rose from S$1.32 on July 30 to S$1.56 on Aug 3, an 18 per cent gain over the two trading sessions. The counter ended up S$0.05 to S$1.60 on Wednesday.

The mainboard-listed luxury watch retailer had on July 30 declared special and final dividends of 2.5 Singapore cents in total - on top of the four-Singapore cents interim dividend announced earlier that month - but the magnitude of the share price gain seems disproportionate to the dividends declared.