Our 4 Stocks This Week column will look at companies/entities that have newly become publicly traded on the Singapore Exchange (SGX). In recent years, there has been much talk of companies delisting from the SGX due to a variety of reasons from poor valuations to getting around legal liabilities.
In last week’s edition of our column, we featured several companies that have come under the spotlight for these reasons. You can read more in the link below.
Most recently, Osim, renowned for its massage chairs and other related products, filed for a listing in Hong Kong under a new name, V3. This comes just over a year after delisting from SGX at $1.39. Its price in Hong Kong has not been set yet, but commentators, and logic, judge that it will be better than its delisting value.
This begs a tough question – How relevant is the SGX? While it may be unfair to bring up this question just on the basis of Osim’s delisting and re-listing on a different exchange, as it may have to do with Osim’s own business expansion plans, SGX certainly has to take a good hard look at itself to ensure it remains a relevant exchange on the international stage.
Before going into the article, we always ask our readers, especially for this column, to share their thoughts, opinions or questions on listed companies in Singapore that are interesting to them. Do let us know why you think they’re interesting via our Facebook page or email.
To give us some perspective on the overall global economy, we start by first looking at how the Morgan Stanley Capital International (MSCI) All Country World Index (AWCI), an index made up of 23 developed markets and 23 emerging markets worldwide. This week, MSCI AWCI closed a shade lower, ending the week at 447.26 on Friday (7 April 2017).
In Singapore, the Straits Times Index (STI) increased marginally for the week, reaching a high of 3187.51 on Monday (3 April 2017) before losing some of the gains for the week to settle at 3177.27 on Friday (7 April 2017).
For 1Q2017, the STI actually generated a dividend-inclusive return of 10.6% on the back of strong performances from the real estate and industrials sector, including Yangzijiang Shipbuilding, Global Logistic Properties, City Developments, CapitaLand and Keppel. This more than doubles the average returns from Asia’s seven largest stock benchmark, and places it just behind India’s Nifty 50 Index. For the year to date, the STI has risen over 10.3%, and in the last 52 weeks, it has improved 17.5%.
ONE STOXX ASEAN Select Dividend Exchange Traded Fund
On Wednesday (5 April 2017), SGX welcomed One STOXX ASEAN Select Dividend Exchange Traded Fund (ETF). Starting at $2.972 on its Wednesday (5 April 2017) debut, it has come down slightly to end at $2.951 on Friday (7 April 2017).
This ETF, listed by Thailand’s largest ETF issuer, One Asset Management, has exposure to some of South East Asia’s 30 highest dividend-paying stocks from Singapore (23.71%), Malaysia (23.36%), Indonesia (22.58%), Thailand (16.75%), Philippines (10.07%) and Vietnam (3.06%).
Some of its constituents include regional heavyweights such as Thailand’s TIPCO ASPHALT; Philippines’ Globe Telecom Inc; Indonesia’s Bank Negara Indonesia and United Tractors; and Malaysia’s Hap Seng Consolidated, Sime Darby and Malayan Banking (Maybank), as well as other regional companies.
The ETF also comprises Singapore blue-chip companies – Keppel Corporation, Singapore Airlines, OCBC, Singapore Post, Singtel, Yangzijiang and Venture Corp.
This ETF, which does not take REITs into consideration, has a trailing annual dividend yield of close to 4%. Investors should take note of the fees associated with this product however, which includes brokers fees to buy and sell the ETF on the Singapore exchange, as well as management fees, which may go up to 2.5%, and trustee fees around 0.15%.
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF
NikkoAM-Straits Trading Asia Ex Japan REIT ETF was listed on the stock exchange on Wednesday (29 March 2017). Focused on REITs in Singapore (60.5%) and Hong Kong (23.0%), the ETF also includes REITs from other countries such as Malaysia, China and Indonesia, and it excludes REITs from Japan.
This REIT ETF is a partnership between Nikko Asset Management (NikkoAM) and Straits Trading Company. NikkoAM is a well-regarded Japanese fund house that already manages the Nikko AM Singapore STI ETF, which tracks the local country index, and ABF Singapore Bond Index Fund, which tracks highly rated bonds in Singapore. Listed on the SGX, Straits Trading Company is one of Singapore’s oldest companies, incorporated in 1887, with a focus on real estate, hospitality and resources.
This REIT ETF tracks the FTSE EPRA/NAREIT Asia ex-Japan NET Total Return REIT Index, which means it will replicate what the index does in terms of adding new REITs or removing REITs from the index. It may charge fees of close to 0.8% per annum, with management fees (0.5%), trustee fees (0.04%), custodian fees (0.1% or higher) and administration fees (approximately 0.04%).
In the last week, its share price increased close to 1% to end at $1.024 on Friday (7 April 2017).
Samurai 2K Aerosol Limited
Samurai 2K Aerosol Limited was the first stock to list on the SGX in January 2017.
Based in Malaysia, the aerosol coating specialist produces high performance coating solutions for the automotive refinishing and refurbishing industry, and distributes its products in Malaysia, Indonesia, Thailand and Philippines.
In the past couple of months, it has also started using its IPO proceeds to expand its production facilities. It has not realised any financial figures since its IPO, however, in FY2016, its revenue increased by 178.3%.
On its trading debut on 16 January 2017, it closed 23% up from its Initial Public Offering (IPO) price of $0.20, at $0.245.
Since then, the company has seen its stock price decrease to a low of $0.188, in mid-February, and is currently trading at $0.23. In the past week, its share rose nearly 2.2%. Although, investors should consider the relative illiquidity of the stock.
Samurai 2K Aerosol share price chart (1-week)
Source: Yahoo! Finance/ Google Finance
UnUsUal Limited will list on the SGX Monday (10 April 2017), at a price of $0.20. Significantly, retail investors have no chance to buy this stock before it hits the market as there is no public tranche. UnUsUal is a subsidiary of mm2 Asia, another listed company which holds 41.9% of UnUsUal.
In the business of event and concert production, promoting large scale events of internationally renowned artistes such as Jacky Cheung, UnUsUal’s IPO will allow investors to get in on the event planning and concert business in Singapore.
UnUsUal has worked on over 150 large scale live concerts and 200 events, including 12-15 shows a year in Singapore. To boost its growth, with the IPO proceeds, it will aim to expand its business to other markets such as Malaysia, Hong Kong and even 2nd-tier cities in China. It also has plans to shift into downstream services such as ticketing platforms and venue management.
We left out Kimly’s IPO as we’ve covered the company, more than once, in our column in the past. To read up on the stock, click on the link below.
4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.
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