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4 stocks this week [1 May 2017]: Capital World; BreadTalk; StarHub; OUE H-Tr

We look at newly IPO company, Capital World; and more established BreadTalk; StarHub; OUE H-Trust this week.

The first two weeks of May will see two consecutive short weeks for the markets. While this may diminish market activity, it provides a good time for reflection after the flurry of results release and Annual General Meetings.

Our 4 Stocks This Week column continues to cover stocks of interest in the market and those that our friends and readers have brought to our attention. If you come across such companies or have interesting ideas, do give us a shout out and let us know why which companies these are via our Facebook page or email.

Market Sentiments

Market watchers have come to terms realising geopolitical risks will continue to persist globally. This translated to a rise in buying confidence which pushed the Morgan Stanley Capital International (MSCI) All Country World Index (AWCI), an index made up of 23 developed markets and 23 emerging markets worldwide, to yet again break new highs during the week. It rose about 1.0% to end at 459.17 on Friday (5 May 2017).

In Singapore, the SGX announced that market turnover for securities was $21.6 billion in April. While this represented an improvement of 2% from a year ago, it was 26% down from March 2017. Broadly, the Straits Times Index (STI) mimicked the rise in equities globally ending 1.7% higher at 3229.73 on Friday (5 May 2017). Notably, the STI broke new 52-week highs again, and has not been at these levels in the last 22 months, since the end of July 2015.

Capital World Limited

With a market capitalisation of more than $250 million, Capital world made its debut on Singapore’s stock market on Friday (5 May 2017). Based in Johor, the company is an integrated property developer focusing on joint ventures with landowners to enhance the value of land assets. This strategy minimises its capital outlay for land acquisitions.

Capital World is currently working on an integrated development comprising Capital 21 mall, which will be Johor Bahru’s largest shopping mall when completed, as well as an integrated development project comprising a retail mall, office suites, hotel and residential apartments in Johor as a wellness hub in Perak, Malaysia.

Also Read: How To Diversify Your Investment Portfolio Outside Of Singapore

The company, which was listed through an RTO (Reverse Take Over) of marble company Terratech, began trading at $0.198 and closed approximately 8.1% down after ending the day $0.016 lower at $0.182.

BreadTalk Group Limited

Regional food and beverage group, BreadTalk Group, released its 1st quarter 2017 results on Wednesday (3 May 2017), announcing a 337.2% rise in net profit to $10.7 million from the year before. This was primarily a result of its cost control measures.

This was despite a 4.5% reduction in its revenue to $147.6 million, mainly due weaker Chinese business in both its Bakery and Food Atrium Division, and stable Restaurant Division in Singapore.

Also Read: Why Establishing A Strong Portfolio Of Brands Such As Ajisen Ramen & Menya Musashi Is Similar To Investing In The Stock Market

On the back of a $9.3 million net capital gain on its divestment of TripleOne Somerset, BreadTalk Group also announced a special dividend $0.02 per share.

This week, BreadTalk Group’s share price increased 11.1% from $1.350 to $1.50, at a level not seen since February 2013. It has also risen 29.3% and 33.8% since the start of the year and in the past 52 weeks respectively.

BreadTalk Group Limited share price chart (1-week)

Source: Yahoo! Finance/ Google Finance

StarHub Ltd.

StarHub, Singapore second largest telecommunications giant, also released its 1st quarter 2017 results on Wednesday (3 May 2017). While its total revenue crept up 0.2%, operating expenses rose 2.6%. Overall, this adversely impacted its net profit which fell 21.3%.

Revenue from its Mobile and Pay TV business took a hit during the quarter, posting reduced contributions of 0.6% and 6.8% to $296.2 and $88.4 million respectively. This was offset by better performances in its Broadband and Enterprise Fixed business which raked in 0.5% and 2.9% higher revenue to $53.7 million and $98.7 million respectively. In addition, Sales of equipment also improved 13.7% contributing 55.3 million in revenue.

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It kept its dividend constant at $0.04. In February 2017, when it reported its 4th quarter 2016 results, the company stated would reduce its quarterly dividend distribution by 20%, from $0.05 to $0.04 per share, moving forward.

In the past week, its share price declined less than 1.0%. Looking further back, it has declined 1.4% and 11.4% in the year-to-date and past 52 weeks respectively.

StarHub Ltd share price chart (1-week)

Source: Yahoo! Finance/ Google Finance

OUE Hospitality Trust

OUE Hospitality Trust (OUE H-Trust) is a hospitality trust owning the Crowne Plaza Changi Airport Hotel, Mandarin Orchard Singapore and Mandarin Gallery. It too posted its 1st quarter 2017 results this week, on Thursday (4 May 2017).

Also Read: How REITs Performed in 2016

It put in a solid performance, with 6.4% increase in revenue and 18.2% increase in distribution per share of $0.013. This was achieved on the back of better revenue from its Crowne Plaza Changi Airport Hotel within its Hospitality segment, slightly offset by lower contribution from Mandarin Orchard Singapore. In its Retail segment, revenue from Mandarin Gallery rose 12.3%.

In the past week, its share price stayed constant. In the year-to-date and in the past 52 weeks, it has returned 9.1% and 14.2% respectively.

OUE H-Trust share price chart (1-week)

Source: Yahoo! Finance/ Google Finance

Also Read: 4 stocks this week [24 Apr 2017]: Aoxin; Asian Pay TV; Memtech; SembMarine


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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.