The past week has been a bad one for stock markets around the world. The Dow Jones industrial average had its worse week in two years, following a pair of drops of more than 1,000 points. Both the S&P 500 and the Nasdaq also saw significant decline.
Obviously, Singapore was not spared. After opening the week at 3,474 points, the STI fell to 3,377 by Friday, declining by about 2.8% for the week.
In this week edition of 4 Stocks This Week, we focus our attention on the key developments of four stocks on the Singapore Exchange.
# 1 SingTel
We (almost) never cover the same stock on back-to-back weeks, but SingTel is an exception.
Last week, we wrote that SingTel’s share price was trading at its 52-week lows of $3.49, and that any adverse results could further fuel its downward price trajectory.
Unfortunately for investors, the company announced an 8.5% drop in net profit for 3Q2017. Notable reasons for this decline include 1) decline in revenue from the consumer sector in Singapore and 2) lower profits from subsidiaries and associate companies.
SingTel’s share price fell to $3.38 for the week, a further drop of about 3.1% from last week. You can read up more about their results on the SingTel’s website.
# 2 DBS
Southeast Asia largest company, DBS, announced a fantastic set of results for FY 2017, posting a record net profit of $4.39 billion for the year. This is in spite of DBS’s exposure to the weak oil and gas sector, which we wrote about last year.
To reward shareholders, DBS has increased its dividend payout to $1.20 per share. This is twice the amount that it used to pay in previous years. In additional, DBS announced that this would be the norm moving forward, from 2018 onwards.
This is obviously great news for DBS shareholders. To put this into perspective, an investor who bought DBS’s share a year ago would have paid $18.97. DBS’s share price is now at $26.71, or a gain of about 41%, before including returns from dividends.
# 3 Midas Holding
While DBS is at a high and SingTel may represent a buying opportunity, Midas Holding is a stock that investors need to tread carefully. This was after the company announced that it has uncovered several litigations, enforcement orders and court documents.
These include an enforcement order filed against one of its wholly-owned subsidiary, Jilin Midas Aluminium Industries, for a previously undisclosed liability of 30 million yuan (S$6.3 million).
To further stress the seriousness of this matter, DBS Research has also halt coverage of the stock, saying that it’s not “able to rely on the group’s financial statement”.
Its share price was $0.192, before trading was halted on Friday. It’s likely that its share price will drop significantly when trading resumes.
For existing shareholders of Midas Holding, we advise for you can read the full announcement issued by the management.
# 4 Singapore Exchange
The Singapore Exchange (SGX) and the Bursa Malaysia (BM) are in discussion to introduce a trading link that would allow retail investors in both countries to be able to trade and settle shares in both exchanges in a convenient and cost-efficient way.
The proposed trading link, if successful, will allow both exchanges access to a wider network of investors. This could lead to an increase in trading volume in the exchanges.
Share price for SGX ended the week at $7.88.
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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