By ROBERT HALILI
THERE was a sharp rebound in the buying and a slowdown in the selling last week, based on filings from Dec 11 to 15 on the Singapore Exchange. A total of 21 firms recorded 48 director and substantial shareholder acquisitions worth $14.3 million, versus 12 companies with 19 disposals worth $5.2 million.
The numbers of firms and trades on the buying side were sharply up from the previous week's 15 companies and 22 acquisitions. Although the number of purchases was more than double the previous week's trades, the buy value of $14.3 million was sharply lower than the previous week's $31.8 million. The sales figures, on the other hand, were down from the previous week's 16 firms, 22 disposals and $128 million. There were several market-breaking trades on the local market. Acquisitions by Affinity Precision in First Engineering triggered a mandatory cash offer for all the issued and paid-up ordinary shares of the company. It will be interesting to see how the buy-out offer plays out as several fund managers who own substantial stakes will look to exit at a good price. There was also an initial filing by Moon Capital Master Fund Ltd in Roly International Holdings, a day after the company announced voluntary delisting of its shares last week. Raffles Education Corporation also hit the headlines this month, as the group made an aggressive move into the potentially lucrative mainland market with the acquisition of a 20.16 per cent stake in education management services provider Oriental Century. Aside from those three major events, there were several stocks that investors should watch out for in the near term. On the buying side, there were first-time buybacks and purchases by a director of Aspial Corporation. Another stock on our 'buy' alert is Want Want Holdings as the group resumed its buyback programme at higher than its purchase prices from 2000 to 2004.
On the fund managers' front, CIM Dividend Fund boosted its stake in Electrotech Investments by 6 per cent to 5.3 per cent last week. On the selling side, investors should trade with caution on Star Pharmaceutical, Federal International, and Sunningdale Tech, due to huge substantial shareholder sales.
The disposals in Star Pharmaceutical and Sunningdale Tech were triggered by sharp falls in their share prices, while the sale in Federal International was made on the back of a 41 per cent gain in the stock's price.
Aspial Corporation
There were first-time buybacks and a purchase by a director of jewellery manufacturer and residential property developer, Aspial Corporation, this month. The group repurchased 81,000 shares on Dec 7 and 8 at an average of 50.7 cents each. Those were the first purchases by the company since buybacks were introduced by SGX in 1999.
On the directors' side, non-executive director Tan Soo Lung acquired 30,000 shares on Dec 8 at 50.5 cents each, which increased his direct holdings to 3.1 million shares. Mr Tan had previously acquired 393,000 shares from Aug 31 to Nov 16 at 40 cents to 50.5 cents each, or an average of 42.2 cents each. He also bought 104,000 shares from 2003 to 2005 at an average of 31.5 cents each.
The fact that Mr Tan acquired more shares this quarter at higher than his previous acquisitions indicates that the stock is still undervalued at 51 cents each. Aside from the company and Mr Tan, CEO Koh Wee Seng bought 1.5 million shares from Jan 12 to Nov 24 at an average of 45 cents each, which boosted his direct holdings by 18 per cent - to 10.6 million shares or 9.1 per cent. Mr Koh also acquired 2.2 million shares from May to December 2005 at an average of 41.7 cents each. The counter closed at 51 cents on Friday.
Want Want Holdings
Snack food and beverage manufacturer and trader Want Want Holdings resumed its buyback programme at higher than its purchase prices from 2000 to 2004. The group repurchased 20,000 shares on Dec 15 at US$1.59 each. It previously acquired 2.3 million shares in April 2004 at US$1.08 each, and 1.6 million shares from 2000 to 2001 at around US$1.16 each.
The recent buyback was made a month after the company announced its 3Q results on Nov 14. Want Want Holdings posted a 35.2 per cent drop in net profit to US$17.40 million for the three months to Sept 30, 2006. Net profit for the first nine months, however, rose by 8.1 per cent to US$79.81 million. The counter closed slightly higher from the group's last buyback price at US$1.62 on Friday.
Electrotech Investments
CIM Dividend Income Fund became a substantial shareholder of outsourcing services & electronics manufacturing services provider Electrotech Investments on Dec 1, after the purchase of 900,000 shares at 48.8 cents each. The trade boosted its direct holdings by 6 per cent - to 16 million shares or 5.3 per cent.
The initial filing was significant as two top board members have also bought shares this year. The company's president Gooi Soon Hock acquired 500,000 shares from April 18 to Sept 11 at 59.5 cents to 45 cents each, which increased his deemed holdings to 100.5 million shares or 33 per cent. Non-executive chairman Larry Low Hock Peng, on the other hand, purchased 230,000 shares (direct and deemed interests) from Feb 24 to June 20 at 55 cents to 45 cents each. The trades increased his direct stake to 143,000 shares, and deemed holdings to 41 million shares or 13.5 per cent. The stock closed at 47 cents on Friday.
Star Pharmaceutical
Prudential Asset Management has lowered its stake in prescription drugs manufacturer and seller Star Pharmaceutical to below 5 per cent this month at sharply below its initial filing price in June. The group reported a disposal-related filing last Tuesday of 183,000 shares at an estimated price of 37 cents each, which reduced its direct holdings to 11.5 million shares or 4.9 per cent. The group previously reported an initial filing on June 22 of 228,000 shares at 48 cents each, which raised its interest to 5.01 per cent.
The purchase and sale by Prudential were the first trades by a director or substantial shareholder of Star Pharmaceutical since the stock was listed on Feb 15. The counter has been on the decline since August, falling from 49 cents to 36 cents on Friday.
Federal International
Fabulous Commercial Inc recorded its first sale in flowline control products and services firm Federal International since it became a substantial shareholder in July. The group sold 7.5 million shares last Tuesday at an estimated price of 70.5 cents each, which reduced its deemed holdings by 39 per cent - to 11.6 million shares or 5.1 per cent.
The disposal was made at a huge profit based on the initial 19.1 million shares or 8.6 per cent that the group acquired in July at 50 cents each. The stock has rebounded sharply since November, from 47 cents to 70 cents on Friday.
Sunningdale Tech
New Smith Opportunities Hedge Fund LP unloaded 38.2 million shares of precision plastic component supplier Sunningdale Tech last Friday at an estimated price of 28.5 cents each. The trade reduced its direct holdings by 70 per cent - to 16.7 million shares or 2.2 per cent. The disposal was made on the back of the 61 per cent drop in the share price since the hedge fund became a substantial shareholder in July last year, from 72.5 cents. The sale was also made near the stock's record low of 24 cents since its listing in October 2003.
The hedge fund acquired an initial 52.8 million shares or 7.2 per cent on July 15, 2005, via share conversion at an undisclosed price. Investors should note that director Ng Boon Hoo sold 3.7 million shares on Nov 27 at an estimated price of 30 cents each, which reduced his direct holdings by 51 per cent - to 3.6 million shares or 0.5 per cent. Mr Ng also has deemed interest of 131.6 million shares or 17.9 per cent.
Sunningdale Tech announced its 3Q results in November with net profit down by 29.3 per cent to $5.46 million for the three months to Sept 30, 2006. Earnings for the first nine months fell by 65.7 per cent to $7.63 million. The counter closed at 28.5 cents on Friday.
The writer is managing director, Asia Insider Ltd
