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Singapore Market: Fever Pitch

StockMarketBoardIt was a difficult week for Singapore stocks, with the Straits Times Index (SGX: ^STI) losing 0.6% after peaking on Monday. Meanwhile, elsewhere in Asia:


Weekly   Gain

Price-to-Earnings   (Mar. 1)*

Nikkei 225



Hang Seng Index (INDEX: ^HIS)



Shanghai Composite Index



BSE Sensex



*Based on normalized earnings per share. Source: S&P Capital IQ

Fever pitch

The second-biggest gainer in the Straits Times Index this week was telecom provider StarHub (SGX: CC3), which rose 2.7%. In a contest as competitive as any in the English Premier League, Sing Tel (SGX: Z74), denied on Tuesday that it is blocking StarHub’s negotiations for the rights to broadcast English Premier League football matches.

SingTel has already obtained non-exclusive rights to broadcast the matches for the next three seasons. Under the government’s topsy-turvy “cross-carriage rule”, content obtained under exclusive rights must now be shared across providers to avoid consumers having to purchase multiple subscriptions. However, the rule does not apply when the rights to broadcast the content are non-exclusive.

As such, SingTel is in an enviable competitive position for as long as StarHub is unable to conclude an agreement for this highly-prized content. Still, StarHub can console itself in that it trounced its rival in the stock market this week — SingTel shares were off by 2.5%.

It’s a technical matter

Meanwhile, the biggest loser on the week was Global Logistic Properties (SGX: MC0), which fell 5.6%. All of that drop (and more) occurred on Tuesday, when the shares were down 6.6% — their worst daily loss since Oct. 2011 — on news that the company’s largest shareholder had cut its stake from 49% to 37%. Singapore’s sovereign wealth fund, the Government of Singapore Investment Corp. (GIC) sold 595.7 million shares at $2.60 per share — the bottom of the $2.60 – $2.66 pricing range, and a 5.5% to Monday’s closing price.

There is no indication that GIC reduced its stake on fundamental concerns. In fact, in a statement, the investment fund said: “We are pleased with the company’s execution of its strategies and are confident of its long-term prospects.” As such, the decline appears to be purely technical (i.e. strictly related to the supply and demand of shares) and need not concern long-term, fundamentally-oriented investors. GLP’s shares have outperformed the index since their listing in October 2010 — then Singapore’s largest IPO ever — but they have trailed the market by more than 10 percentage points year-to-date.

Enjoy your weekend, Singapore Fools!

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.