It was a mixed day for the Asian bourses as Japan’s Nikkei 225 Index closed 0.2% higher at 13,424 points, while Hong Kong’s Hang Seng index dipped 0.7% to 21,818 points. Back home in Singapore, the Straits Times Index (SGX: ^STI) continued its losing streak, which started on last Thursday, by sliding 0.6% to 3,109. A losing streak’s seldom welcome (except for bargain hunters, of course!) but today’s south-ward trek by the index is mild compared to some of the big movers of the day. Let’s take…
Back home in Singapore, the Straits Times Index (SGX: ^STI) continued its losing streak, which started on last Thursday, by sliding 0.6% to 3,109. A losing streak’s seldom welcome (except for bargain hunters, of course!) but today’s south-ward trek by the index is mild compared to some of the big movers of the day. Let’s take a look at them.
Straco (SGX: S85) slipped by 5.9% to S$0.32. The company is the owner and operator of marine theme parks and cable car services in China and can be regarded as a play on the tourism sector in the country. It released its second quarter results two weeks ago and reported healthy double digit growth in both sales and profit. For the first six months of 2013, Straco’s sales increased by 21% year-on-year to S$27.7m while profit jumped 71% to S$13.7m.
In the earnings release, Straco’s management stated that they’ve been seeing positive policies from the Chinese government in terms of boosting both international as well as domestic tourism growth, which augurs well for the company.
ISDN Holdings (SGX: I07) jumped 6.8% today to S$1.25. The company, which provides precision engineering and industrial computing solutions, had a busy time last week. It had made two important announcements in addition to releasing its second quarter results.
For the announcements, the company revealed that it had acquired a majority stake in PT Charma Paluta Energy in Indonesia to develop a mini hydropower plant in North Sumatra, Indonesia. The power plant is estimated to cost US$10m to build and would bring in roughly US$2m per year in revenue.
The next announcement revealed that ISDN had clinched a deal to develop a coal-fired power plant in Myanmar in a joint venture with Myanmar-based Tun Thwin Mining Co. Ltd. ISDN would own 65% of the JV, whose power facility is expected to have a generating capacity of 540 MW after completion.
While there had been two pieces of news signalling positive development in ISDN, its earnings results gave out a different signal. Despite revenue growing 13% year-on-year to S$82m for the first six months of the year, profit had dropped by a third to S$3.5m.
Sri Trang (SGX: NC2) was at one point down by 4.3% to S$0.56 before making a very steep ascent to close the day at S$0.595 for a 1.7% gain. The fully integrated natural rubber company has very strong links with Thailand (the bulk of its business is dealt in Thai baht), a country which recently entered a recession and saw its currency drop to a one-year low yesterday.
Sri Trang’s see-saw price-movement might make it seem that investors were initially worried about its links with Thailand, but then decided that those worries were unfounded and shrugged it off. That would have been the ideal narrative if not for the fact that short-term price movements are seldom that ‘explainable.’ Instead of fretting over the price movement, it might be better for investors to look hard at its rubber business and determine its resiliency to recessions.
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