Singapore’s stock market is starting the week on a good note as the Straits Times Index (SGX: ^STI) climbed 0.9% to 3,056 points today despite continuing troubles for some of our regional neighbours. For example, Indonesia’s stock market, represented by the Jakarta Composite Index fell by 2.2% to 4,101 points after the country posted a trade deficit of US$2.3b for July, the biggest deficit since at least 2007. It’s not been an easy time for the country as it has lately faced the confluence of a record high current-account deficit, a falling currency, rising inflation, and a declining…
Singapore’s stock market is starting the week on a good note as the Straits Times Index (SGX: ^STI) climbed 0.9% to 3,056 points today despite continuing troubles for some of our regional neighbours.
For example, Indonesia’s stock market, represented by the Jakarta Composite Index fell by 2.2% to 4,101 points after the country posted a trade deficit of US$2.3b for July, the biggest deficit since at least 2007. It’s not been an easy time for the country as it has lately faced the confluence of a record high current-account deficit, a falling currency, rising inflation, and a declining stock market.
The economic troubles in Indonesia are also one of the main reasons why Jardine Cycle & Carriage (SGX: C07), a blue-chip component of the STI, has fallen by close to 20% to today’s close of S$34.22 in just one month. Jardine C&C has a large exposure to Indonesia as it owns 50% of Astra, a huge conglomerate with substantial operations in the country.
While the STI’s 30 components had a relatively good day with 17 of them ending the day in the green, most of the action concerning market-beating shares had occurred outside the index. Let’s take a look at some of them.
Chinese firm China Minzhong Food Corporation (SGX: K2N) was the biggest winner in the market today with a 112.3% jump to S$1.13. Indonesia’s Indofood Sukses Makmur Tbk has launched a mandatory offer to take the company private at S$1.12 per share.
It was just last Monday when China Minzhong was caught in the gunsights of short-seller Glaucus Research, which alleged that the company, an integrated vegetable processing firm, had “deceived regulators and investors about the scale of its business and its financial performance.” China Minzhong’s shares fell by close to half on the day itself from S$1.01 to S$0.53 before it requested for a trading halt (the halt was lifted at 3:30pm today).
The company released a report on Sunday, strongly refuting Glaucus’ allegations.
Indofood had previously owned just slightly less than 30% of China Minzhong. But, the former announced today that it had snapped up 25.59m of the latter’s shares, bringing its total ownership stake to 33.49%.
According to Singapore’s laws, any single shareholder whose ownership stake increases to 30% of a company is required to make a mandatory takeover offer, which is what Indofood has done.
Fashion retailer Ossia International (SGX: O08) continues its stupendous ascent last week with a 17.9% gain to close at S$0.56 for the day. The company’s shares traded at only S$0.20 on last Tuesday, so investors have been treated to a total gain of 180% in just four trading days.
There have been no new material developments within the company and Ossia’s board of directors released a statement last Friday to highlight that fact. In addition, the directors have reminded shareholders and investors of the company to “exercise caution when dealing in shares in the [c]ompany.”
It’s a good reminder from Ossia, given that the share price of any company can, at any given time, be far removed from its underlying intrinsic worth. As such, investors wanting to invest in any company should have a good grasp of its intrinsic value.
Returning to a component of the STI, we have commodities farmer Olam (SGX: O32) rounding up the trio. Shares of the company are up 2.4% to S$1.47.
Olam released its full-year results last week which saw it post a 21.7% increase in annual revenue to S$20.8b while profits dipped 2.2% to S$363m. The company’s CEO Sunny Verghese, remains somewhat pleased as he commented that “underlying performance in most segments [of Olam] was robust overall, reflecting the strength of [the company’s] business model and diversification in the sources of earnings across [its] platforms and geographies.”
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