It was a sea of red in the Singapore’s stock market as the Straits Times Index (SGX: ^STI) slipped 0.5% to 3,165 points. Losers outnumbered winners in the benchmark with 21 of the 30 constituents ending the day under water.
While the blue-chips have had a poor showing, there were a number of bright spots outside the index.
Del Monte Pacific Limited (SGX: D03) gained 5% to S$0.95. Last Friday, the vegetable and fruits processor announced its intentions to acquire the consumer food business of US-based Del Monte Foods in a US$1.6b deal, financed through a mixture of equity and debt.
According to Del Monte Pacific, the purchase will help “unlock meaningful synergies” and increase the scale and reach of its business.
The market seems pleased given that its shares have jumped almost 16% following the announcement.
However, there are risks to be aware of with the transaction. Assuming the acquisition was completed by 31 Dec 2012, Del Monte Pacific’s financials for the 12 months prior to that date show a marked increase in its debt-levels, as exemplified by its gearing growing from 0.46 to 4.1.
Medi-Flex (SGX: 5FF) was up by 14% to S$0.148. The natural rubber and nitrile glove manufacturer’s full-year results, released last Friday evening, saw a 19% year-on-year increase in annual revenue from RM169m to RM201m. Meanwhile, its profits jumped 133% to RM25m from RM11m a year ago.
The strong results might have been enough to send the shares soaring on its own. But the main driver for share price jump was news that the company will be taken private in a voluntary delisting.
Top Glove Corporation Berhad, a Malaysian-listed rubber glove manufacturer and majority shareholder of Medi-Flex with a near 80% stake is offering S$0.15 per share in cash for shares that it does not already own in the Singapore-listed glove maker.
Sysma Holdings (SGX: 5UO) climbed 4.5% to S$0.35. The company recently announced the establishment of a joint venture with Encore Investment. The JV, named as Sysma Energy Pte. Ltd will be “engaged in the business of manufacturing and trading of refined petroleum products and the provision of services related to this sector.”
Sin Soon Teng, chief executive of Sysma Holdings, views the JV as a vehicle to “enable [the company] to diversify its earnings base and not to be too reliant on the construction and property development sector.”
Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.
The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.