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The Four Most Hated Stocks in the Straits Times Index

Singapore’s stock market barometer, the Straits Times Index (SGX: ^STI), has slid by slightly more than 6% to 2,972 points since it last closed at 3,167 at the end of Dec 2013. That’s not a very nice drop to see since we’re only slightly more than a month into 2014.

But for shareholders of Noble Group (SGX: N21), CapitaMalls Asia (SGX: JS8), SembCorp Marine (SGX: S51), and Oversea-Chinese Banking Corporation (SGX: O39), a 6% decline from 31 Dec 2013 would be a relatively welcome sight given how they’ve shed more than 10% of their market value since.

Company 31 Dec 2013 Today % Change
Noble Group S$1.07 S$0.93 -13.1%
CapitaMalls Asia S$1.96 S$1.715 -12.5%
SembCorp Marine S$4.45 S$3.96 -11.0%
OCBC S$10.20 S$9.16 -10.2%
Straits Times Index 3,167 2,972 -6.1%

Source: S&P Capital IQ

Over the past nine months ended 30 Sep 2013, Noble has seen its profits get slashed by some 67% year-on-year to US$127m despite its revenue climbing 5% to US$73.5b. The huge drop in the company’s profitability came mainly as a result of its share of a non-cash loss that came up to US$103m that was made by its Australia-listed coal mining subsidiary, Yancoal.

Meanwhile, marine engineering firm SembCorp Marine and retail mall owner CapitaMalls Asia have both had a better time in the first nine months of 2013. The former saw a 38% year-on-year increase in revenue to S$3.83b while profits only inched down by 1% to S$370m. With the latter, its top-line came in at S$1.55b, a 19% jump compared to a year ago, while its profits were 6% higher at S$384m.

Investors would know soon if SembCorp Marine and CapitaMalls Asia had been able to do even better in the fourth quarter of 2013 when the companies releases its full-year results on 24 Feb and 13 Feb respectively.

OCBC joins Noble Group in posting rather unimpressive figures as its profits for the nine months ended 30 Sep 2013 dropped 38% year-on-year to S$2.05b. But, the main reason for the big decline in profits is because of a one-off S$1.17b gain that the bank had logged in the corresponding period in 2012 stemming from the sale of an Australian property and its shares in F&N and APB. The bank would be releasing its fourth quarter results soon on 14 Feb.

In any case, the OCBC’s recent share price decline could perhaps be traced to jitters over its potential acquisition of Hong Kong-based Wing Hang Bank. Bloomberg reported a few weeks back that Wing Hang’s looking to sell its shares around 1.9 times its book value, which is pricey when compared to OCBC’s own price-to-book multiple of only 1.4. Currently, OCBC and Wing Hang are in exclusive talks with each other over the deal, with the exclusivity period ending on 3 March 2014.

My colleague Stanley Lim wrote recently that “Often in investing, we do not get outsized returns from following what everyone is investing in…It’s more likely the case where our greatest opportunity would arise when there is great fear in the markets.”

Looking at the table above, it wouldn’t be a stretch to say that those four shares are the most hated and feared ones in the index at the moment. As a result – and this is by no means a recommendation of any sorts – those shares might be a starting point where a contrarian investor could be looking for opportunities.

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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 writer Chong Ser Jing doesn’t own shares in any companies mentioned.