Three Shares That Lost To the Market Today

Despite 22 out of its 30 constituents making losses today, the Straits Times Index (SGX: ^STI) only suffered a relatively small decline of 0.3% to 3,074 points. There were only five blue chips that managed to log gains during the trading session, but two in particular had jumped strongly to help pull up the index; Jardine Cycle & Carriage (SGX: C07) had increased by 9.2% to S$42.69 while Olam International (SGX: O32) had spiked by 11.8% to S$2.23.

With regard to Olam, it had announced earlier today that a consortium of its investors is looking to acquire the company’s shares from minority shareholders at a price of S$2.23 each.

Coming back to shares that had lost to the market, let’s take a look at three in particular.

Logistics services provider Vibrant Group (SGX: F01) slipped 1% to S$0.103. The company released its third quarter results yesterday and for the nine months ended 31 Jan 2014, saw some steady growth. Both its top- and bottom-line grew by 6.5% year-on-year to S$138 million and S$24 million respectively.

The completion of a new chemical hub in Jurong Island, Singapore, had boosted demand for the company’s freight and logistics business, hence driving the improvement in revenue and profit that it had experienced.

Ho Bee Land (SGX: H13) dropped slightly by 0.9% to S$2.11. The real estate developer had recently announced a deal to purchase a freehold property in London, England from Nomura Properties Plc.

Ho Bee Land would be paying £171 million for the property (approximately S$361 million), which is known as 1 St Martin’s Le Grand. The property’s situated within a region that’s popular with huge international financial institutions like Goldman Sachs, Schroders, and Lloyds, among others, and is also within “close proximity” to a pair of London’s rail transport stations.

1 St Martin’s Le Grand, which had undergone refurbishments in 2007 and 2011, currently houses 5 tenants that have signed “very good covenants” and whose leases expire after 12 years on average. Annual rent at the property comes up to £9.9 million, translating into a net rental yield of 5.5% at Ho Bee Land’s purchase price. The company’s eventual yields on the property would also improve when rental reviews take place in 2019, which would see a fixed uplift on over 50% of the property’s passing income.

All told, the deal is “part and parcel of [Ho Bee Land’s] continuing diversification overseas in times when the local market is facing very strong headwinds with limited investment opportunities,” according to Chua Thian Poh, chairman and chief executive of Ho Bee Land.

Hutchison Port Holdings Trust (SGX: NS8U) dips 0.8% to S$0.63. The container port operator revealed yesterday that it had entered into strategic partnerships with COSCO Pacific Limited and China Shipping Terminal Development (Hong Kong) Company Limited (CSTD).

The partnership would see COSCO and CSTD invest a collective HK$2.472 billion (approximately S$403 million) into HPH Trust’s wholly-owned subsidiary, Asia Container Terminal Holdings. The investments would see the former gain a 40% stake in the equity and loan interests of Asia Container Terminal while the latter would be given a 20% stake.

Asia Container Terminal owns and operates Container Terminal 8 West. The port is located at Kwai Chung, Hong Kong, just adjacent to HPH Trust’s existing container terminals in Hong Kong.

The leaders of the three newly-minted partners are all very positive about the collaboration. This is what Gerry Yim, chief executive of HPH Trust, has to say about the partnership: “This collaboration with COSCO Pacific and CSTD is a significant milestone achievement for HPH Trust that bodes well for the future of [Asia Container Terminal], which handled over one million TEU in 2013. This will enhance the city’s competitiveness and bolster all aspects of port operations including flexibility, efficiencies, synergies, and profitability.”

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