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Three Shares That Lost to the Market Today

With today’s 0.6% gain to 3,162 points, the Straits Times Index (SGX: ^STI) is slowly regaining the ground it lost in February and is now just 5 points below its closing level at the end of 2013.

Within the index’s 30 shares, 17 finished the trading session in the green to help prop up Singapore’s market barometer. Seven others weren’t so lucky however, as they had made losses.

In any case, there was no shortage of shares that had lost to the market today. Let’s take a look at some of them.

United Engineers (SGX: U04) dropped 2.4% to S$2.05. The engineering, construction, and integrated property services outfit has seen its shares on a tear recently, jumping some 14.5% to its current price from its 3 March 2014 close at S$1.79.

On Monday, United Engineers revealed that it had been approached by potential buyers who are interested in acquiring the shares of the company’s subsidiary, UE E&C (SGX: NI3), though nothing’s certain yet. United Engineers are in “ongoing discussions with a third party” and the company would be making the relevant disclosures as and when appropriate.

No-frills carrier Tigerair (SGX: J7X) closed at S$0.405 to sit on a 1.2% loss. The company announced on Monday that it had signed a new deal to renew and expand its fleet of aircrafts.

Under Tigerair’s agreement with Airbus and Pratt & Whitney, the carrier would be ordering 37 Airbus A320neo aircraft with an option to increase the order by an additional 13 planes and convert the A320neo aircrafts into a larger model, the A321neo. Tigerair’s new aircrafts are scheduled to be delivered between 2018 and 2025.

The value of the deal’s pegged at US$3.8 billion, though Tigerair had managed to negotiate a “significantly lower” price. The new aircrafts are more fuel efficient and could save Tigerair an estimated S$40 million annually based on the company’s current fuel-related spending.

Tigerair previously had an existing order for nine Airbus A320 aircrafts, scheduled for delivery in 2014 and 2015, that was entered in 2007 but it has since been cancelled in light of its new orders.

Vallianz Holdings (SGX: 545) rounds up the trio with its shares finishing flat at S$0.145. The ship charterer and owner revealed on Tuesday that it had just priced S$100 million worth of notes (i.e. debt) which it expects to be issued on 1 April 2014.

The debt instrument carries an annual interest rate of 7.2% and would mature 2 years from the date of issue. Vallianz has the intention to use the borrowed funds for general corporate needs which include the refinancing of existing borrowings and the financing of investments and capital expenditures, among others.

Prior to the afore-mentioned new debt issue, the company’s latest balance sheet shows it having US$69 million worth of total debt while having only US$1.9 million in cash and short-term investments. The addition of S$100 million in new debt might warrant a closer look from investors to ensure the company’s not overextending its own finances.

In addition, Vallianz’s annual operating income in 2013 stood at only US$11.3 million (around S$14.2 million). That’s only twice the figure of the company’s interest expenses of S$7.2 million for the new debt issue. This might lead to Vallianz’s bottom-line being hampered over the next two years if its business does not grow rapidly.

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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.