Three Shares That Beat the Market Today

It is now five consecutive days of gains for the Straits Times Index (SGX: ^STI) after it inched up by 0.1% to 3,256 points today. Within the index’s 30 blue chips, some 16 of them had managed to make some headway during the trading session while 11 others suffered losses.

SHC Capital Asia (SGX: 5UE) has jumped by 18.6% to S$0.255 after its trading halt was lifted at 8:30am this morning. The insurance services provider had requested for a trading halt last Thursday after which it announced a day later that it “has been in discussions” with a third-party regarding a potential sale of its entire stake in its wholly-owned subsidiary SHC Insurance Pte Ltd.

The potential-buyer is a “new entrant” into Singapore’s general insurance market and could be looking at the acquisition as a means of buying itself into the market. In any case, nothing’s definite about the potential deal yet as it’s subjected to regulatory and shareholder approvals and both parties have yet to pen down a legally-binding document regarding the deal.

Also, no price for the deal’s yet to be revealed but that hasn’t stopped the market from being excited about it. Interestingly, SHC Capital Asia has been providing most of its insurance services through SHC Insurance Pte Ltd so the deal could be seen as the former selling off most of its operating business activities.

High precision tools maker Micro-Mechanics (SGX: 5DD) rose 1.8% to S$0.57. The company revealed last week that it would be releasing its third quarter results on 26 April 2014. During Micro-Mechanics’ last-reported financials for the six months ended 31 Dec 2013, it had seen a 12.4% year-on-year increase in revenue to S$21.6 million while its profits actually jumped by almost two-thirds from S$2.16 million to S$3.52 million.

During the second quarter earnings announcement, the company commented that “[t]he Semiconductor Industry Association believes the global semiconductor industry is well-positioned for a strong start to the new year [referring to 2014]” and that “[i]ndustry watchers are also optimistic the industry will continue to show steady growth.” Given Micro-Mechanics’ strong bent toward serving the semiconductor industry with its tools, there are reasons for its shareholders to be optimistic about its upcoming earnings in light of the aforementioned comments.

Hafary Holdings (SGX: 5VS) is up next with its shares gaining 1.1% to S$0.187. The building materials importer, dealer, distributor, and wholesaler had revealed last Friday that it would be purchasing a lease-hold property (with 37 years left on the lease) located in China for RMB49.8 million (approximately S$10 million).

The property’s exact location is in the Gaoming District of Foshan in Guangzhou. Hafary Holdings intends to utilise the property as a central warehouse facility to store its inventory, instead of using Singapore-based warehouses, in order to save costs. The location of the property also makes its intended-use feasible given its proximity to Gaoming Port (roughly 10km) which the company can use to ship inventory at short notice.

Hafary Holdings would be funding the purchase with borrowed funds from banks, and that is where investors might want to keep an eye out on the company’s finances given that it had only S$5.3 million in cash while carrying S$48.7 million in total debt based on its latest finances as of 31 Dec 2013.

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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.