Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis. The Straits Times Index (SGX: ^STI) has slipped by 0.1% to 3,354 points with 19 of its constituents ending the trading session with losses. Only 5 other blue chips managed to clock some gains. Let’s take a look at some shares that beat the market today. Oversea-Chinese Banking Corporation Ltd (SGX: O39) is up 1.5% to S$9.91. Yesterday, the bank announced that it has successfully attained control…
Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis.
The Straits Times Index (SGX: ^STI) has slipped by 0.1% to 3,354 points with 19 of its constituents ending the trading session with losses. Only 5 other blue chips managed to clock some gains.
Let’s take a look at some shares that beat the market today.
Oversea-Chinese Banking Corporation Ltd (SGX: O39) is up 1.5% to S$9.91. Yesterday, the bank announced that it has successfully attained control of 97.5% of Hong Kong-based Wing Hang Bank. News of OCBC’s acquisition of Wing Hang first broke through in January this year but it was not till April when the former confirmed that it would be submitting a bid of HK$125 per share for the latter.
Under terms of that deal, OCBC needed to have control of more than 90% of Wing Hang by today in order to take it private. But, a twist to the acquisition appeared earlier this month in the form of hedge fund Elliot Capital Advisors, which is run by billionaire Paul Singer. At one point, Elliot owned up to 7.8% of Wing Hang, thus putting OCBC’s 90%-threshold at risk if the hedge fund would continue to gobble up shares of the Hong Kong bank.
But as it turns out, OCBC eventually triumphed and Wing Hang’s shares are now suspended from trading in the Hong Kong stock exchange. The latter would be delisted shortly after OCBC compulsorily purchases the remaining 2.5% of Wing Hang that it does not yet own.
At HK$125 per share, OCBC’s paying 1.77 times Wing Hang’s book value. Time would tell if OCBC had made a smart acquisition but at the very least, Wing Hang has been a rather well-run bank and has managed to grow its book value per share (a very important measure of economic value for banks) at a reasonable pace of 12% annually from 2003 to 2013.
Shipping port owner Hutchison Port Holdings Trust (SGX: NS8U) had remained flat at US$0.745. The business trust had released its financial results for the first half of 2014 last Friday.
For the six months ended 30 June 2014, Hutchison Port Holdings Trust saw revenue inch up by 1.9% to HK$6.01 billion while profit jumped by 15.8% to HK$927 million. Part of the top-line growth had been due to a 6% increase in throughput for Hutchison Port Holdings Trust’s deep-water ports.
With growth in US and Europe being a “major factor in determining the total volume of containers handled by [the trust]”, investors might be pleased to know that the trust noted a “favourable” consensus outlook for growth in both regions in 2014.
Specialty rubber chemicals producer China Sunsine Chemical Holdings (SGX: CH8) is up 5.1% to S$0.31 following a “positive profit alert” it released yesterday. In the memo, the company pointed out that it “is expected to report a substantial increase in consolidated net profit” for the first half of 2014 compared to a year ago.
The company mentioned that the profit growth is coming from two factors: An increase in the average selling price of its products and a jump in sales volume. China Sunsine Chemical Holdings, which conducts its business predominantly in China, had been able to profit from the country’s government’s recent emphasis on environmental protection. Many other players in the rubber chemicals industry had failed to meet the new environmental regulations, thus opening up a dearth in supply in which China Sunsine Chemical Holdings has gladly filled.
The company would be releasing its actual results on 7 August 2014, so investors can get a better idea of how big its profit jump actually is.
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