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 managed to end the week on a high note with a 0.6% gain to 3,315 points. Only six of its 30 constituents had clocked losses while 20 others had made some headway. With winners in abundant supply within the STI today, let’s take a look at a few shares which did better than the index. Real estate developer City…
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 managed to end the week on a high note with a 0.6% gain to 3,315 points. Only six of its 30 constituents had clocked losses while 20 others had made some headway.
With winners in abundant supply within the STI today, let’s take a look at a few shares which did better than the index.
Real estate developer City Developments Limited (SGX: C09) has climbed by 2.3% to S$10.00 after the release of its second quarter results yesterday. Despite seeing its profit for the first half of the year drop by 25% to S$258 million compared to a year ago, a look beneath the hood reveals that things aren’t as bad as it seems.
My colleague Stanley Lim explains:
“But, the drop in net profit had occurred because the company had recognised a huge one-off gain from the sale of certain assets in 2013. If the non-recurring gains were stripped off from its profit figure, we’re left with City Developments’ core earnings – and that figure had actually increased by 37.3% year-on-year.”
Olam International Ltd (SGX: O32) is next in line with its shares up 1.6% to S$2.54. The commodities trader revealed yesterday that its latest full-year results for the 12 months ended 30 June 2014 would be released on 29 August 2014. That’s exactly two weeks later.
In the company’s third quarter earnings, its profit picture for the nine months ended 31 March 2014 wasn’t fantastic as its operational PATMI (Profits after tax and minority interests) had fallen by 8% to S$277 million compared to a year ago. So, let’s see if the full-year results would be better.
In any case, Olam has been dialling back its capital expenditures and simplifying its business structure in order to produce positive free cash flow. Its upcoming earnings release would also be a good report on the progress on this front.
Thai Beverage Public Company Limited (SGX: Y92) rounds up the trio with a 1.6% gain to S$0.635 following the release of its first-half earnings yesterday evening. For the six months ended 30 June 2014, Thai Bev’s revenue had grown by 6.7% to THB81.1 billion compared to the prior year. Its profit meanwhile, jumped by 37.2% to THB11.5 billion.
The company’s revenue growth had been broad-based, driven by an increase in revenue in its spirits business (11.4%), beer business (7.0%), and food business (6.1%). These had helped to more than offset a 16.4% decline in its non-alcoholic beverages business. It’s important to note that spirits and beer are two of Thai Bev’s most important businesses and they collectively accounted for 86% of the company’s overall revenue in the first half of 2014.
Thai Bev had shown improvement in its cost efficiency as its gross profit grew by 13.9% to THB24.0 billion. That improvement flowed through and ultimately resulted in the 37.2% increase in profit.
Thailand’s political situation became unstable back in November 2013 and was finally resolved when the country’s military organised a coup and assumed leadership of the country in May 2014. For investors in Thailand-based companies, that episode might have been a little stressful. But as Thai Bev noted in its earnings release, things are steadily improving in the country:
“Thailand’s overall economy in the second quarter of 2014 has picked up from the previous quarter. The improvement in the political situation and greater clarity on the government’s policies have [sic] helped restore confidence among consumers and the private sector. The Consumer Confidence Index in the second quarter stood at 61.2 points, an increase from 59.9 points in the first quarter. While the tourism sector contracted in comparison to the same period last year as several countries raised travel advisories on Thailand, the lifting of a nationwide curfew on June 13, 2014 boosted the sector at the end of the quarter.”
To keep up to date on the latest financial and stock news, sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead. Also, like us on Facebook to follow our latest hot articles.
The Motley Fool's purpose is to help the world invest, better.
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.