Thai Beverage Public Company Limited Leads the Market Higher this Week


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.

This week, the Singapore market bellwether, the Straits Times Index (SGX: ^STI), added some 11 points to end at 3,326 points.

The index, which consists of 30 shares, saw 16 of them finish the week positively. The largest gainer was Thai Beverage Public Company Limited (SGX: Y92). It surged 6.3% to S$0.675.

Bloomberg reported a few days ago that the Chairman of the beverage outfit, Mr. Charoen Sirivadhanabhakdi, might be looking at acquiring shares of United Engineers Limited (SGX: U04) through three of the company’s major shareholders – Oversea-Chinese Banking Corp. Limited (SGX: O39), Great Eastern Holding Limited (SGX: G07), and the Lee Foundation. OCBC and Great Eastern have since confirmed that “they’ve been approached by a party” regarding a possible sale of their shares of United Engineers, but the identity of the other potential buyer’s not revealed yet.

Elsewhere in the STI, 14 of its components were in the doghouse with Golden Agri-Resources Ltd (SGX: E5H) in ‘pole position’ with a 4.7% decline to S$0.51.

Last week, the commodity firm released its earnings for the first half of 2014. Sales went up by 27% year-on-year to US$4 billion due to higher production, sales volume, and better international crude palm oil prices. Crude palm oil prices increased from US$795 per tonne in the corresponding period  a year ago to US$853 per tonne.

However, GAR’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) was 6% lower at US$331 million due to lower contribution from its downstream businesses of palm and lauric and oilseed.

Mr Franky Widjaja, Chairman and Chief Executive Officer of Golden Agri, commented on GAR’s future plans:

“We are of the view that industry outlook remains positive in the longer term. Palm oil is the most efficient and cost-effective source of vegetable oil and is highly versatile in its application. GAR continues to expand its vertically integrated operations. Recently, we announced our intention to establish joint venture with Louis Dreyfus Armateurs Group in Indonesia-based shipping and logistics business. We are also in the process of forming a joint venture with CEPSA Química, S.A. to enter the fatty alcohol business. These strategic partnerships are further steps towards value creation, strengthening global position and ultimately generating greater return to our shareholders.”

The STI is currently valued at 13.9 times its historical earnings.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.