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. It’s been a great day for the Straits Times Index (SGX: ^STI) as 23 of its 30 constituents had managed to clock gains for the day. The aggregate movements of the blue chips resulted in Singapore’s market barometer climbing by 1.01% to 3,259 points. Let’s take a closer look at a couple of market beaters both within and outside the index. Logistics facilities provider Global Logistic Properties Ltd…
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.
It’s been a great day for the Straits Times Index (SGX: ^STI) as 23 of its 30 constituents had managed to clock gains for the day. The aggregate movements of the blue chips resulted in Singapore’s market barometer climbing by 1.01% to 3,259 points.
Let’s take a closer look at a couple of market beaters both within and outside the index.
Logistics facilities provider Global Logistic Properties Ltd (SGX: MC0), which is a part of the STI, has moved up by 1.48% to S$2.74. Yesterday, the company revealed that it has inked a new strategic partnership agreement with China Development Bank’s equity investment and asset management arm, China Development Bank Capital Limited (CDB Capital).
China Development Bank happens to be “the largest and most influential developmental financial institution in China and [is] the country’s primary financial institution for promoting infrastructure development and urbanisation.” GLP’s new strategic partnership with China Development Bank comes after CDB Capital had completed the second tranche of investment in GLP’s China operations back in 24 September 2014. The investment is part of a February 2014 agreement which GLP had entered into with a group of Chinese state-owned enterprises and financial institutions; the agreement was for the Chinese consortium to invest up to US$2.5 billion in GLP.
Coming back to the new strategic partnership, Ming Z. Mei, Chief Executive of GLP, said that CDP Capital would improve the land sourcing capabilities of GLP. This would help the company “drive value creation” as it ramps up growth in China.
There seems to be a great opportunity for GLP to expand its business in China given that modern logistics facilities (the bread and butter of GLP) is still relatively scarce in the country. According to Fan Hai Bin, President of CDB Capital, “Logistics infrastructure is a policy priority for the Chinese government, with domestic consumption expected to be the [Chinese] economy’s main growth driver going forward.” He added that “GLP’s unrivalled expertise in logistics network planning, development and management of modern facilities provides an ideal platform to enable this growth.”
Elsewhere, Loyz Energy Ltd (SGX: 594) has jumped by 8.81% to S$0.21. Just yesterday, The Straits Times had published an article about the oil & gas exploration and production company and gave some exciting updates about its business:
“Loyz Energy is banking on its first oil production project in Thailand to deliver profit of US$19.2 million (S$24.5 million) annually over the next three to five years… In three to five years’ time, the area is expected to produce 8,000 barrels per day, up from the 4,400 now.”
Shortly after the article was published, Loyz Energy asked for a trading halt (the halt has been lifted since yesterday night) and subsequently made certain clarifications regarding The Straits Times’ article. According to Loyz Energy’s board of directors, the figures given in the excerpt above are “only internal management targets” and “do not represent growth or profit forecasts nor are they statements of facts.”
Nonetheless, the market’s still excited about it, given the company’s price jump. There’s some good reason for the optimism. The company has delivered losses in each of its last three completed financial years (a total of S$13.4 million in losses); it would represent a major improvement for Loyz Energy if it does manage to produce any profit figures which are close to what The Straits Times had written about.
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