Singapore’s Big Loser of the Week: Boustead Singapore Limited

For the holiday-shortened week, Boustead Singapore Limited (SGX: F9D) fell 4.7% to end on Thursday at S$1.415. In comparison, the Straits Times Index (SGX: ^STI) declined 0.7%, which makes Boustead a big loser in the share market this week.

Towards the end of last year, Boustead Singapore announced that its real-estate division, which goes by the name of “Boustead Projects”, will be demerged and listed on the Singapore Exchange by a way of introduction. This is unlike an initial public offering, where shares are offered to the public to be bought at a certain price.

21 April was the last day that Boustead Singapore traded as a whole before the real-estate division was to be hived off.  Shareholders who held 10 shares of Boustead Singapore received 3 Boustead Project shares, representing 49% of the Boustead Projects. The rest of Boustead Projects, at 51%, is still held by Boustead Singapore.

On 21 April, shares of Boustead Singapore stood at S$1.75 a piece. The next day, when the company traded ex-entitlement, they were S$1.49.

The real estate division, Boustead Proj (SGX: AVM), started trading on Thursday, 30 April at 9am. Mr Thomas Chu, Managing Director of Boustead Projects said, “Boustead Projects’ share price opened on our first trading day at 88 cents, an auspicious number in Chinese. We hope this is symbolic of times to come.

Following the demerger, Boustead Singapore has a historical earnings per share of 10.43 Singapore cents. This translates to a price-to-earnings ratio of 13.6. Boustead Projects, on the other hand, is valued at 9.3 times 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 owns shares in Boustead Singapore and Boustead Projects.