The Singapore Market This Week: Golden Agri-Resources Ltd Takes the Lead

During the week, the local stock market barometer, the Straits Times Index  (SGX: ^STI), put on around 39 points, or 1.4%, to end Friday at 2,803. Of the 30 index stocks, 22 ended the week with gains, two were flat, while the rest clocked some losses.

The biggest winner in the index was palm oil producer Golden Agri-Resources Ltd (SGX: E5H). The company’s shares climbed by 5.6% to S$0.38. Around two weeks ago, the company posted its quarterly earnings for the three months ended 31 March 2016.

Revenue for the quarter slipped by 3.8% year-on-year to US$1.49 billion. But, Golden Agri-Resources’ core net profit ballooned by 65% to US$40 million, mainly on the back of growth in the company’s downstream business, which partially offset softer average crude palm oil prices.

On the other end of the spectrum, airline catering outfit SATS Ltd  (SGX: S58) was the biggest loser in the Straits Times Index with its shares losing more than 6% in value to end the week at S$4.18.

Interestingly, SATS’s shares had fallen despite the firm reporting on Monday that its profit for its fiscal year ended 31 March 2016 had grown by 13%. A higher dividend was also declared.

SATS is of the view that the “growth of tourism in the region as well as demand for safe, high quality food from the burgeoning urban populations of Asia are also creating new growth opportunities” for it. There are two megatrends here: Food demand in Asia is expected to more than double by 2020, to around US$3 trillion a year, while 66% of the global middle class population will be in Asia by 2030.

Two other firms operating in the same airline industry as SATS – Singapore Airlines Ltd (SGX: C6L) and SIA Engineering Company Ltd (SGX: S59) – were part of the 22 Straits Times Index components that clocked gains in the week. The two companies announced that they had bought back shares for the week.

SIA bought back 1.151 million shares for approximately S$12.2 million while SIA Engineering bought back 176,000 shares for around S$663,000.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of the Straits Times Index, is now valued at 11.6 times trailing earnings and has a dividend yield of 3.5%.

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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.