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The Singapore Market this Week: Hutchison Port Holdings Trust Leads the Pack Down

Photo credit: Rafael Matsunaga. Licence: http://creativecommons.org/licenses/by/2.0/

Port operator, Hutchison Port Hldg Trust (SGX: NS8U), was the biggest loser in the Straits Times Index (SGX: ^STI) as it tumbled 5.6% to end Friday at US$0.425. Other than the business trust, 18 other STI components were in the red for the week.

On the other hand, nine companies were in the positive territory, and two ended the week flat. The biggest winner of the lot was shipbuilder, Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6).

All-in-all, the STI pared 0.8% to 3251.99 points. This translates to a fall of 27.73 points, as compared to last week’s close of 3,279.72 points.

In July, Hutchison Port released its earnings for the second quarter of 2017. Its performance was weak as revenue declined 1.5% year-on-year to HK$2.89 billion while net profit tumbled 21.5% to HK$269.1 million. The business trust cut distributions by 32%.

Earlier this month, Yangzijiang Shipbuilding announced its financial results for the second quarter of 2017. Its fortunes were better than Hutchison Port’s.

For the quarter, revenue increased by 27% year-on-year to RMB3.8 billion, due to improvements in its shipbuilding related segment and investment segment. Meanwhile, net profit surged 73% to RMB719.9 million.

The firm summarised the reasons for the stellar performance during the quarter and gave its thoughts for the financial year:

“Yangzijiang’s steady performance in a volatile market is attributable to its persistent efforts in building up core capabilities in shipbuilding, its achievements in innovation and introducing new vessel products, and its established management structure and use of technology that constantly improve its operational efficiency. In view of its robust financial position, stringent risk management, strong delivery track record, the reputation as a leading shipbuilder in the world, Yangzijiang commands a favourable position in a recovering market, and the Board remains confident of the Group’s stable operation and performance for financial year 2017.”

Out of the blue-chip universe, shares of telecommunications outfit, M1 Ltd (SGX: B2F), surged 5.2% to S$1.805.

The second quarter of 2017 saw the firm’s bottom line cut by 20.8% to S$32.5 million. This led to a 25.7% reduction in its interim dividend.

To make matters worse, M1’s majority shareholders – Keppel Corporation Limited (SGX: BN4), Singapore Press Holdings Limited (SGX: T39), and Axiata Group Berhad (KLSE: 6888.KL) – decided not to proceed further with a prospective sale of their respective stakes in M1. You can read more about it here.

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of the Straits Times Index, is now valued at 11.5 times trailing earnings and has a dividend yield of 3.07%.

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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.