Volume Movers: 8 stocks that moved the Singapore market in October
Global stocks price levels ascended higher for the past 1 month since end September 2017. In the local Singapore market, some stocks have recorded higher than usual volume turnover. World economies are showing positive economic data coupled with stable inflation figures. STI index has recovered strongly since the start of the year 2017 and bullish momentum continues as the index charts new highs as a result of improving company earnings and fundamentals. We zoom into the top volume stocks for the past month to give investors a snapshot of some stocks that warrants closer attention.
Keppel Corporation, a rig building powerhouse, had seen its traded share volumes traded share volumes double on October 20 coupled with a 4% increase in stock prices. Keppel Corporation registered a 30% increase in net profit in Q3 2017 compared to Q3 2016. The bulk of the earnings (almost 68%) is contributed from its property segment. Its offshore and marine division recorded lower turnover as a result of industry-wide oil and gas downturn. Keppel Corporation has a well-diversified earnings base which may propel its future growth in a balanced forward path. Its asset management business has shown solid growth and will remain its key focus for future earnings contribution.
Rowsley has been consistent feature as one of the top 20 stocks with the highest volume traded for SGX. Healthcare stocks has been in the limelight since the dual listing of IHH healthcare and Rowsley – controlled by billionaire Peter Lim (pictured above) – announced plans to sell hospital operators Thomson Medical and TMC Life Sciences in exchange for Rowsley shares back in July 2017. This will make Rowsley a healthcare stock with hospital assets post acquisition. The stock volume surged in recent months due to the planned acquisition which will breathe new life into the stock with a business model centering medical and healthcare. Detailed financials for the target companies are still scant and pending further disclosures. IHH Healthcare and Raffles Medical, its closest peer should the acquisition goes through are trading at premium valuations with P/E multiples between the 20s and 30s. On the back of the newsflow, Rowsley have managed to turn in profits of S$1.2m in Q2 2017 compared to a net loss one year ago.
Genting Singapore recorded strong trading volumes for the month of October as well and featured in the top 20 highest volume traded stocks. Its recent quarter earnings release was positive where net profit experienced a growth of 10 fold from S$18 million to S$173 million. The gaming sector is slowly recovering as evidenced by a 24% jump in gross gaming receipts. Investors are also positive on its planned expansion into Japan and closely monitoring the gaming license bidding. This stock may be on the rise and has certainly attracted many investors. However, in a recent analyst report release by Deutsche Bank, prospects for near term growth remain muted due to the planned capex needed for its US Las Vegas casino. Bonds issuance may be in the cards to fund its cash flow needs.
Dragon Group International
Dragon Group International, an electronics engineering firm has seen its stock volumes surge in the past week since the announcement of a takeover scheme which will turn it into a metal mining company. The company plans to fund the acquisition via the issuance of Dragon group shares and the target company is Coeur Gold Armenia (CGA), an African based precious metal mining company with mining operations for gold, silver and copper. Management has sounded positive on the deal with gold mining being a lucrative venture as present price levels and demand for gold forecasted to remain resilient in the future. Investors have since been drawn to the stock due to a significant change in business directions with stock volumes hitting new highs. The stock may remain highly traded due to the early stages of the deal announcement.
Global Logistic Properties
Global Logistic Properties (GLP) appeared as one of the top 20 most traded stocks in 20 October 2017 with significant trading volumes taking place over the exchange. It has been on the limelight since the planned divestment by GIC and has gotten a firm takeover offer by a consortium backed by top GLP management and Chinese investors. A shareholder vote is due once the circular is sent to all interested shareholders. Should the takeover succeed, investors who continue to be invested will get S$3.38 per share. Arbitrage gains are minute considering the last closing price at S$3.30. Shares have changed hands many times higher than the average traded volumes as the stock is targeted to be delisted by April 2018. Investors can choose to exit now and forgo a minimal 2% payout or choose to vote for the takeover and received a final payout of S$3.38 per share.
Sembcorp Marine, a drilling rig builder which has been adversely affected by the oil and gas sector downturn since 2015, have seen its shares trading volumes surge, coupled with a price increase. This has mainly been influenced by its announcement to sell 9 jackup drilling rigs to Borr Drilling for S$1.7billion. Investors have been attracted to the stock as this deal improves the company’s cash flow position with an upfront payment of about S$600 million. DBS analysts have maintained a buy call on the stock though the drilling rigs are sold at a loss, as previously terminated contracts has been successfully salvaged.
Blumont, a penny stock counter embroiled in the October 2013 stock crash has seen volumes surge in recent months. A notable announcement involving a mandatory takeover offer by Malaysian businessman has spurred investor interest. The offer has not garnered enough support with only 0.38% of total number of shares outstanding. The company may be a target for M&A but no firm details on the company’s future business directions was unveiled by the new major shareholder.
Spackman Entertainment Group
Spackman Entertainment Group has seen stock volume tick up in October 2017. It recently made headlines by announcing a deal to acquire Korean film production company Studio Take for part cash and stock with a combined value of S$7.6million. Concurrently, Spackman has increased its stake in Spackman Media Group, an associate company, by issuing new shares. Its recent M&A activities have prompted investors to scrutinise the stock, resulting in higher trading volumes. Any financial impact from these acquisitions has yet to materialise, and will only be evident in following quarters post-acquisition.