INSTITUTIONS were net sellers of Singapore stocks over the five trading sessions through to Feb 8, with S$212 million of net institutional outflow, as just six primary-listed companies conducted buybacks with a total consideration of S$700,447.
Stamford Land Corporation led the buyback consideration tally, buying back 1.325 million shares at an average price of S$0.40 per share over four sessions. Australasia’s largest independent owner-operator of luxury hotels has now bought back 0.10 per cent of its issued shares excluding treasury shares under its current mandate.
The group reported back in November that for its H1 FY24 (ended Sep 30), it would have generated a profit before tax of S$31 million if the fair value loss on the investment property in London, 8 Finsbury Circus, of S$71.2 million was excluded. The group added that the fair value loss on investment property is a non-cash item, and does not have an impact on the operating cash flows of the group.
Furthermore, Stamford Land Corporation maintains the fair value loss of the group’s investment property in London was a result of an increase in capitalisation rate to 5.5 per cent in September 2023 from 4.5 per cent in March 2023. Fair value of an investment property varies inversely with the capitalisation rate.
Secondary-listed Jardine Matheson also bought back 21,400 shares on Feb 1 at an average price of US$40.63 per share, as filed on Feb 2. Leading the net institutional outflow over the five sessions were DBS, Singtel, Singapore Exchange, Seatrium, Yangzijiang Shipbuilding Holdings, CapitaLand Investment, CapitaLand Ascendas Reit, Thai Beverage, OCBC and Mapletree Pan Asia Commercial Trust.
Meanwhile, Keppel, Singapore Airlines, Singapore Technologies Engineering, UOB, Venture Corporation, Sembcorp Industries, Jardine Matheson Holdings, Jardine Cycle & Carriage, ComfortDelGro and Frasers Centrepoint Trust led the net institutional inflow over the five sessions.
The five trading sessions saw close to 70 changes to director interests and substantial shareholdings filed for 30 primary-listed stocks. Directors or CEOs filed seven acquisitions and two disposals while substantial shareholders filed eight acquisitions and three disposals.
Parkway Life Reit
On Feb 5, Cohen & Steers Capital Management increased its substantial shareholding in Parkway Life Reit (PLife Reit) to back above the 6 per cent threshold. The 2,355,900 units were acquired an average price of S$3.48 per unit. The deemed interest was previously above the 6 per cent threshold, but fell below 6 per cent, following a disposal of 3,777,771 units on Jan 3 at an average price of S$3.70. Note that Cohen & Steers Capital Management is not the registered holder of any shares of PLife Reit.
PLife Reit owns a diversified portfolio of 63 properties located in the Asia-Pacific region, with a total portfolio size of approximately S$2.23 billion as of Dec 31, 2023. This includes the largest portfolio of strategically located private hospitals in Singapore comprising Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital.
On Feb 1, Parkway Trust Management reported PLife Reit achieved a net property income of S$69 million for H2 FY23 (ended Dec 31). This an increase of 4.8 per cent from H2 FY22, and for its FY23, net property income amounted to S$139.1 million, which was up 14.1 per cent from FY22. During its FY23, PLife Reit fortified its presence in Japan’s aged care market with the acquisition of two new nursing homes in Osaka Prefecture.
These yield-accretive acquisitions marked the initiation of a new strategic partnership with K.K. FDS, an established real estate developer in Japan. At the same time the partnership has enhanced PLife Reit’s tenant diversification with a new operator and brings the Group’s total Japan portfolio footprint to 59 properties aggregating to S$717.24 million in value.
Digital Core Reit
On Feb 1, Cohen & Steers Capital Management also increased its deemed interest in Digital Core Reit (DCReit) to above the 5 per cent substantial shareholder threshold. The 825,000 units in DCReit were acquired at an average price of US$0.646 per unit. The filing noted that neither Cohen & Steers nor any of its affiliates is the registered holder of any shares of DCReit.
Also on Feb 1, DCReit Management reported that DCReit turned a pivotal corner in late 2023, reaching agreements to resolve a large customer bankruptcy and preserving the flexibility of its balance sheet with proceeds from asset sales at attractive valuations. Its distributable income to unitholders for FY23 (ended Dec 31) declined 7.3 per cent to US$41.5 million.
The US$3.70 distribution per unit in FY23 was also down 7.0 per cent from FY22 and represented an annualised distribution yield of 5.7 per cent, based on the closing price of US$0.645. DCReit has also repurchased 6,485,700 units in the current buyback mandate after buying back 11,009,100 units on the mandate.
The manager has noted that this demonstrates its prioritisation of value creation over AUM (assets under management) growth, with the close to 7 million units repurchased in 2023, at an average price of just under US$0.50 and a 26 per cent discount to Net Asset Value.
Looking forward, DCReit Management CEO John Stewart highlighted that the interest rate tightening cycle appears to be levelling off, while data centre transaction cap rates have begun to edge up, significantly narrowing the gap between public and private market valuations and putting DCReit in an “excellent position to capitalise on favourable fundamentals and its industry-leading acquisition pipeline in 2024”.
On Feb 7, DCReit Management also proposed a private placement to raise gross proceeds of no less than US$100 million, at an issue price of between US$0.60 and US$0.6250 per new unit.
Union Steel Holdings
Between Feb 2 and 6, Lian Bee Metal acquired 24,000 shares of Union Steel Holdings, which increased its substantial shareholding from 5.64 per cent to 5.70 per cent. The shares were acquired for a consideration of S$27,441 at an average price of S$1.14 per share.
Lian Bee Metal’s direct interest in Union Steel Holdings crossed the 5 per cent substantial shareholder threshold back on Sep 4. Union Steel Holdings is a multi-business investment holding company, with three primary business drivers – metals, scaffolding and engineering. Union Steel Holdings also gained shareholder approval for a share split of every one existing share into three shares at the Feb 7 EGM.
On Feb 7, Union Steel Holdings also reported its H1 FY24 (ended Dec 31) group revenue increased by 0.6 per cent or S$0.3 million to S$53.5 million from S$53.2 million in H1 FY24. This was mainly attributable to the notable expansion within the Engineering segment, which was partly offset by the sales softening in the Metals segment. Since FY22, the group has expanded into complementary business segments within the offshore, marine, and oil&gas industries.
The acquisition of BTH Group, Promoter, Marshal Group and Fastweld Engineering has diversified the group’s revenue streams and contributed to the increased revenue from the Engineering segment. Meanwhile, the metals sector, particularly the steel market, continued to experience further price softening and intensive competition for both new steel and scrap metal.
The group’s gross profit jumped 26.1 per cent to S$16.9 million in H1 FY24 from S$13.4 million in H1 FY23, mainly due to the higher revenue and improved performance of the engineering segment. As a result, gross profit margin also increased from 25.2 per cent in H1 FY23 to 31.6 per cent in H1 FY24.
Geographically, Singapore continues to be the primary driver of the group’s revenue, representing 79 per cent or S$42.3 million of revenue in H1 FY24 from 75 per cent or S$40.1 million in H1 FY23.
Between Feb 1 and 6, Accrelist executive chairman and managing director Terence Tea Yeok Kian acquired 490,000 shares at an average price of S$0.044 per share. With a consideration of S$21,410 this increased his total interest in the Catalist-listed company from 25.02 per cent to 25.18 per cent.
Tea is responsible for the overall growth of the group, and his main role is to determine its strategic direction and acquire and nurture new businesses, while driving the formulation and implementation of business plans and strategies. Tea also serves as the executive chairman and CEO of Jubilee. Accrelist has also provided support to Jubilee in terms of market expansion, cost-review exercises, and capital control improvements.
Tea has been consistently acquiring shares in Accrelist on the open market since the end of November, when the share price was at S$0.031, and his total interest stood at 22.53 per cent.
The writer is the market strategist at Singapore Exchange (SGX). To read SGX’s market research reports, visit sgx.com/research.