INSTITUTIONS were net buyers of Singapore stocks over the five trading sessions through to Jul 4, with S$188 million of net institutional inflow, as 20 primary-listed companies conducted buybacks with a total consideration of S$23.6 million.
CapitaLand Investment (CLI) led the buyback consideration tally for the five-sessions, acquiring 5,970,400 shares at an average price of S$2.65 per share. This brings the percentage of shares acquired on the current mandate to 1.47 per cent of the issued shares (excluding treasury shares) as of the date of the share-buyback resolution.
For the contingent of non-STI primary-listed companies that conducted buybacks over the five sessions, First Resources led the consideration tally with 1.15 million shares purchased at an average price of S$1.38 per share.
OUE also filed that the date of purchase of its off-market acquisition of 84,038,036 shares was Jul 5.
Leading the net institutional inflow over the five sessions were DBS, UOB, Singtel, OCBC, Seatrium, Yangzijiang Shipbuilding, Sats, Great Eastern, Mapletree Pan Asia Commercial Trust, and Venture Corporation. Meanwhile, Sembcorp Industries, Genting Singapore, Jardine Cycle & Carriage, Singapore Airlines, Mapletree Industrial Trust, Singapore Exchange, Keppel, CapitaLand Ascendas Reit, Wilmar International and CapitaLand Ascott Trust led the net institutional outflow.
The five trading sessions saw around 100 director interests and substantial shareholdings filed for close to 50 primary-listed stocks. Directors or chief executives filed 19 acquisitions, and no disposals, while substantial shareholders filed 11 acquisitions and nine disposals.
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UOL Group
Between Jun 27 and 28, Wee Investments acquired 426,700 shares of UOL Group at an average price of S$5.20 per share. With a consideration of S$2.2 million, this increased the deemed interests of UOL Group chairman Wee Ee Lim and director Wee Ee-chao.
This has brought the total interest of Wee Ee Lim from 15.74 per cent to 15.79 per cent.
The preceding acquisition of UOL Group shares by Wee Investments via a market transaction was back in March 2023 with 300,000 shares bought at S$6.74 per share.
Wee Ee Lim was appointed chairman of the group in February 2024. Prior to this, he was deputy chairman from the time of the appointment in August 2015.
He is also the chairman of Singapore Land Group and a non-executive and non-independent director of UOB.
In addition, he is the president and CEO of Haw Par Corporation since 2003 and has been closely involved in the management and growth of the Haw Par Group for more than 30 years.
An STI constituent, UOL Group is a leading Singapore-listed property and hospitality group.
With a rich history that began as Faber Union in 1963, today UOL Group maintains a robust portfolio that includes residential properties, commercial investments, and a strong foothold in the hospitality industry, with around S$22 billion in total assets.
For its FY23 (ended Dec 31), UOL Group reported a 44 per cent increase in net attributable profit to S$707.7 million, mainly due to a gain of S$442.3 million from the sale of a wholly owned subsidiary which held Parkroyal on Kitchener Road.
In FY23, 85 per cent of the group’s revenue was from Singapore.
Looking to the remainder of FY24, Wee Ee Lim maintains that demand for private residential properties in Singapore is expected to grow at a slower pace. He adds that office rents are likely to moderate due to new pipeline of offices and more companies may right-size in view of economic uncertainties.
On the hospitality side, Wee Ee Lim expects that with tourism projected to recover fully this year, the retail sector should benefit with higher tourist arrivals, and retail rents would be further supported by a lack of supply in retail space. Likewise, he expects that Singapore’s hospitality sector is likely to continue its growth with the regional travel recovery.
As at Jul 4, UOL Group maintains a return-on-equity ratio of 6.5 per cent, and as at the same date, a price-to-book ratio of 0.4x, a discount to the five-year average price-to-book ratio of 0.6x.
The stock has ranked as Singapore’s 23rd most traded by average daily turnover this year, in addition to ranking among the 10 stocks that have booked the most net retail inflow.
The Reuters Consensus Estimate Target Price for UOL Group is S$7.715. This represents the average of individual estimates provided by analysts covering the company, with estimates typically representing analyst’s opinion of the stock performance over the next 18 months.
Raffles Medical Group
On Jun 27, Raffles Medical Group executive chairman Loo Choon Yong acquired 800,000 shares at an average price of S$0.98 per share. This increased his total interest from 54.90 per cent to 54.94 per cent.
Since, late February, Dr Loo has been gradually increasing his total interest in the stock from 53.02 per cent.
LMS Compliance
Between July 2 and July 3, Louis May Pte Ltd acquired 261,000 shares of LMS Compliance at an average price of S$0.36 per share. This increased the aggregate deemed interest of executive director and CEO, Dr Ooi Shu Geok, and executive director and chief development officer, Chong Moi Me, from 83.21 per cent to 83.50 per cent.
Both Dr Ooi and Chong are deemed interested in the Catalist-listed company shares held by Louis May and Fitcorp Value.
CLI leads H1 2024 buyback consideration tally
In H1 2024, the total consideration of on-market share buybacks filed by close to 70 SGX primary-listed companies amounted to S$714 million, more than doubling the S$324 million of consideration reported for H1 2023.
Share buybacks by way of market acquisitions are ‘on-market’, that is the company buys the shares from any willing seller at prevailing market value.
Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long-term capital management.
The month of June saw more than S$200 million in buyback consideration, which was the highest monthly tally since September 2022.
CapitaLand Investment led the H1 2024 buyback consideration with 100,451,300 shares acquired at an average price of S$2.73 per share.
For the current mandate from Apr 25, through to Jun 30, CLI bought back 1.36 per cent of its issued shares (excluding treasury shares).
The global real asset manager maintained that its share buybacks provide for “greater flexibility over its share capital structure with a view to improving, inter alia, its return on equity”.
It also emphasised that it will only conduct share buybacks when it is of the view that such acquisitions will or will likely be in the interests of the company.
OCBC, City Developments and UOB lodged the next highest on-market buyback considerations for H1 2024.
Olam Group, Yangzijiang Financial Holding and First Resources booked the highest buyback consideration for the non-STI stocks.
Olam Group maintains that its buyback programme catalyses greater value for investors.
Yangzijiang Financial Holding maintains its share buybacks as an effective method of returning value to shareholders and will continue doing so when circumstances permit.
The asset manager adds that it takes the amount of surplus cash available, its share price level, and prevailing market conditions, into consideration when engaging in share buybacks.
The writer is the market strategist at Singapore Exchange (SGX). To read SGX’s market research reports, visit sgx.com/research.
