Month: June 2023

On 19 June 2023, OCBC increased its stake in Great Eastern (GE) to 88.4%. The venerable bank tried to privatise Great Eastern Holdings (GEH) unsuccessfully in 2004 and 2006. In the 2006 attempt, OCBC Bank managed to raised its stake in Great Eastern to 87.1%. Since then, OCBC Bank has steadily increased its stake to 87.91% as at 31 March 2021. If a privatisation does materialise, what would be the implication on OCBC share price?

Under SGX Rule 723 of the Listing Manual, listed companies must ensure that at least 10% of their issued shares must be held by the public. As OCBC currently holds about 88.4% of Great Eastern, the bank would just need to acquire only 1.6% more of Great Eastern shares in order to trigger the mandatory delisting requirement.

As at 20 June 2023, OCBC share price was trading at $12.56, remaining flat after the Great Eastern stake increase. The fact that the counter did not move at all could mean that the market viewed a potential privatization of Great Eastern as “non-event” for OCBC share price. However, what if OCBC privatize the insurance and then sell it off to unlock value for OCBC shareholders?

An SG Wealth Builder member had raised the possibility of OCBC divesting Great Eastern to me lately.

On 22 November 2022, I wrote that SIA share price could continue its bullish form in 2023. Indeed, the counter went on a rampage, surging from $5.45 to the recent $7.30. Year-to-date, SIA share price had rocketed nearly 33%, putting to rest any lingering doubts of another false dawn for the Singapore carrier.

The explosive form of SIA share price came on the back of the announcement of record profits in its 76-year history. The Group recorded a massive net profit of $2.1 billion for FY2022/23, an incredible turnaround from the loss of $948 million incurred in last year. Revenue surged to $17.8 billion, up from $7.6 billion. The ultra-stellar result led to the Group rewarding its staff with staff bonus of up to 8 months. The gesture of goodwill was to reward the staff for their sacrifice (pay cuts) made during the pandemic.

Evidently, SIA’s decision to shore up liquidity and reinstate capacity paid dividend as the airline was the first to capitalize on the pent-up demand for air travel. In March 2023, the passenger capacity reached 79% of pre-COVID levels. Question now: is SIA share price getting ahead of its fundamentals?

Given that the EPS is $0.35, SIA share price is currently being traded at PE of 20.9, which is on the high side.

Recently, I was reading one of my old articles on Sembcorp Industries share price written in August 2020. Back then, Sembcorp Industries collapsed to $1.80 following the demerger with Sembcorp Marine. However, I made a bold prediction that Sembcorp Industries would hit $5. Fast forward to 29 May 2023, Sembcorp Industries share price finally crossed that magical $5 mark.

To be frank, the explosive form of Sembcorp Industries share price had been nothing short of a fairy tale in SGX. Apart from iFAST, Sembcorp Industries is one of the only few SGX stocks that captures the imagination of investors. The stark difference between the two stocks is that the bullish run of iFAST shares did not last long while Sembcorp Industries share price went from strength to strength.

Given the splendid form of Sembcorp Industries share price, credit should be given to the Group CEO, Wong Kim Yin, who joined the Group only in July 2020. During his short tenure, CEO Wong has been instrumental in transforming Sembcorp Industries’ portfolio from brown to green. For the past three years, the Group secured a slew of green energy contracts. These contract wins enabled Sembcorp Industries share price back to rocket its way past the pre-pandemic levels.