Author: sgwealthbuilder

Will the management drop the bombshell? Singtel share price became the talk of the town in recent days when DBS analysts claimed that Singtel may cut dividend payouts to $0.13 to $0.15 for FY2021 and had set target price of $3.12 for Singtel share price. On the other hand, there were market speculations that Singtel could possibly monetize its data centres through REIT, thereby unlocking value and freeing up cash flow for capital expenditure and dividends.

DBS’ argument is that results of Singtel’s regional associates will cause harm to Singtel’s bottom-line and roiled Singel share price in the process. To this end, I do not dismiss such a possibility. If investors looked back, share of pre-tax profits from regional associated reached an alarming 6-year low of $1.5 billion in FY2019, resulting in net profits to collapse to $3.1 billion. If the regional associates continued to underperform, things would surely spiral out of control.

Then again, do you think Singtel management will leave it to fate? To be frank, I have never been a big fan of banks’ stock analyses, especially those generated by DBS. I always take their stock analyses with a pinch of salt because their target prices were often so off-tangent and out of touch with reality.

As an engineer working in the aviation industry for 15 years, I have seen the rise and fall of the sector. Inevitably, when we talk about the aviation industry, investors would likely to draw comparison between the two Singapore titans – SIAEC and ST Engineering. Between the two, SIAEC share price had lost considerably shine in recent years, making it one of the biggest falling stars in SGX mainboard. Will SIAEC share price ever see light at end of tunnel?

Both entities had dominated the local aviation industry for decades and are majority-owned by Temasek Holdings. Nonetheless, the similarities ended here as both companies took on entirely different destinies due to a series of unfortunate events and different business strategies. From the lens of investors, it seems that someone up there has decided to write intrigue scripts for SIAEC share price and ST Engineering share price.

Whilst SIAEC and ST Engineering had ruled the local aviation industry for decades, both are fundamentally very different companies with niche business models. The former is mainly engaged in the regional airlines maintenance and technical services businesses while the latter is engaged in the maintenance and  modification businesses, with special focus in the United States MRO market and passenger-to-freighter conversion capabilities.

With a history of 130 years, Hongkong Land is certainly one of the most venerable listed companies in Singapore. Possibly, only Boustead, OCBC’s Great Eastern and UOB’s Haw Par Corp can match Hongkong Land in terms of pedigree and history. If you are talking about prestige, Hongkong Land is even more impressive as its parent company is none other than the famous Jardine Matheson Holdings. Together with Dairy Farm, Jardine C&C, Jardine Matheson Holdings and Jardine Strategic Holdings, Hongkong Land forms the “Hong Kong Five Tigers” that ruled Straits Times Index (STI) for many years.

The Hong Kong Five Tigers are all part of the Jardine Matheson Group and this network of companies established an impenetrable fortress in the SGX mainboard. Nonetheless, what can float a boat can also sink it. In this regard, will the unfolding Hong Kong protests be a Trojan Horse for Hongkong Land share price?

Hongkong Land share price in trouble

Troubles certainly come in troops for Hongkong Land share price. Indeed, since the start of the Hong Kong protests, Hongkong Land share price got bombed out, falling from USD6.60 to the current USD5.50.  However, investors who are planning to buy on the cheap and sell on the upside should be mindful of the business dynamics affecting Hongkong Land share price.

Amid the current rally in the S-REIT sector, Keppel REIT is one of the rare counters that is majority-owned by Temasek Holdings (49%) and at the same time, an S-REIT that remained elusively laggard thus far. The current Price/Book value stood at 0.875, indicating that Keppel REIT unit price is trading at an undervalued level.

With a strong sponsor in Keppel Land and a solid backer in Temasek Holdings, Keppel REIT can be considered a blue chip among the S-REIT community. Total market capitalization is about $4.2 billion. So the poor form of Keppel REIT unit price, against the backdrop of a powerful rally in the S-REIT sector, must have left investors singing the blue. Then again, unitholders must count their blessings. After all, Keppel REIT’s net income consistently fell for the past five years. It is a miracle that the unit price had not suffered a meltdown.

In my opinion, there are a few factors that attributed to the current form of Keppel REIT unit price. However, the investment merits will be highlighted as well so as to provide a balanced view of this counter. Fundamentally, Keppel REIT is not a company in crisis but there is a need to be mindful of the dark side.

Will OCBC share price bomb out on 5 November 2019, which is the day it announces its third quarter financial results? In my view, investors should brace themselves for a wild ride as there are signs that point to OCBC share price breaching the critical support level of $10.00 in the coming weeks.

2019 had been such an intriguing year for OCBC share price. Despite posting good financial results for 1QFY2019 and 2QFY2019, OCBC share price tumbled after the announcement of the financial results. For example, on 10 May 2019, the bank achieved net profit of $1.23 billion for the first quarter of 2019, representing an increase of 11% to 1QFY2018. Yet in that month, OCBC share price plunged from $12.10 to a low of $11.00.

Then on 2 August 2019, OCBC share price corrected from $11.40 to $10.50 on 26 August 2019. The decline was puzzling because 2QFY2019 results showed that net profit had increased by 1% to $1.22 billion from $1.21 billion reported a year ago. Although the data indicated that growth for OCBC is slowing, the bank is still making healthy level of profits. In this regard, will 3QFY2019 be the final straw that break the camel’s back?

After delivering ten consecutive quarter of increasing profit, DBS Group share price should logically be in heaven right now. However, in life, things aren’t always so straightforward. Whilst the business fundamentals of the bank remained positive, the narrative for the global macro-economic conditions had turned dark. Against this backdrop, DBS Group share price hit the skid to reach the current $24.50 after smashing a record high of $30 in April 2018.

Question now is will Singapore’s DBS Group share price join Hong Kong protest? 11 November 2019 will be destiny day for DBS Group share price as the bank will announce its 3^rd quarter financial results for FY2019. Many investors are holding their breath for the release of the financial data. This is because Hong Kong market contributed the second highest profit to the Group (due to Dao Heng bank).

To illustrate how important Hong Kong market is to DBS Group share price, the net income from its Hong Kong subsidiary for 1HFY2019 was $755 million while Singapore contributed $2.24 billion. The rest of Greater China contributed only $145 million while the rest of the world provided $118 million. Assuming that the property disposal gain of $86 million in last year was excluded, the net profit actually grew 15%.

What an explosive bull run! From $1.00 in 2016, Keppel DC REIT share price went on a rampage to reach a high of $2.00 in 2019, representing a 100% increase in value within a span of just three years. Unitholders of Keppel DC REIT must be laughing all the way to the bank. Amid the current rally in S-REITs sector, is the current form of Keppel DC REIT share price sustainable?

Hailed as the first pure-play data centre REIT listed in Asia on SGX, Keppel DC REIT is certainly riding on Singapore’s aspiration to become the Smart Nation. During its IPO, the portfolio comprised of only eight data centres. In the blink of eye, the portfolio has grown to 15 data centres spanning across Asia and Europe. The number of data centres will rise further to 17 as Keppel DC REIT is recently acquiring two data centres in Singapore – KDC SGP 4 located in Tampines Industrial Park and 1-Net North DC in Woodlands. As 67% of the portfolio is in Asia while 33% is in Europe, the management has built a diversified portfolio indeed.

Being a data centre service provider, Keppel DC REIT is an interesting long-term REIT play because the business is relatively immune to economic cycles.

It has been a lost decade for CapitaLand share price as the real estate developer endured crisis after crisis ranging from the Great Financial Crisis to the European sovereign debt problem to the slew of property cooling measures unleashed by Singapore government. For sure, investors of CapitaLand had a roller coaster ride and suffered plenty of sleepless nights. But the sluggish CapitaLand share price looks set for a turbo-charged spin in the next six months. Read on to find out why CapitaLand could possibly stage a “return of the king” in the coming months.

Being one of the marquee assets of Temasek Holdings, CapitaLand is obviously one of the big boys in the real estate business. The company’s real estate and hospitality portfolio spans more than 120 cities in over 20 counties. In addition to this, CapitaLand also manages eight REITs and business trusts and twenty private funds. Given the diversified global portfolio (worth $129 billion), understanding this real estate giant is never easy but the biggest question among investors must be why CapitaLand share price had consistently been laggard for the past few years.

If investors looked back, CapitaLand share price peaked at $7 to $8 back in 2007 but collapsed to the abysmal level of $2 during the Great Financial Crisis in 2009.

What a gory correction. After delivering a set of disappointing quarterly results that saw Singtel clocking the seventh consecutive quarter of declining profits, Singtel share price tumbled from a high of $3.55 in July to a low of $3.12 on 27 September. The 12% correction would have caused long-term investors to panic. Question now is: where would Singtel share price go from here?

On 2 July 2019, I highlighted that Singtel share price would be entering a dark chapter but is still considered an excellent investment for the long run due to the telco’s massive regional presence. Thus, investors should stay calm despite Singapore share price volatility. To make money out of this counter, investors should set the appropriate entry price.

Based on the current form, it seems that Singtel share price is likely to continue its bearish streak. Perhaps this could be a sign of things to come. For sure, the coming 1H results would dictate the form of Singtel share price. Unless the management announced significant moves that would provide positive catalyst to Singtel share price, such as the monetization of its loss-making ventures (cybersecurity and digital life businesses), it would take some serious effort to reverse the bearish sentiments for this leading light of SGX.

There you go. The protracted Hong Kong protests claimed its first casualty among the prestigious Straits Times Index (STI) when it was announced on 5 September 2019 that Hutchison Port Holding Trust (HPH) will be booted out of the index. Replacing HPH Trust will be Mapletree Commerical Trust (MCT). The move should be a bid to contain the fallout from the Hong Kong protests. And it is not difficult to see why HPH Trust was chosen for the axe.

Currently, Hong Kong stocks make up 20% of the STI constituents. Other than HPH Trust (which was backed by the famous Li Ka Shing), the other five Hong Kong counters are all linked to the conglomerate Jardine Group – Hong Kong Land, Dairy Farm, Jardine C&C, JMH and JSH. Between HPH Trust and the Jardine Group, the obvious candidate to be dropped is HPH Trust, which has been a perennial falling star among the STI constituents. The question now is: why was Mapletree Commercial Trust chosen for the slot?

With a market capitalization of $6.11 billion, MCT is the largest REIT sponsored by Mapletree Investments Pte Ltd. Temasek Holdings has a majority stake of 35% in this REIT while other big boys like Schroder Investment and NTUC Enterprise own stakes amounting to 10.2% and 2.35% respectively.

Analysing Cache Logistics Trust is not easy. And it is not because of its business scale. In fact, with only 27 properties, Cache Logistics Trust is the smallest player among Ascendas REIT and Mapletree Logistics Trust. The difficulty in understanding Cache Logistics Trust is because the past two years had been such a whirlwind for this S-REIT that one wonders how on earth this S-REIT managed to stay the course till now.

When debt-laden HNA Group acquired the previous Sponsor of Cache Logistics Trust (CWT Limited) in 2017, it was a sign of things to come. In 2018, CWT sold off all its stake in Cache Logistics Trust to the manager, ARA. Currently, ARA is the largest shareholder of this S-REIT, with stake amounting to 9.6%.

With a market capitalization of merely $783 million, Cache Logistics Trust is considered a very small S-REIT. Given the current low market valuations and challenging operating environment, consolidation is inevitable in the S-REIT sector. In my view, Cache Logistics Trust could be an interesting acquisition for Mapletree Logistics Trust. After all, the latter splashed out a whopping $730 million in 2018 to acquire five ramp-up warehouses, which is a niche occupied by Cache. Forking out another $780 million or so would not be a challenge for Mapletree Logistics Trust as it has a deep-pocket backer in Temasek Holdings.

Crisis? What crisis? Mapletree Logistics Trust (MLT) rubbished all talks of market downturn as its unit price went on a rampant to smash a record high in July 2019. What a magnificent run!

Christmas certainly come early for MLT as it went on a billion dollar shopping spree. Not that investors are complaining of course as the unit price rocketed to a stunning high of $1.65 on 5 July 2019. Subsequently, the unit price was brought down to earth to the current level of $1.60.

Those who had bought MLT during its IPO in 2005 would have no regrets. Its public offer of 357.4 million units at $0.68 per unit was 43.88 times over-subscribed, reflecting the strong demand for the REIT. Over the years, the management had delivered the goods as the unit price of Mapletree Logistics Trust climbed steadily to reach the current $1.58.

Till to date, MLT had distributed a total of $0.952 per unit to unit holders. With the massive capital appreciation, long-time investors must be laughing all the way to the bank.

Being 32.9% owned by Temasek Holdings, it is evident that MLT is destined to be one of the leading lights among the S-REITs. Currently, this S-REIT holds 137 properties with value at nearly $7.9 billion.

It is the return of the prodigy as BreadTalk’s founder, George Quek, is reclaiming his throne – “Singapore Foodcourt King”. Since my last article on BreadTalk share price, this counter took on a life of its own when the bread company made headline news for splashing out $80 million for the acquisition of Food Junction. Many analysts balked at the price tag and there were plenty of critics claiming that BreadTalk had overpaid for a project that earned net profit of merely $3183.

On the contrary, I rate the acquisition positively despite the short-term harm it may cause to BreadTalk share price. In my view, the naysayers could be missing the forest for the trees. Many readers are not going to agree with my analysis but I do think that context is important here and one should not jump the gun just by looking at financial figures. You need to analysis the situation at big picture level when it comes to stock investing.

The acquisition of Food Junction came at a time when CEO Henry Chu resigned due to personal and health reasons. Whether there is a power struggle behind the scene is subject to debate. But to be honest, Henry Chu’s pending departure (he will leave at end of the year) is unlikely to hit BreadTalk share price in the near future.

It is case of lightning strike twice for Temasek Holdings! Investors of HPH Trust must be left punching the wall as the unit price of the business trust collapsed following the announcement of HPH Trust being given the boot from the prestigious Straits Times Index (STI) on 5 September 2019. Temasek Holdings is a major shareholder in both HPH Trust and Asian Pay TV Trust.

In 2018, unit price of Asian Pay TV Trust plunged after the business trust announced massive cut in distribution. For HPH Trust, the collapse of its unit price should be triggered by both the violent Hong Kong protests and the recent exit from STI. The exit from STI also came at a bad timing. When SIAEC (2017) and StarHub (2018) were booted out of STI, the share prices went into a tailspin. On this basis, I expect unit price of HPH Trust to crash into the wall in the coming weeks.

The huge decline in HPH Trust and APTT would have inflicted some form of damages to Temasek Holdings as the sovereign wealth fund holds 14% stake in the former and 7.9% in the latter. Notwithstanding this, given Temasek Holdings’ widely diversified portfolio, I don’t expect the collateral damage to be significant or fatal enough to sound the alarm bell.

It seems like Singtel share price is in the mood for love again. After ex-dividend in July, Singtel share price suffered its seasonal meltdown, falling from a high of $3.56 in early July to the current low of $3.13. As one of the biggest telecom players in the region, Singtel is a blue chip. So the current bearish Singtel share price may represent a good opportunity to accumulate.

On 2 July 2019, I warned that Singtel share price would be entering a dark chapter but is still considered a good company to invest for the long run because of its massive economic moat. Although this counter is ideal to hold for the long-term, investors must set appropriate entry-levels. Some members have enquired my entry level, which I have revealed to be $2.60.

Based on the on-going market trend, it is possible that Singtel share price could reach the level of $2.60 in the coming months. According to data, the lowest level for 2019 was $2.86 recorded on 3 January 2019. So unless the management announced some hugely positive news, such as the monetization of its loss-making ventures (cybersecurity and digital life businesses), it would take a herculean effort to reverse the bearish sentiments for this leading telco.

What a calamity for SPH share price! On 28 August 2019, all hell broke loose for SPH share price as the counter breached the all-critical level of $2.00 to reach a low of $1.93. It seems that dark forces had won the battle as a whopping 3.2 million SPH shares were shorted on 26 August 2016, causing SPH share price to plunge into the deep abyss.

Is it going to get any worse for SPH share price? To be frank, I don’t know but current trading level is at a stunning record 14-year low. During the dark days of the Great Financial Crisis 2009, SPH share price had not even touched such crazy level. So you can imagine the level of panic among shareholders. It seems that SPH share price is currently on a path of destruction and there is no end in sight. At least not so soon.

Confidence means everything in the stock market. Thus, to restore the confidence level of SPH share price, the management bought back 576,300 shares on 26 August 2019. But the action proved to be futile as SPH share price continued to retreat. Against the current backdrop, SPH share is trading at the level below its book value (P/Book Value was 0.947) and dividend yield was about 4.3%.

August had been a torrid month for many investors as the unfolding trade war between US and China roiled the stock market. Amid the stock market upheaval, Sheng Siong share price stands out like a shining diamond. Investors are left confounded as the unfolding trade war has absolutely no impact on Sheng Siong share price. To top it off, this counter even surge to a record high of $1.18 in recent days.

Given the bullish form of Sheng Siong share price, investors should have no complaints. Since IPO in 2011, Sheng Siong share price had stormed from $0.33 to the current $1.15 level. Investors are laughing all the way to the bank because of the huge capital appreciation and the consistent dividend pay outs.

The strong business momentum of Sheng Siong saw CEO Lim Hock Chee receiving the SBA’s Businessman of the Year award in early 2019. In 2015, the CEO also received the same award. Indeed, the consistent growth and solid business fundamentals lend support to the form of Sheng Siong share price through the years. Can Sheng Siong share price sustain its blockbuster form in the second half of 2019?

Sheng Siong share price in wonderland

On looking back, 2018 had been a defining year for Sheng Siong as the super-market operator opened ten new stores, bringing the total retail area to an all-time high of 496,200 square feet.

8 August 2019 would be remembered by many investors as a scary day because Yangzijiang share price plunged by 20% before trading halt. On that fateful day, 10.5 million shares were shorted by the big boys, making it the highest volume stock being shorted.

As usual, retail investors were initially left clueless on what’s happening. It was only on 14 August 2019 that the management revealed in a SGX filing that the Executive Chairman and major shareholder, Ren Yuanlin, was currently assisting the Chinese authorities in a “confidential investigation”.

The SGX filing provided nothing specific about the nature of the investigation and also stressed that it is “business as usual” for Yangzijiang as none of its directors and business units are affected by the investigation. Yangzijiang share price subsequently recovered from a low of $0.86 to the current $0.95 level.

The recovery of Yangzijiang share price could be attributed to a lower intensity of short selling activities for the past week and also the aggressive shares buy back made by the management. Following the lifting of the trading halt, the management repurchased 12 million shares (as of 23 August 2019), partially restoring the confidence level of Yangzijiang share price.

The fact that the company was able to launch such aggressive shares buybacks showed that the company has significant firepower to take on opportunistic short sellers.

Since my last coverage, StarHub share price suffered a catastrophic meltdown, falling from $1.55 to the current $1.35 level within the span of only a month. The culprit is, of course, the disappointing 2QFY2019 financial results. Against the backdrop of the persistent bearish StarHub share price, the telco certainly looks like a company in crisis.

When Starhub was booted out of the prestigious Straits Times Index (STI) in 2018 it was a harbinger of things to come. Fellow comrade, SIAEC, suffered similar fate back in 2017 and its share price went into tailspin. On this basis, I don’t see how StarHub share price can fight destiny as its mobile services business is solely entrenched in Singapore.

The massive plunge of StarHub share price since 2015 would have inflicted plenty of heart pains for long-time investors as this counter used to be a dividend darling among Singapore investors. For sure, the entry of TPG had soured the mood for telco stocks and dented the growth prospects for local telco players, which already face a saturated mobile market in Singapore.

As the telco war continues to unfold, I fear the worst for StarHub share price. Make no mistake, the fourth telco has not even started operations yet StarHub share price already collapsed to such outrageous level.

Troubles certainly come in troops for DBS Group share price. The recent Hong Kong protests would likely to inflict damage to its earnings for the second half of the year as Hong Kong market traditionally contributes the second highest profits to the Group (due to Dao Heng bank).

As Singapore economic growth is slowing down to 0 to 1% for 2019, DBS Group share price will also be among the first to be hit by a market slowdown. On the other hand, housing loans continued to fall because of the 2018 property cooling curbs. As of 30 June 2019, housing loans decreased to $73.9 billion from $75 billion in December 2018. But of more concern is the unfolding trade war between US and China, which threaten to derail DBS’ trade loan portfolio.

Against the above backdrop, can DBS CEO still laugh all the way to the bank? Maybe so. Given the massive run-up of DBS Group share price since 2016, CEO Piyush Gupta is still sitting on a healthy level of paper profits. Currently, the CEO holds 1.17 million DBS Group shares worth $29 million. Similarly, for those who entered this counter in 2016, they should see good capital appreciation for their investments.

It is the perfect storm for OCBC share price. The recent Hong Kong protests would likely to hurt its business in the former British colony (OCBC has a presence over there because of Wing Hang Bank). Singapore economic growth is slowing down to 0 to 1% for 2019 because of the global trade war. Being the economy bellwether, bank stocks are sensitive to economic condition. Thus, OCBC share price will be among the first line of stocks to be hit by a market slowdown.

OCBC share price comes under further pressure following the release of financial results which showed that its total housing loans portfolio continued to fall to $62.4 billion as compared to $65.9 billion in the same period last year.

Notwithstanding the above, OCBC announced a set of good Q2FY2019 results that saw net profits rising 1% to $1.22 billion. Net interest margin has increased to 1.79%. Also, the decline in housing loans had been offset by the huge increase in building and construction loans, which surged to $59.5 billion from $40.9 billion in last year. Despite the rosy report card, OCBC share price turned bearish and lost support at the $11.00. Current OCBC share price is $10.65.

In my view, the recent correction of OCBC share price is not unique to the bank alone.

The recent volatility of Singtel share price must have caused many investors to shed tears. From a high of $3.56 in early July, Singtel share price spiralled out of control to reach a low of $3.12 on 14 August. The decline represented a correction of 12% for Singtel share price within the span of only a month.

Obviously, the knock-out punch for Singtel share price came from the latest 1QFY2020 which revealed net profit had plunged by a whopping 35% to $541 million. The latest results came on the back of seven consecutive quarter of declining profits.

On 2 July 2019, I warned that Singtel share price would be entering a dark chapter but is still considered a good company to invest for the long run because of its massive economic moat. Although this counter is ideal to hold for the long-term, investors must set appropriate entry-levels. Some members have enquired my entry level, which I have revealed to be $2.60.

Based on the trend, it is possible that Singtel share price could reach the level of $2.60 in the coming months. The lowest level for 2019 was $2.86 recorded on 3 January 2019. So unless the management announced some hugely positive news, such as the monetization of its loss-making ventures (cybersecurity and digital life businesses), it would take a herculean effort to reverse the bearish sentiments for this leading telco.

Will Keppel Infrastructure Trust (KIT) do a Hyflux? I have never been a big fan of business trusts. Just take a look at Asian Pay TV Trust (APTT) and Hutchinson Port Holdings (HPH) Trust. The unit price of both business trusts plunged to incredibly abysmal levels in recent years due to declining business fundamentals. Could Keppel Infrastructure be different?

Bizarrely, all three business trusts are linked to Temasek Holdings. Even more strange is that there are eerie similarities between Keppel Infrastructure Trust and Hyflux.

Like Hyflux, Keppel Infrastructure Trust owns just one power-plant (Keppel Merlimau Cogen Plant), which has been making huge losses and still counting. Similar to the ill-fated Hyflux, Keppel Infrastructure Trust issued $300 million 4.75% Perpetual Bonds. Oh yes, KIT also owns a 70% stake in SingSpring Desalination Plant, which was built by Hyflux. Gulp, all these sounds quite ominous right?

Nonetheless, with sovereign wealth fund Temasek Holdings as backer, chances of KIT share suffering the same fate as Hyflux is low. Temasek Holdings would not allow it to happen. But will KIT share price collapse like APTT and HPH Trust? Read on to see my review of KIT share price.

KIT share price to sink or swim?

One quarterly financial result does not define the long-term prospect of a company. But following the release of the latest financial results, can Singtel share price and StarHub share price really fight gravity? It appears to me that that both telco players are heading into two completely different unchartered territories.

It was only a few years ago that the local telco stocks were deemed as defensive stocks because of their stable stock prices and high dividend pay outs. But the market dynamics changed swiftly with the introduction of a fourth telco player, TPG, in 2016.

Subsequently, StarHub share price plunged from $4.00 to the current abysmal level of $1.45. As the dominant player, Singtel share price remained resilient so far but had lost plenty of the bullish momentum seen in its hey-days.

Is this the end of the road for Singtel share price and StarHub share price? In this article, let’s examine the outlook for these two counters.

Singtel share price stung by Airtel

Singtel share price is expected to come under pressure after the management delivered a set of trashy 1QFY2020 results that saw net profit plummeted by 35% to $541 million. On 2 July 2019, I warned that Singtel share price would be entering a dark chapter.

Could it be the straw that broke the camel’s back? Since 2014, there were persistent rumours of Sembcorp Marine merging with Keppel Corp. But the rumours remain as rumours until now. With the explosive revelation of potential corruption charges and the recent meltdown of Sembcorp Marine share price, Temasek Holdings could be forced to show-hand.

Sembcorp Marine share price ripped apart by corruption probe

Sembcorp Marine share price see red

Incidentally, Keppel Corp was involved in another merger and acquisition activity (M1) in 2018. That might have stalled the proposed deal between Sembcorp Marine and Keppel as substantial resources would have been expended to fund the exercise. But now that the M1 saga is over, it is timely to examine whether Keppel would make a move to rescue Sembcorp Marine share price. After all, both entities share the same parent company – Temasek Holdings.

The impetus for the merger came at a time when the oil-rig builder continued to struggle in the midst of a protracted slow-down in the oil and gas industry. For 1HFY2019, Sembcorp Marine reported losses of $8.77 million. To make matter worse, its subsidiary in Brazil, Estaleiro Jurong Aracruz Ltda (“EJA”), had been stormed by the Brazilian authorities in July 2019.

SGX share price is in the form of its life following the release of solid full-year financial results for FY2019 that saw the bourse operator delivering the highest profits in 11 years. Revenue of $909.8 million was also the highest in 19 years. With such stellar report, no wonder SGX share price rocketed in recent weeks.

It has been 4 years since Loh Boon Chye took over as CEO of SGX. On the basis of the past four years of financial records, I would give Loh Boon Chye an A+ for his leadership performance. Under his tenure, net profits surged from $349 million in FY2016 to $391 million in FY2019. What is even more impressive is that the Return on Equity (ROE) has increased to 36%. Against this backdrop, will SGX share price hit $10, a level last seen in 2010?

On looking back, Loh Boon Chye certainly brought peace and stability to SGX share price. This is in deep contrast to his predecessor, Magnus Bocker, who presided SGX over the period of penny chip meltdown, trading breakdowns and the fallout from the S-chips saga. While these episodes had long blown over, SGX is dealing with a new set of challenges – dearth of IPOs and slew of companies applying to delist.