THE STRAITS TIMES Index had a strong week, ending up 3.3% at 2,881.4 points, leading most of the major Asian bourses. The Hang Seng Index finished up 2% while the Shanghai Composite Index closed down 0.6%. Only the Nikkei 225 finished higher, up 3.7%.

 

Much of the strength in the STI came from Jardine Strategic Holdings and Jardine Matheson Holdings, which surged 11.3% and 10.7% respectively last week. The two companies are part of the Hong Kong business group that owns a wide range of businesses including real estate, retailers, oil palm plantations and vehicle distributorships.

 

Citigroup recently upgraded its ratings on both stocks — with Jardine Strategic now a “buy” and Jardine Matheson a “hold” — after they reported earnings that exceeded expectations. Jardine Strategic has announced a share buyback tender of US$250 million ($348.3 million) at a price of between US$18 and US$19. Citigroup says if the group is successful in its tender, Jardine Matheson’s stake in Jardine Strategic could rise to about 82.5%, which could put the latter closer to a privatisation deal. 

 

Also leading the pack were transport companies Neptune Orient Lines and Singapore Airlines (SIA). In a recent market strategy report, Credit Suisse sees the transport sector as having the strongest positive momentum. The consensus 12- month forward earnings per share has been revised up by 1.7% so far in March, the report says. The transport sector saw the highest upgrade at 8%, driven primarily by upgrades for those two stocks. “We continue to see further upgrades in the transport sector, where earnings are still at only 32% of the peak in 2007, despite recent upgrades.”

 

SIA benefited last week from an announcement by the International Air Transport Association that airlines worldwide will lose a collective US$2.8 billion in 2010, half the previous forecast. The Singapore Tourism Board also said that it expects an increase of up to 29% in visitor arrivals this year, boosting the outlook for the national carrier.

 

Shares of Qingmei Group Holdings are expected to start trading Wednesday. The Chinabased original-design manufacturer of soles for sports shoes is selling 184 million shares at 31 cents each in an IPO. Only two million of those shares have been sold to the public, with the rest being placement shares.

 

Another IPO is Man Wah Holdings, a Chinese furniture company that recently delisted from the SGX and is listing in Hong Kong. The indicative issue price range is between HK$10.50 and HK$14.50, implying a forward price-to-earnings ratio (PER) of 17.8 to 24.6 times. That’s significantly above the PER of about four times that Man Wah used to command in Singapore. The retail portion of the offering is expected to open on Thursday.

 

Another potential comeback stock is furniture retailer Courts. According to reports, the Asia Retail Group, which is partially owned by the Baring Private Equity group, is looking to launch an IPO of the combined Singapore and Malaysia retail operations of Courts in April.

 

Universal Studios Singapore, the theme park that is part of the Resorts World at Sentosa integrated resort being developed by Genting Singapore, opens its doors to the public on Thursday. Shares of Genting suffered last week, falling 28.5%.