Will the Singapore stock market continue to shrink?

Will the Singapore stock market continue to shrink?

Zavier Ong
05/05/17, 02:47 pm

SINGAPORE (May 5): Large corporations, private-equity players and even controlling shareholders are snapping up locally-listed companies.

Last year, the Singapore Exchange (SGX) saw 27 privatisations excluding that of REIT manager ARA Asset Management, as well as an offer from Dutch beverage giant Jacobs Douwe Egbert (JDE) for instant coffee producer Super Group.  

(See also: Confirmed: John Lim-led consortium to buy out ARA Asset Management in $1.8 bil deal)

(See also: Super Group now 78.29% owned by Jacobs Douwe Egbert)

While much of the spotlight has been on the collective $13.2 billion in market capitalisation that was wiped off SGX, investors should not forget that those offers also put plenty of cash into the hands of shareholders.

The average price premium associated with the general offers was 30%, according to a SGX spokesperson.

As bargain-hunters have been actively scouring the market in search of companies to buy on the cheap, majority shareholders and founding families are also increasingly buying out minority shareholders and taking their companies private, which some observers think boil down to the issue of succession planning.

Companies are also scaling up to gain a competitive edge over their rivals, and many companies are turning to inorganic growth as the preferred method of expansion.

And while some might bemoan the shrinking pool of companies in Singapore, those funds are likely to be reinvested.

Where could the money turn up?

This week, analysts and industry observers tell The Edge Singapore why they think more of such deals are likely to take place this year as they see drivers of deals, other than stock valuations, in the coming months for the region to maintain a sustained level of merger-and-acquisition activity.

Find out more by picking up the latest copy of The Edge Singapore, (Issue 779, week of May 8), available at newsstands today.

CapitaLand said to be acquiring Star Harbour International Center project in Shanghai for $2.5 bil

SINGAPORE (Oct 17): CapitaLand is said to be investing about RMB 12.79 billion ($2.54 billion) to acquire the Star Harbour International Center project in Hongkou, Shanghai, according to real estate online portal Mingtiandi. The group is said to be acquiring its most expensive real estate project yet in China from Shanghai Port Group, after the state-run developer announced on last Friday that it is planning to sell the property. CapitaLand has yet to make a statement regarding the acquisition. When The Edge Singapore reached out to CapitaLand for comments, the group said the tender h....

Few have made it where Tung Lok now treads: SAC

SINGAPORE (Oct 17): Since its founding in 1984, Tung Lok Restaurants (2000) has made a name for itself in the local F&B scene. From serving gourmet Chinese cuisine in its flagship Tung Lok Restaurant, it is now engaging the tastebuds of a younger generation and licensing its brands overseas. As at end March, Tung Lok operates as 43 F&B outlets with 24 directly owned, eight held by associates and 11 others under management. These are located in Indonesia, Japan, China, Vietnam and, of course, Singapore. The group’s operations can be segmented into three categories: restaurateur,....

Analysts put SPH on 'hold', but is the end of its earnings decline in sight?

SINGAPORE (Oct 17): Analysts across three brokerages – UOB Kay Hian, OCBC Investment Research, and CGS-CIMB Research – have “hold” recommendations on Singapore Press Holdings (SPH), as the group performed below expectations for FY18. SPH saw its full-year earnings fall 19.7% to $281.1 million for the FY18 ended August, from $350.1 million a year ago. However, this was mainly attributable to the absence of a one-off gain of $149.7 million a year ago from the divestment of a joint venture. FY18 operating revenue fell by 4.8% to $982.6 million, from $1.03 billion a year ago. See:....
Stars align for US banks to shine

(Oct 15): A decade after the global financial crisis, the landscape of the US financial services ind