A trader at a local brokerage says he’s heard of no news that could be driving the selling, while an analyst at a local house says he’s heard speculation of poor margins at Wilmar’s China consumer pack business, which will likely weigh 4Q results.
The following companies may have unusual price changes in Singapore trading today. Stock symbols are in parentheses, and share prices are from the previous close. Singapore’s Straits Times Index gained 0.3% to 3,255.87.
Developers: Singapore will increase down payments for second mortgages and impose a stamp duty on property held for less than four years to cool property prices. The nation’s private home prices climbed to a record in the fourth quarter as the nation’s fastest economic growth since independence helped counter earlier measures.
At 0247 GMT, Wilmar shares were up 0.9% at $5.75 on a volume of 6.1 million shares.
Wilmar International (F34.SG) is +1.2% at $5.77, outperforming the STI, which is flat-to-lower; the company’s analyst briefing Friday seems to have soothed some fears over a loss of business discipline after its foray into property development.
DMG says after the briefing, it is “comforted” that the property JV “will not be detrimental to the company’s business focus”; the property business “will essentially ride on China’s urbanisation and rising wealth, which are the very same factors driving its agribusiness in China.”
OCBC upgrades Wilmar (F34.SG) to Buy from Hold, and keeps its fair value estimate at $6.48.
The house says in reaction to Wilmar’s maiden entry into the China property market, via a 35%-JV partnership with HK property firms Kerry Properties (40%) and Shangri-la Asia (25%), WIL’s share price tumbled 16% to a recent low of $5.50, weighed by worries that management may be losing its focus.
The following companies may have unusual price changes in Singapore trading today, say Thomson Reuters and Bloomberg. Stock symbols are in parentheses, and share prices are from the previous close. Singapore’s Straits Times Index gained 0.1% to 3,254.25.
Singapore shares may rise in early trade on Thursday after Wall Street indices gained overnight following strong data on US private-sector jobs, boosting confidence its economy is on a recovery path.
Says the stock is likely to underperform near term due to a regulatory overhang and competition in China; also cites an overly optimistic consensus earnings estimates and likely lackluster earnings momentum, while investors may accord a lower P/E multiple for its intended deviation from the core business.
Singapore shares may open slightly higher on Thursday, boosted by higher Wall Street indices overnight and as the S&P 500 heads for its best December in nearly two decades. Singapore’s benchmark Straits Times Index <.FTSTI> was up 0.76% on Wednesday to 3,207.91 points. Here are some stocks and factors to watch:
Wilmar International (WLIL.SI), the world’s largest listed palm oil firm, may be in focus after it said on Wednesday it will submit a joint bid to buy the land use rights for six sites in China’s northern province of Liaoning.
Wilmar International (WLIL.SI), the world’s largest listed palm oil firm, said today it will submit a joint bid to buy the land use rights for six sites in China’s northern province of Liaoning.
Wilmar will partner Kerry Properties (0683.HK) and Shangri-la Asia (0069.HK), two firms linked to Malaysian billionaire Robert Kuok, in the bid.
Wilmar, controlled by a Kuok’s nephew, earlier this month bought land in Liaoning in partnership with Kerry and Shangri-la, sparking a sell-off in its shares as investors questioned why an agricultural firm was diversifying into property.
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Singapore shares may open higher on Thursday after the S&P 500 rose overnight to its highest level since the collapse of Lehman Brothers, led by bank stocks that have leapfrogged other sectors in December.
The following companies may have unusual price changes in Singapore trading today, say Bloomberg and Thomson Reuters. Stock symbols are in parentheses, and share prices are from the previous close. Singapore’s Straits Times Index gained 0.1% to 3,144.31.
Daiwa cuts Wilmar’s (F34.SG) target price to $6.73 from $7.49, based on a lower 14.4x FY11 P/E vs 16.2x FY11 P/E previously, to reflect its concerns over the agribusiness group’s venture into the real estate business.
“We believe investors will see this as a strategic divergence from its core (business), will raise concerns that the company is running out of investment opportunities in its core business, and have investors questioning why Wilmar is being used for this project.”
Singapore shares rose on Wednesday, but Wilmar International (WLIL.SI), the world’s largest listed palm oil firm, underperformed the broader market due to its property ventures in China that traders said deviate from its main business.
By the midday break, the Straits Times Index (STI) <.FTSTI> was up 0.34%, or 10.72 points, at 3,150.57. Total value of shares traded in the morning session was $605.4 million, up from $461.5 million on Tuesday.
Wilmar (F34.SG) extends its fall, and is down 4% at $5.69 as investors take a dim view of the group’s foray into the property market.
DMG says “while the investment amount of US$134 million ($176 million) is small…and we have no doubt about the eventual profitability of the project…the entry into the property market represents Wilmar’s first ever deviation from its core agribusiness.” House fears this could mark the start of a “loss of business focus and corporate discipline.”
