A quiet week with little direction from Wall St

Date: December 30, 2024

• The STI rebounded 52 points or 1.4% to 3,771.63
• Average daily volume in the holiday-shortened week was only S$509m
• Despite Friday’s selling, US indices all gained for the week
• SingPost sacked 3 key execs, shares take a beating
• SingPost’s A$1b sale of Aussie business on track: buyer
• TalkMed received privatisation offer at S$0.456 per share
• Seatrium in play after contract win
• Popiah king Sam Goi sold Envictus stake
• Nov’s factory output grew 8.5% but below the expected 9.7%

 

The STI chalked up a 1.4% rebound after previous week’s 2.4% loss

Given the Christmas holiday period it was perhaps only to be expected that trading in the local market was relatively muted, although the Straits Times Index did manage to rebound 52 points or 1.4% to 3,771.63. It had fallen 91 points or 2.4% the previous week.

Average trading volume over the four sessions was S$509m versus S$1.18b the week before.

Over in the US there were not many fresh market-moving developments, other than Friday’s slide. However, the major indices still managed to close higher – the Dow Jones Industrial Average rose 1.65%, the S&P 500 gained 2.2% and the Nasdaq Composite added 2.8%.

SingPost sacked 3 key execs, share price takes a beating

Singapore Post (SingPost) terminated the employment of three of its senior management staff as they were found to be negligent in the handling of internal investigations over a whistleblower’s report that it received earlier this year.

The employment of group chief executive Vincent Phang, group chief financial officer Vincent Yik, and the chief executive of the company’s international business unit (IBU) Li Yu were terminated with immediate effect on Dec 21, 2024.

SingPost said it had received a whistleblowing report relating to its non-regulated international e-commerce logistics parcels business earlier this year. Investigations by the company into the report found that three managers in the IBU had “committed serious breaches of the company’s code of conduct” for deliveries for “one of its largest” customers.

They had performed or approved manual updates of the “delivery failure” status code for parcels SingPost had agreed to deliver – without supporting documents and even though no delivery attempt had been made.

The employment of these three individuals was terminated earlier, and the company has also made a police report against them.

The company said that in the course of internal investigations, external professional advisers were engaged to review and assess the matter independently of management, as the audit committee had “no assurance concerning management’s representations and handling of the internal investigations”.

An external law firm was subsequently engaged to review management’s conduct in the matter. SingPost found that the group CEO, group CFO and the CEO of the IBU were “grossly negligent” in the handling of the internal investigations, and had not considered material facts that compromised their decision-making and/or failed to perform their duties responsibly and reliably.

SingPost has informed the customer about the whistleblowing report and the findings. They have agreed on a settlement under which, among others, the company would pay a settlement sum in lieu of the penalties.

The company does not expect the settlement to have a material impact on its net tangible assets or earnings per share for the current financial year.

On Monday, the first trading day after the announcement, SingPost’s shares crashed S$0.06 or 10.7% to S$0.50 on volume of 91 million. They finished the week at S$0.52.

All three sacked executives have said their terminations are without merit and that they will be contesting SingPost’s actions.

SingPost’s A$1b sale of Aussie business on track

On Wednesday, the Business Times reported that SingPost’s proposed A$1b sale of its Australian logistics business to private equity firm Pacific Equity Partners (PEP) is not affected by the departure of the three SingPost senior executives.

According to BT, a PEP gave this confirmation when approached. The sale, which was announced earlier this month, requires shareholder approval at a meeting expected to be convened in February.

TalkMed received privatisation offer at S$0.456 per share

Healthcare provider TalkMed Group announced that it has received a privatisation proposal from TW Troy, a special purpose vehicle managed by Tamarind Health.

The offer by TW Troy is made by way of scheme of arrangement. It is offering S$0.456 in cash per scheme share. This represents a 20% premium to the last traded price of S$0.38 on Apr 5.

The offer price is also 629.6% higher than TalkMed’s net asset value per ordinary share of S$0.0625 as at Jun 30, according to the company’s last published financial statements.

TalkMed is a mainboard-listed company providing medical oncology, stem cell transplants and palliative care services. It has operations in Singapore and the region.

Seatrium in play after contract win

On Thursday Seatrium topped the gainers’ list with an S$0.08 jump to S$2.04 on volume of 35 million done after announcing that it had won a contract to perform engineering, procurement, construction and onshore commissioning work for a deepwater new-build production unit under BP Exploration and Production, a subsidiary of multinational oil and gas company BP.

The shares ended at S$2.05 on Friday.

Popiah king Sam Goi sold Envictus stake

Envictus International, a Malaysian food and beverage group on Thursday was the day’s most active counter when it fell S$0.01 to S$0.335 on turnover of 38.8m.

There was a change in substantial shareholding in the mainboard company that was reported on Monday – Singapore “popiah king’’ Sam Goi and his private firm Tee Yih Jia Food Manufacturing sold their total stake of about 30%. Mr Goi is a non-executive director and vice-chairman of Envictus.

Envictus’s shares started the year at S$0.29, which means up to Thursday, they had risen S$0.055 or 19% year-to-date.

According to the Business Times, some of the stakes were acquired by substantial shareholder and executive chairman Jaya JB Tan (up from 24.23 to 27.42% including deemed interest), one Tan Boon Seng (12%) and JAG Capital Holdings.

Malaysia’s Plantation Industries and Commodities Minister Johari Abdul Ghani has a deemed interest of 9.57% by virtue of his JAG shareholding.

Envictus’s shares closed the week at S$0.345.

Nov’s factory output grew 8.5% but below the expected 9.7%

Singapore’s factory output grew 8.5% year-on-year in November, outpacing the previous month’s growth of 1.2%. This came as output in the key electronics sector surged, though gains were offset by the volatile biomedical manufacturing sector.

The month’s performance fell short of private-sector economists’ expectations, who had predicted a 9.7% expansion in a Bloomberg poll. Excluding the volatile biomedical manufacturing sector, industrial production was up 13%, accelerating from October’s 0.4% growth.

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