Healthcare stocks going strong in a weak market

Cordlife Group, one of the stellar performers in the healthcare sector, jumped 63.4 per cent or 56.5 cents to $1.455 as of Dec 31. Other star performers were cleanroom products maker Riverstone Holdings, Q&M Dental Group (Singapore) and Biosensors In
Cordlife Group, one of the stellar performers in the healthcare sector, jumped 63.4 per cent or 56.5 cents to $1.455 as of Dec 31. Other star performers were cleanroom products maker Riverstone Holdings, Q&M Dental Group (Singapore) and Biosensors International.PHOTO: CORDLIFE

Sector was top performer on local bourse, rising 11.8 % as of Dec 29

While the local bourse may need a transfusion, healthcare stocks were in the pink of health.

Healthcare was the strongest sector of all primary listings on the Singapore Exchange last year. The SGX Healthcare Index, which comprises 29 constituents with a combined market capitalisation of $31.6 billion, rose 11.8 per cent as at Dec 29.

Cleanroom products maker Riverstone Holdings, Cordlife Group and Biosensors International were among the stellar performers.

Riverstone racked up a whopping 146 per cent jump from Dec 31, 2014, to $2.40 as of Dec 31. It has been a great ride for the distributor of rubber gloves and face masks, noted UOB KayHian, which downgraded its call to hold from buy.

"While we think that the fundamentals remain intact, much of the positives have been priced in, including the capacity expansion and currency gains from a weak ringgit," Mr Andrew Chow, head of research at UOB KayHian, said.

Q&M Dental Group (Singapore) jumped from 41.5 cents on Dec 31, 2014 to 70 cents as of Dec 31, a surge of 69 per cent.

Maybank Kim Eng, which maintained a buy call on the group, sees "great value in its ability to attract more players in Singapore and China to join its family".

The acquisitions of TP Dental Surgeons and Tiong Bahru Dental Clinic in September are two examples, said analyst John Cheong.

Cordlife Group jumped 63.4 per cent or 56.5 cents to $1.455 as of Dec 31.

With a cash pile of nearly $100 million, Cordlife can now speed up expansion plans to include new products and embark on more joint ventures and mergers and acquisitions, Mr Cheong said.

Neptune Orient Lines and Tiger Airways were also among the year's best performers, thanks to buyout offers.

NOL surged 46 per cent or 39 cents to $1.23 last year following French shipping firm CMA CGM's $3.38 billion deal to buy the Singapore shipping line.

Singapore Airlines' offer to take over Tiger Airways sent the budget airline's shares up nearly 55 per cent to 41 cents as of Dec 31.

Precision engineer Interplex Holdings shot up 38 per cent to 78.5 cents after a takeover offer from The Baring Asia Private Equity Fund, while Biosensors International's buyout by a unit of the Citic Group sent the coronary stent maker up 38 per cent to 81 cents as of Dec 31.

On the flip side, the worst performers last year were offshore marine and energy plays, thanks to plunging oil prices.

Ezra Holdings plunged 69 per cent to 9.9 cents as of Dec 31 followed by Noble Group, which lost nearly 65 per cent to 40 cents after its credit rating was slashed to junk status by Moody's Investors Service due to concerns over its liquidity, profitability and cash flow amid a commodities rout.

Financial woes took their toll on Pacific Andes Resources Development (PARD), which plunged 60 per cent to the last traded price of 2.2 cents. Trading in PARD, the parent of beleaguered China Fishery, was suspended as of Nov 28 as both companies are under an investigation over an alleged offence under the Securities and Futures Act.

Sembcorp Marine, already a casualty of the industry slowdown, is further weighed down by an ongoing anti-corruption probe in Brazil. Not surprisingly, the rigbuilder is among the top losers by percentage loss, sinking 46 per cent or $1.51 to $1.75 as of Dec 31.

A version of this article appeared in the print edition of The Straits Times on January 01, 2016, with the headline 'Healthcare stocks going strong in a weak market'. Print Edition | Subscribe