Jardine Matheson Holdings, a 187-year-old conglomerate with more than US$42 billion (S$58 billion) in sales, has been among Singapore's steadiest stocks for years. Not so this year.
Bad luck first struck in January, when a flash-crash triggered by haphazard sell orders erased more than three-quarters of its value. That was a momentary blip, but the firm also faces more enduring problems.
It now has the dubious distinction of owning two of this year's biggest losers in a stock index where more than two-thirds of the shares are up. The companies, Dairy Farm International and Jardine Cycle & Carriage, do not have much in common besides their ownership - which would usually provide some protection against downswings, but not this year.
"Normally if you're a holding company, you go into very diverse businesses and expect one to do well while another does worse," said Mr Nicolas Van Broekhoven, a Singapore-based analyst at researcher Smartkarma, who has been following the Jardine companies for more than a decade. "Diversification isn't working."
Dairy Farm International is the biggest loser on the Straits Times Index this year, falling 15 per cent. The operator of convenience stores, drug stores and supermarkets in February reported that last year's profit had dropped by 77 per cent due to weakness in the food businesses and restructuring charges.
"Dairy Farm has been having operational issues," said DBS Bank analyst Alfie Yeo.
Cycle & Carriage, which has its own far-flung portfolio of South-east Asian business spanning car dealerships, palm oil processing and real estate, is down 6 per cent since the start of January. Profit fell by more than half last year and the company's main auto market, Indonesia, may grow more slowly this year, it said in February.
NOT ADDING UP
Normally if you're a holding company, you go into very diverse businesses and expect one to do well while another does worse... Diversification isn't working.
MR NICOLAS VAN BROEKHOVEN, an analyst, on Jardine's diversification.
Another Jardine-owned sprawler is Jardine Strategic Holdings, also down about 3 per cent this year. The firm owns stakes in Dairy Farm and Cycle & Carriage, along with shares of the parent, Jardine Matheson, which itself has dropped almost 11 per cent.
The Jardine Matheson group was founded in 1832 in Canton as a tea and opium trader. It eventually became one of the "hongs", or trading houses, that shaped Hong Kong's development. After moving its stock listing to Singapore in 1990, the group shifted its focus towards South-east Asia, where it now runs Pizza Hut restaurants, hotels and Mercedes-Benz dealerships.
"You can't really link one business to the other because they are all very diverse," said Smartkarma's Mr Van Broekhoven. "It is notable that all have lagged at the same time."