Market Insights
S’pore stocks rise; OCBC jumps after chairman justifies $1.4b takeover offer for Great Eastern
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The Straits Times Index closed April 17 at 3,720.33 points, up almost 6 per cent through the week, even as volatility persisted in global markets in response to US tariffs.
PHOTO: BT FILE
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SINGAPORE - Local stocks jumped last week. The Straits Times Index on April 17 closed at 3,720.33 points, up almost 6 per cent through the week, even as volatility persisted in global markets in response to tariffs by the US.
The benchmark blue-chip index rebounded despite Deputy Prime Minister Gan Kim Yong warning
Mr Gan on April 16 spoke at the first meeting of a team of ministers and industry experts tasked with helping local businesses and workers cope with the impact of the US tariffs.
OCBC jumps after chairman defends GE takeover
OCBC Bank was among the gainers on the index last week, rising 6.5 per cent to close the week at $15.98.
The stock jumped almost 2 per cent on April 17, when the bank addressed questions on why OCBC is raising its stake in Great Eastern (GE) and if the $1.4 billion it has offered to buy up the insurer’s shares is appropriate.
Speaking on April 17 at the bank’s annual general meeting (AGM) for the financial year ended 2024, OCBC chairman Andrew Lee emphasised that GE directly contributes nearly $1 billion in annual profit to OCBC and plays a growing role in the bank’s earnings.
OCBC, which has had a controlling stake in the insurer for almost three decades, now owns 93.7 per cent of GE.
Mr Lee said OCBC plans to double down on its strategy of combining banking, insurance and wealth management under one group, which has helped it become Singapore’s largest wealth manager with more than US$300 billion (S$392 billion) in assets under management.
That is what sets OCBC apart from its local peers DBS and UOB, which are pure-play banks, he said.
Mr Lee also addressed shareholders’ concerns over OCBC’s $25.60 per share offer price for the remainder of GE’s shares that it does not own, stressing that the price is “fair”.
“We are not blinking,” he said, adding that OCBC has paid “millions” to financial adviser JP Morgan Securities Asia to work out a suitable offer price and that the board has exercised its fiduciary duty in keeping strictly to that advice.
His comments were made amid pressure from some minority shareholders of GE, who say OCBC’s offer price is below what the insurer is worth and have refused to sell their shares, preventing OCBC from accumulating the 95 per cent stake in GE needed for compulsory acquisition and delisting.
Consequently, GE’s shares have been suspended from trading since July 2024, trapping shareholders in an illiquid stock. It now has until May 25 to restore a 10 per cent minimum free float on the stock exchange. OCBC has said it plans to seek GE’s delisting if the public float requirement is not met.
How this impasse is resolved could set a precedent for governance and minority shareholder rights in Singapore, at a time when central bank-led efforts are being taken to restore interest and confidence in the equity market here.
Olam, CapitaLand Investment rise on restructuring plans
Shares of food and agri-business firm Olam Group popped last week, rising 6.5 per cent through the week to close at 90.5 cents.
Olam said on April 14 that it would invest US$500 million in its prized food ingredients unit, ofi, before potentially listing it concurrently in Europe and Singapore to unlock value for its shareholders.
It did not provide a timeframe for the listings, saying this depends on market conditions, which are now volatile. Olam’s largest shareholder is Temasek.
Olam group chief executive Sunny Verghese said the company is restructuring its business to focus on ofi, which is among the world’s largest distributors of food products and ingredients such as cocoa, coffee, dairy, nuts and spices.
To fund its investment in ofi, Mr Verghese said Olam must first cough up US$2 billion to repay the debts of its remaining businesses so that they become self-sustaining, before eventually selling them.
Funds from Olam’s US$2.58 billion February sale of its agri-business unit, Olam Agri, to Saudi Arabia’s agricultural and livestock investment firm Salic, will also be tapped.
Mr Verghese added that there are also plans to progressively distribute proceeds from the sale of Olam’s other assets to shareholders via special dividends in the future.
Shares of another Temasek-backed company, CapitaLand Investment (CLI), also rose last week. The asset manager’s shares closed at $2.59 on April 17, rising 5.3 per cent through the week.
CLI on April 16 announced that it will list its first China real estate investment trust (Reit), CapitaLand Commercial C-Reit (CLCR), on the Shanghai Stock Exchange.
To start off, CLCR will hold two major CapitaLand malls in Guangzhou and Changsha valued at 2.8 billion yuan (S$504 million). CLI will support the future growth of CLCR with its pipeline of 43 malls across 18 cities in China.
The move is expected to increase CLI’s funds under management and help it generate more recurring fee income. It also aligns with CLI’s strategy of minimising its ownership of physical assets, which reduces capital expenditure and other risks.
CLI’s exposure to the China property market, which has struggled, has also led to a discount in how investors value the company, analysts said.
By repackaging more of its China malls into a separate Reit, CLI may reduce that discount and improve its overall market valuation.
Other market movers
Shares of LHN Group soared last week, rising 15 per cent to close at 46 cents after the real estate management services firm announced plans to list its co-living business Coliwoo Group on the Singapore Exchange.
LHN, which is dual-listed in Singapore and Hong Kong, said it has submitted applications in both exchanges for the proposed spin-off and separate listing of Coliwoo.
Automotive group Vin’s Holdings began trading on Catalist on April 15, making it the first company to go public on the SGX in 2025. Its shares made their debut at 31.5 cents a share, and traded as high as 37 cents before closing the week at 34.5 cents.
Q&M Dental announced after the market closed on April 17 that it is proposing a secondary listing on the main market of Bursa Malaysia. The move is expected to broaden its investor reach and base, as well as potentially increase the liquidity of its shares through separate trading platforms. It will also enable the group to access more platforms for fundraising.
If successful, Q&M could join semiconductor firms UMS Integration and Grand Venture Technology in seeking a separate listing in Malaysia in 2025.
Shares of the dental services chain closed the week at 28 cents, up 5.7 per cent.
What to look out for this week
City Developments (CDL), the property developer embroiled in a tussle for board control between executive chairman Kwek Leng Beng and his son, group CEO Sherman Kwek,
Based on the questions submitted by shareholders prior to the AGM, CDL’s board can expect to be quizzed on the widening gap between its share price and net asset value, as well as its corporate governance practices and leadership strategy.
Correction note: An earlier version of the story said that OCBC will not raise its offer price for GE. OCBC has clarified that it will not blink in its intentions for GE, not the price.
