Market Insights
UOB peaks above $39 while Seatrium slips; MAS surprises with $5b plan to invest in S’pore stocks
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UOB shares hit an all-time high, after reporting $6 billion in net profits for 2024, driven by strong fee, trading and investment income.
PHOTO: ST FILE
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SINGAPORE – UOB shares hit an all-time high of $39.20 last week, buoyed by record net profits in 2024 and treats for shareholders in the form of dividends.
The Singapore bank on Feb 19 reported $6 billion in net profits for 2024
It declared a higher final dividend of 92 cents per share for the second half of 2024, up from 85 cents the year before, bringing its full-year dividend to $1.80 per share, representing a payout ratio of about 50 per cent.
UOB also proposed a special dividend of 50 cents per share to be paid over two tranches in 2025, returning $800 million in excess capital to shareholders to mark its 90th anniversary in 2025.
A $2 billion share buyback plan, where UOB shares will be purchased by the bank and subsequently cancelled, was also announced.
Buybacks are another way for a company to return capital to shareholders, alongside dividends. By repurchasing and cancelling shares, the total number of shares available decreases, potentially increasing their value.
The bank’s deputy chairman and chief executive Wee Ee Cheong told a press conference on Feb 19 that he expects the bank’s revenues to continue growing as returns from its regional investments, including the acquisition of Citigroup’s consumer banking business in Asean, kick in. He acquired 200,000 UOB shares on Feb 19 at an average price of $38.65 per share.
The bank closed the week at $38.38.
Meanwhile, Seatrium shares fell by more than 4 per cent to close at $2.38 on Feb 21, despite announcing its first full-year profit
The offshore and marine specialist posted a net profit of $157 million for 2024, bouncing back from a net loss of $2 billion the year before. It secured new orders worth $15.2 billion from new and repeat customers during the year, the highest new order wins in a decade.
Genting Singapore also fell after announcing its full-year results. It closed on Feb 21 at 75 cents, down 3.2 per cent after reporting a 5 per cent year-on-year drop in 2024 earnings to $578.9 million the day before. This was despite a 5 per cent rise in revenue to $2.5 billion for the period.
The company, which operates Resorts World Sentosa, said it is now evaluating and exploring diversification opportunities in Thailand, where conditional approval for draft legislation to legalise gambling and allow casinos to operate was granted on Jan 13.
Singapore Airlines (SIA) on Feb 20 reported a record quarterly revenue of $5.2 billion for the three months ended Dec 31, 2024.
Together with its budget airline Scoot, the group said it carried a record 10.2 million passengers during the period.
Still, the airline’s yields, or the amount earned per passenger for each kilometre flown, dipped owing to higher competition, while growth in the group’s passenger traffic lagged behind its new capacity, SIA said.
Its shares closed at $6.55, up 2 per cent, on Feb 21.
MAS surprises the market
Shares of the Singapore Exchange (SGX) closed the week flat at $12.80. However, this was before a slew of new measures to revitalise the stock market, endorsed by the Monetary Authority of Singapore (MAS), was unveiled after the market closed on Feb 21.
The moves came as a surprise to the market, and were described by Temasek chief executive Dilhan Pillay as “the most significant” changes in reforming the Singapore stock market in almost 30 years.
These measures include MAS allocating $5 billion to invest in local stocks
Mr David Gerald, president of the Securities Investors Association (Singapore), called the moves “brilliant” and “assuring for retail investors”.
“On the assumption that the selected funds will respond positively, this will create more interest among institutional and retail investors in the companies the funds are investing in. They can now rely on the well-researched information by the funds to make their investment choices,” he said.
The process of listing on the SGX will also be more disclosure-based and streamlined, making it more efficient and competitive with global hubs.
Listing suitability and reviews will also come under one regulator, Singapore Exchange Regulation, making the process simpler and clearer.
Still, corporate governance advocate Mak Yuen Teen warned in a LinkedIn post on Feb 22 that MAS’ measures do not address fundamental issues such as the poor quality of many listed companies before the channelling of the $5 billion into the market. They also do not prioritise fixing problems like lagging investor confidence and reviewing the SGX’s Catalist board for smaller, growing companies.
MAS said more measures, including a review of Catalist and expanding investor protection avenues
The announcements came after tax incentives and rebates to encourage companies and funds to list here were announced at Budget 2025 on Feb 18, with plans to extend and expand similar incentives for Singapore-listed real estate investment trusts.
Other market movers
Shares of AEM Holdings softened and closed at $1.51 on Feb 21. The shares had surged by over 5 per cent to $1.64
On strengthening Singapore’s enterprise ecosystem, PM Wong, who is also Finance Minister, cited AEM as an example of the Republic’s strong pipeline of promising companies and highlighted its critical role in the chip production process.
The Straits Times Index rose to a new high of 3,949.65 on Feb 19, a day after the Budget statement was delivered.
Several counters also hit all-time highs last week. Oiltek International, which services the oilseeds processing industry, hit a record $1.35 on Feb 18 after proposing to transfer from Catalist to the mainboard on Feb 17.
ST Engineering reached a record high of $5.11 on Feb 19, while Yangzijiang Shipbuilding hit a record $3.32 on Feb 20.
DBS Bank and OCBC Bank also hit all-time highs of $46.72 and $17.86, respectively, during the week.
What to look out for this week
The earnings season will continue this week, with a slew of companies scheduled to announce full-year results for 2024. These include Raffles Medical on Feb 24, OCBC and City Developments on Feb 26, and CapitaLand Investment, ST Engineering and Sembcorp Industries on Feb 28.
Also, watch out for volatility in the global and local markets, with the US due to release gross domestic product (GDP) data for the October-December 2024 quarter on Feb 27. Changes in GDP are the most popular indicator of the nation’s overall economic health.
US personal consumption expenditures (PCE) data will be out on Feb 28. Released on a monthly basis, the PCE index measures changes in the prices of goods and services purchased by US consumers.
It is also the Federal Reserve’s preferred gauge of inflation.
