Institutions were net sellers of Singapore stocks over the four trading sessions spanning August 2 through to August 7, with S$586 million of net institutional outflow. The four sessions also saw 12 primary-listed companies conduct buybacks with a total consideration of S$20.4 million. 

The 5.0 per cent STI decline over the four sessions was in-line with the FTSE All World Asia Pacific Index, which declined 5.2 per cent in SGD terms. The global cross-asset repositioning on the back of the Bank of Japan hike, concerns on US growth and a pick up in the rotation pace from the global technology sector were the main global market drivers. At the same time, the local earnings and subsequent corporate outlooks also impacted local flows.

Like the preceding week, Singapore Airlines led the buyback consideration tally over the four sessions, acquiring 2 million shares at an average price of S$6.00 per share. Digital Core REIT Management also acquired units of Digital Core REIT over each of the four sessions.

Leading the net institutional outflow over the four sessions were DBS Group Holdings, Oversea-Chinese Banking Corporation, Singapore Airlines, United Overseas Bank, Seatrium, Keppel, Golden Agri-Resources, Mapletree Industrial Trust, Genting Singapore and Yangzijiang Shipbuilding (Holdings).

Meanwhile, Singapore Telecommunications, Singapore Exchange, Wilmar International, Keppel DC REIT, SATS, ComfortDelGro Corporation, Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, Singapore Technologies Engineering and Capitaland Ascendas REIT led the net institutional inflow.

The four trading sessions saw around 50 director interests and substantial shareholdings filed for just over 20 primary-listed stocks. Directors or CEOs filed 13 acquisitions, and no disposals, while substantial shareholders filed four acquisitions and three disposals. 

Digital Core REIT

On August 5, Cohen & Steers Capital Management purchased 3,640,500 units in Digital Core REIT, which increased its deemed interest in the REIT from 7.87 per cent to 8.14 per cent. The average price paid was US$0.58 per unit. This follows on from Cohen & Steers Capital Management increasing its deemed interest in Digital Core REIT to above the 5 per cent substantial shareholder threshold back on 1 February, then above the 6 per cent threshold on February 14. Based on filings, that interest then oscillated around 7 per cent between late February and early July.

For its 1HFY24 (ended June 30), Digital Core REIT reported its gross revenue on a same-store basis saw a slight decline of 0.6 per cent from 1HFY23, to US$48.2 million. Note the same-store basis excludes the contributions from the 2401 Walsh Avenue and 2403 Walsh Avenue properties that were divested in January 2024. 

Property expenses rose marginally by 0.3 per cent to US$17.5 million, primarily because of higher property taxes and other expenses, mitigated by reduced utilities costs. Consequently, net property income on a same store basis fell by 1.1 per cent to US$30.6 million. Excluding straight-line rent effects, 1HFY24 cash net property income was up by 1.3 per cent from 1HFY23 to US$30.3 million. 

In March 2024, Digital Core REIT completed the purchase of an additional 10 per cent stake in an Osaka data center from Mitsubishi Corporation for ¥7.725 billion (US$51.5 million), securing a 1 per cent discount on the appraised value. The following month, Digital Core REIT acquired a further 24.9 per cent share in its Frankfurt Facility from Digital Realty for €117.0 million (US$128.7 million), at a 6 per cent discount to the appraised value. The Manager noted that both transactions enhanced Digital Core REIT’s portfolio quality and improved geographic diversification as well as customer credit quality.

The Manager also noted that Digital Core REIT repurchased a total of 14.6 million units at an average price of US$0.57 in the first half of the year that were held as treasury units and were subsequently cancelled. The Manager added that the average repurchase price was nearly a 15 per cent discount to NAV, resulting in a 100 basis points increase in DPU accretion, while adding less than 60 basis points to leverage.

Raffles Medical Group

Between August 1 and 6, Raffles Medical Group executive chairman Loo Choon Yong acquired 3.60 million shares at an average price of S$0.923 per share. This increased his total interest from 54.94 per cent to 55.14 per cent. Since, late February, Dr Loo has been gradually increasing his total interest in the stock from 53.02 per cent. 

Raffles Medical Group noted with its 1HFY24 financial results on 29 July that it was expanding the Raffles brand of care in Japan. In June, the Group expanded its healthcare services by opening a second medical centre in Hakata, Fukuoka. This centre aims to provide trusted quality care to locals, expatriates, and tourists, offering services in family medicine, health screening, travel medicine, internal medicine, and gastroenterology. It complements the Group's first medical centre in Osaka, operational since September 2015.

 Beng Kuang Marine 

 On August 6, Beng Kuang Marine CEO Yong Jiunn Run acquired 200,000 shares at an average price of S$0.205 per share. With a consideration of S$41,000, this took his direct interest in the company from 4.99 per cent to 5.10 per cent His preceding acquisition on the open market was on Feb 29, with 1.1 million shares acquired at an average price of S$0.07 per share.

On August 5, Beng Kuang Marine reported its 1HFY24 (ended June 30) revenue surged 88.1 per cent from 1HFY23, to S$59.9 million. Beng Kuang Marine operates two core business divisions that include Infrastructure Engineering and Corrosion Prevention, in the marine and offshore energy industries. The Infrastructure Engineering division is the main revenue contributor, accounting for S$50.1 million or 83.6 per cent of the 1HFY24 revenue.

The Group’s 1HFY24 gross profit also increased 153 per cent from 1HFY23, to S$21.3 million. This saw the 1HFY24 net profit reach S$14.4 million that exceeded FY2023 net profit of S$7.9 million. Note that with the completion of the second partial land sale in January 2024, the Group also recognised a one-off gain of S$5.53 million in 1HFY24.

Mr Yong attributed the 1HFY24 results to the Group’s asset-light, service-focused approach in the oil and gas sector, and the strategic overhaul implemented since 2021. Mr Yong’s responsibilities include making key corporate decisions, formulating and guiding the company's strategic direction, and implementing business plans and strategies. He has served as CEO of CIMB Group Commercial Banking, Senior MD of CIMB Commercial Banking Singapore, and director of CIMB Cambodia PLC. Before joining CIMB, he was the Business Head for Global Enterprise Banking at OCBC. With over 30 years of experience in corporate and commercial banking, he began his career at BNP Paribas.

The Group's strategic initiatives to rationalise and streamline operations, coupled with the discontinuation of loss-making activities, have progressively enhanced the gross profit margin to 35.5 per cent in 1HFY24, up from 26.3 per cent in 1HFY23. Since Beng Kuang Marine was added to the SGX Watch-List under the Financial Entry Criteria in June 2023, the share price of the stock has moved from S$0.082 to S$0.21 as of 7 August.

With the 1HFY24 results, the Group has proposed a bonus issue of up to 59,763,121 warrants, allocation of 3 Bonus Warrants for every 10 existing shares held by shareholders on a forthcoming record date. Each Bonus Warrant entitles the holder to subscribe for one new share at an exercise price of S$0.22 per share. Beng Kuang Marine is applying to the SGX-ST for approval to deal in, list, and quote the Bonus Warrants and New Shares, with an announcement regarding the outcome of this application to be made in due course.

Guided by its 2.0 business model, together with further targeted business development, the Group aims to build a stronger foundation to expand its value propositions and increase its operational scale within the oil & gas industry globally.

SunMoon Food Company

Between August 2 and 7, SunMoon Food Company non-independent and non-executive director Song XiaoJun acquired 1,873,900 shares at S$0.016 per share. This increased his direct interest in the company from 1.64 per cent to 1.94 per cent.

He is also deemed interested in 13.84 per cent of the shares in SunMoon, held by Champion Financial (Hong Kong), bringing his total interest to 15.78 per cent.

Mr Song is experienced in supply chain management and has held management positions in this industry for close to 10 years. He also has relevant experience in the food services business since year 2020 and is currently the director of Champion Financial (Hongkong).

Inside Insights is a weekly column on The Business Times, read the original version.

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