SG Morning Highlights | OCBC Defends Great Eastern Offer, Says It Represents a "Meaningful Premium"

Moomoo News SG wrote a column · Jun 28, 2024 09:09

SG Morning Highlights | OCBC Defends Great Eastern Offer, Says It Represents a "Meaningful Premium"

Good morning mooers! Here are things you need to know about today's Singapore markets:

●Singapore shares opened higher on Friday; STI up 0.04%

●Singapore's Manufacturing Output Rebounds 2.9% in May, Led by Electronics

●Singapore's Prime Office Rents Pause After Three Years of Non-Stop Growth: CBRE

●Stocks to watch: OCBC, Great Eastern

●Latest share buy back transactions

-moomoo News SG

Market Snapshot

Singapore shares opened higher on Friday. The $FTSE Singapore Straits Time Index (.STI.SG)$ rose 0.05 percent to 3344.92 as at 9:07 am.

Advancers / Decliners is 77 to 46, with 69.31 million securities worth S$79.41 million changing hands.

Breaking News

Singapore's Manufacturing Output Rebounds 2.9% in May, Led by Electronics

Singapore's manufacturing output surprised with a 2.9% YoY increase in May, rebounding from a 1.2% drop in April, thanks to the strong performance of the electronics sector. Data from the Economic Development Board (EDB) showed that manufacturing output was still down 0.8% YoY for the January to May period, despite last month's rebound. Excluding biomedical manufacturing, which contracted 42.6% YoY, the output would have risen by 10.1% YoY, according to the EDB. Electronics did most of the heavy lifting with the sector's output recording a 20% YoY jump last month, driven by rising orders. The chemicals segment also went up 7.9% YoY mainly due to the double-digit growth in petroleum and petrochemicals. However, general manufacturing declined 4.4% last month, while biomedical manufacturing contracted by 24.5% YoY in the first five months of 2024.

Singapore's Prime Office Rents Pause After Three Years of Non-Stop Growth: CBRE

The rents of Grade A offices in Singapore's core central business district (CBD) have held steady at $11.95 psf per month in the second quarter, pausing after rising non-stop for the past 12 quarters, according to CBRE. The property agency said that Grade A office rents had already risen by 14.9% over the past three years, but rental growth for this quarter has been tempered by the surge of incoming new supply and a temporary increase in vacancies. CBRE also said that firms in the legal sector and some of China's tech giants were the biggest demand drivers of workspace in Singapore's core CBD. The property agency kept its rental growth forecast unchanged at 2% to 3% for the full year 2024.

Stocks to Watch

$OCBC Bank (O39.SG)$: OCBC has defended its offer price of $25.60 a share in the bid to take its insurance arm, $Great Eastern (G07.SG)$, private, stating that it represents a "meaningful premium" for shareholders. OCBC made a $1.4 billion bid on May 10 to take GE private following shareholder unhappiness over falling returns. Independent financial adviser Ernst & Young Corporate Finance has since labelled the offer "not fair but reasonable," while the Securities Investors Association (Singapore), or Sias, urged OCBC to consider shareholder requests to table three proposed resolutions concerning the undervaluation of GE shares. OCBC head of investor relations, Collins Chin, noted that the offer price is at a 36.9% premium to the last traded price and a 41.9% premium to the six-month volume-weighted average price. He added that OCBC's intention to increase its investment in GE is not new, as the bank first made an offer in 2004, then again in 2006.

$Wing Tai (W05.SG)$: Winchamp Investment, a wholly owned subsidiary of Wing Tai Holdings, has been awarded a 99-year leasehold residential site in River Valley at the tender price of approximately S$464m, and plans to build over 400 apartments there. The site, located at the junction of River Valley Green and River Valley Road, has a permissible gross floor area of 32,527 sq m, according to Wing Tai in a filing to the Singapore Exchange on June 27. The Urban Redevelopment Authority is the awarding agency of the land parcel of about 9,300 sq m.

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