Welcome to this week’s edition of top stock market highlights.
Wilmar International (SGX: F34)
Wilmar announced that its wholly-owned subsidiary, Lence Pte Ltd, has entered into an agreement with Adani Commodities LLP (ACL) to acquire a 31.06% stake in Adani Wilmar Limited (AWL).
Wilmar and Adani Commodities are in a joint venture where ACL and Lence each holds 43.94% of AWL, making it an aggregate total of 87.87% of the company.
The remaining 12.13% stake is in the hands of public shareholders.
However, under the rules of the stock exchange of India, AWL is required to maintain a minimum public free float of 25%.
The agreement states that both Wilmar and ACL will explore and evaluate potential alternatives to comply with relevant laws and expedite the sale and purchase of shares.
AWL is India’s largest edible oils and food company and owns 24 factories in 15 cities along with an extensive distribution network of more than 10,000 distributors with 720,000 retail outlets across India.
India is projected to enjoy strong economic growth of 7% for its GDP and together with countries such as Bangladesh, Sri Lanka and Pakistan, offer significant growth potential for Wilmar’s agri-food business.
AWL looks set to capture more market share by leveraging Wilmar’s global operations and distribution network.
With AWL also exporting rice, castor oil, and oleo chemicals to over 30 countries, having a strong presence in India will help Wilmar to better source for these commodities and improve its trade flows.
Alibaba Group (SGX: HBBD)
Alibaba is forming a joint venture for its South Korean operations and partnering with E-Mart’s (KRX: 139480) e-commerce platform to do so.
AliExpress International, under Alibaba, and Gmarket, under E-Mart, will create a 50-50 joint venture.
Both companies plan to make further investments in the joint venture, which could be valued as much as US$4 billion.
Meanwhile, both Gmarket and AliExpress Korea will continue to operate their platforms independently.
This deal can help Alibaba to fend off its local rivals which include Naver Corp (KRX: 035420) and Coupang (NYSE: CPNG).
Alibaba is attempting to grow its international footprint to compensate for slower growth in its core Chinese e-commerce market.
The company’s domestic e-commerce business experienced tepid growth for the September 30 quarter and is struggling to grow as competitors such as PDD (NASDAQ: PDD) and ByteDance grow stronger.
Because of this slowdown, the e-commerce behemoth is now integrating its domestic and international e-commerce operations and is selling off non-essential holdings.
Just last week, Alibaba sold its Intime department store business to Youngor Fashion for close to US$1 billion and will record a loss of RMB 9.3 billion.
Singapore Post (SGX: S08)
Singapore Post, or SingPost, is embroiled in a whistleblower saga which saw the group terminate the employment of its CEO, CFO, and the CEO of one of its key business units.
The postal group has released additional information on its investigation and disciplinary process after receiving queries from stakeholders.
Based on the timeline provided, Phase One relates to the practice within the International Business Unit (IBU) where the delivery failure (“DF”) status code was manually keyed in for a significant number of parcels which SingPost agreed to deliver.
After the investigations concluded for this phase, three staff from IBU Ops were terminated and a police report filed.
A confidential settlement amount was also agreed on with the customer, which was not named.
Phase Two involves the three key executives who made “serious misrepresentations” concerning the whistleblowers’ allegations to the Audit Committee.
These assertions stated that:
- There was no evidence of data manipulation and wrongdoing in relation to these manual “DF” entries,
- There was no evidence of falsification to avoid penalties from the customer,
- The purpose of these manual entries was not to avoid contractual penalties,
- This practice of manual DF entries would not attract any liabilities and was requested by the customer,
- The customer was fully aware of the assumptions of the manual DF entries and that such practice was in line with industry practice.
SingPost also clarified that it received the first whistleblower report on 17 January 2024 and this was also when investigations commenced, led by the Group Internal Audit with oversight from the Audit Committee.
On 28 February 2024, a second whistleblowing report was received which was addressed to IMDA (Infocomm Media Development Authority) and copied to SingPost.
By 12 June, the investigations into the manual DF entries had concluded and three staff from IBU Ops were dismissed.
Disciplinary proceedings commenced against the CEO, CFO and the CEO of IBU on 11 November 2024.
By 21 December, the three key management executives’ employment was terminated with immediate effect.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
