Welcome to the latest edition of top stock market highlights where we feature interesting snippets from corporate announcements, earnings, and business news.
Singapore Airlines Limited (SGX: C6L)
Singapore Airlines Limited, or SIA, is seeing clearer skies this year as air travel returns with a vengeance.
Passenger numbers for September clocked in at 2.1 million, up more than 13-fold from last September’s 159,700.
Late last month, the carrier announced that it will redeem the S$3.5 billion in mandatory convertible bonds (MCBs) in full.
SIA issued this tranche of MCBs back in March 2020 when the pandemic first broke out.
This redemption will be at 110.408% of the face value of the MCBs, meaning that SIA will cough up S$3.86 billion to fully redeem these securities.
It’s a prudent move by SIA as this batch of MCBs has a conversion price of S$4.84 per share and compared to the airlines’s current share price of S$5.16 per share, it is in the money now.
Should bondholders decide to convert the bonds into shares, it could result in significant dilution for the airline.
Temasek Holdings
Temasek Holdings has announced leadership changes this week in a surprising shake-up at the investment firm.
CFO Leong Wai Leng will step down and be replaced by deputy CFO Png Chin Yee.
Leong was CFO for Temasek for more than 16 years.
President Tan Chong Lee will also step down to lead investment unit 65 Equity Partners, while general counsel Pek Siok Lan is going on a sabbatical and then taking up a new role in July next year.
A spokesperson for Temasek released a statement saying that the above changes are part of “succession planning for key leadership positions”.
Yangzijiang Shipbuilding Holdings Limited (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, announced that the group had clinched its first two orders for two liquified natural gas (LNG) carriers.
The order was placed by a European customer and the vessels are slated for delivery between 2025 and 2026.
YZJ obtained the GTT licence just last month and these vessels will be the group’s first GTT Mark III LNG carrier order.
Management stated that these vessels are in high demand and YZJ intends to extend its foothold in this sector.
In the background, the International Energy Agency projects that global LNG trade will increase by 17% by 2025 from 2021 levels, thereby keeping demand high for LNG carriers.
YZJ prides itself on being the first non-state-owned shipyard in China to break into this lucrative market which was previously dominated by Korean shipbuilders.
With this contract, the group’s order book now stands at an all-time high of US$10 billion.
Cryptocurrency investments
On Wednesday, the Monetary Authority of Singapore (MAS) released a 35-page consultation paper that seeks to protect retail investors from the risks associated with cryptocurrency investments.
There are three key aspects that Singapore’s central bank is targeting.
These measures will apply to retail customers who are not accredited investors as the former are deemed to be less able to access professional advice and have fewer resources at their disposal.
The first regulation proposal prevents digital payment token service providers from providing credit facility, whether it is the form or fiat currencies or digital payment tokens.
The second is to implement customer knowledge assessments to gauge the level and experience of an investor who seeks to trade cryptocurrencies.
Service providers need to assess if retail customers are cognisant of risks such as fraud, theft, illiquidity, or sharp price fluctuations.
Thirdly, the MAS proposes that service providers be prohibited from dangling incentives such as free trading credits or digital payment tokens to entice customers to sign on with them.
In addition to these three proposals, MAS also wants service providers to properly segregate customer assets from company assets, and they should conduct daily reconciliations and provide customers with a statement of accounts every month at the minimum.
Based on feedback on these and other proposals, the central bank will then draw up a set of guidelines to further regulate the cryptocurrency arena. Feedback can be submitted anytime from now till 21 December.
Service providers have six to nine months to adhere to these new rules once they are implemented.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
