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Top Stock Highlights of the Week: SGX-Temasek, Singtel and Keppel Corporation

·4-min read

Here are some corporate updates from three blue-chip companies.

Singapore Exchange Limited (SGX: S68)

Singapore Exchange Limited, or SGX, has announced a slew of initiatives to boost participation in the local stock market and help promising companies raise funds for growth.

First off, SGX and the Stock Exchange of Thailand (SET) are setting up a depository receipt (DR) linkage between the two exchanges.

DRs that represent shares of an SGX-listed security will be issued for trading on the SET, and vice versa.

This DR linkage will help to facilitate the trading of stocks that are listed on both exchanges through each country’s local brokers and in their home currency.

At the same time, the DR system will also adhere to home market rules and regulations.

This linkage greatly increases the investment choices available to investors in both countries, and should hopefully help to boost trading volumes on both bourses.

Meanwhile, the government announced a raft of measures yesterday to support high-growth companies in raising capital on the local exchange.

Four major initiatives were announced. 

The first is the establishment of a co-investment fund named Anchor Fund @ 65 that will help fast-growing companies to IPO in Singapore.

This news follows a Bloomberg report stating that Temasek and GIC are both chipping in to pump money into the local bourse.

Next, a Growth IPO Fund will be set up to assist late-stage private companies to head for an eventual listing.

The government’s existing Grant for Equity Market Singapore (GEMS) scheme will be enhanced to further advance equity research to help investors make more informed investment decisions.

And finally, SGX’s Strategic Partnership Model will help to develop customised solutions for high-growth companies to enable not just fund-raising, but also to build liquidity and find suitable global investors.

These multiple initiatives will take time to drive higher volumes through the exchange but are promising for SGX as they complement the bourse operator’s efforts at attracting more clients and investors to its platform.

Singtel (SGX: Z74)

Elsewhere, the Indian government has announced reforms to support its battered telecommunication companies (telco).

Bharti Airtel, Singtel’s associate, welcomed the change.  

A relief package has been proposed that should ease the pressure off Bharti and allow for more sustainable growth for the sector.

India’s digital economy is growing rapidly and Bharti is well-placed to be a key beneficiary, thereby benefiting Singtel as well.

Singtel’s ambition is to leverage on its 5G network to boost its business and is seeking to also unlock value for shareholders through a strategic review.

The Indian government will redefine what “adjusted gross revenue (AGR)” means, resulting in significantly lower AGR payments from telcos.

Singtel’s CFO Arthur Lang has called this move a “game-changer” that will free up significant amounts of free cash flow for the telco.

This piece of good news should relieve pressure on Bharti and also reduce the magnitude of future capital commitments from Singtel.

Keppel Corporation Limited (SGX: BN4)

Keppel announced that its subsidiary and infrastructure unit, Keppel Infrastructure Holdings (KI), has signed an exclusive agreement with Electricite Du Laos (EDL) to jointly explore opportunities to import renewable energy into Singapore.

This news is a clear signal that Keppel is making progress on its pivot towards renewable energy.

Under this agreement, EDL will export around 100 MW of renewable hydropower from Lao to Singapore via Thailand and Malaysia.

In addition, Keppel Electric (under KI) and EDL will also collaborate on other opportunities for greener forms of energy to support ASEAN’s renewable energy sector.

The trial electricity supply is set to commence once all technical, legal and regulatory requirements are finalised by the governments of all four countries.

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Disclaimer: Royston Yang owns shares of Singapore Exchange Limited.

The post Top Stock Highlights of the Week: SGX-Temasek, Singtel and Keppel Corporation appeared first on The Smart Investor.

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