Maybank Kim Eng is maintaining a “buy” on Singapore-listed glovemakers Riverstone and UG Healthcare with target prices of $1.18 and 52 cents respectively.
Maybank is excited by news that Top Glove, the world’s largest glovemaker, is planning a secondary listing in Singapore to boost trading liquidity.
With its substantial shareholder, Top Glove is exploring the sale of about $20 million worth of shares on the Singapore Exchange. No new shares will be issued. The exercise is expected to be completed by 3Q16.
In a Wednesday report, analyst John Cheong says the move could pan out well for Riverstone and UG Healthcare as they are trading at a notable 25% discount in terms of forward P/E versus the Malaysia-listed ones due to lack of news flow and understanding of the sector. Malaysia has seven listed glovestocks.
“We could see more news flow and perhaps more glovemakers listing on the SGX. It makes sense since the glovemakers export globally and Singapore fits in as a widely recognised financial hub and politically stable nation,” says Cheong.
As for Top Glove itself, the secondary listing is expected to have a “neutral” impact on the stock as the move will hardly help to boost the stock’s liquidity as there is already ample liquidity in Malaysia.
“IHH is a good case in point, its trading volume has remained low in Singapore, since its dual listing in 2012. The beneficiaries will be the investment bankers and perhaps the substantial shareholder that will be selling its stake,” says Cheong.
As at 9.25am, UG Healthcare is trading 8.33% higher at 32 cents while Riverstone is up 1.02% at 99 cents.
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Maybank is excited by news that Top Glove, the world’s largest glovemaker, is planning a secondary listing in Singapore to boost trading liquidity.
With its substantial shareholder, Top Glove is exploring the sale of about $20 million worth of shares on the Singapore Exchange. No new shares will be issued. The exercise is expected to be completed by 3Q16.
In a Wednesday report, analyst John Cheong says the move could pan out well for Riverstone and UG Healthcare as they are trading at a notable 25% discount in terms of forward P/E versus the Malaysia-listed ones due to lack of news flow and understanding of the sector. Malaysia has seven listed glovestocks.
“We could see more news flow and perhaps more glovemakers listing on the SGX. It makes sense since the glovemakers export globally and Singapore fits in as a widely recognised financial hub and politically stable nation,” says Cheong.
As for Top Glove itself, the secondary listing is expected to have a “neutral” impact on the stock as the move will hardly help to boost the stock’s liquidity as there is already ample liquidity in Malaysia.
“IHH is a good case in point, its trading volume has remained low in Singapore, since its dual listing in 2012. The beneficiaries will be the investment bankers and perhaps the substantial shareholder that will be selling its stake,” says Cheong.
As at 9.25am, UG Healthcare is trading 8.33% higher at 32 cents while Riverstone is up 1.02% at 99 cents.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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