Wednesday, March 2, 2016

Sing Post

Sing Post: (S$1.45) Issued legal notice to Sias
SingPost has issued a legal notice to shareholder activist group Sias, in relation to its involvement in sharing a defamatory anonymous letter it received with other parties.

This is likely to cause a continued overhang for the counter, which has fallen ~12% year to date and 25% since the beginning of 2015.

To recap briefly, SingPost is in the midst of a special audit to investigate an interested party transaction conducted in 2014, after finding out that independent director Keith Tay Ah Kee’s vested interests in Stirling Coleman Capital, the arranger for the acquisition of freight forwarding company FS Mackenzie, was not disclosed.

Until questions surrounding SingPost’s corporate governance are adequately answered, share price will likely remain in an overhang. As a preemptive and prudent move, the group might also write down some of the investments it has made in the past.

As a gauge, based on SingPost's historical average yield of 5.2%, a price floor at $1.31 is derived for SingPost, 10% below the current price.

Bloomberg consensus has 5 Buy, 4 Hold and 0 Sell ratings on the counter with average TP of $1.82.

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