Singapore Post makes solid debut on stock exchange

Singapore Post (SingPost), the postal unit of Singapore Telecommunications (SingTel), made solid gains Tuesday as the largest initial public offering (IPO) so far this year came to market, dealers said.

At the midday trading break at 12:30 pm (0430 GMT), SingPost closed at 63 Singapore cents (36.42 US cents), up from its issue price of 60 cents.

It was the most active stock with more than 95 million shares changing hands.

The main Straits Times Index was 1.11 points higher at 1,328.53.

SingTel will receive up to 684 million dollars from the sale of shares in the wholly-owned postal unit.

Analysts had predicted the stock would enjoy a small rise on its debut given the strong demand from investors but said any upside beyond 65 cents was unlikely as the SingPost was more of a dividend play.

“I don’t think investors were looking for a strong price rally after the IPO,” said an analyst from a foreign brokerage.

SingPost plans to recommend a total annual dividend of 80 million dollars for each of the financial years to March 2003 and March 2004, or 4.2 cents a share.

It made a net profit in the nine months to December of 82.5 million dollars (47.1 million US dollars), up from 81.9 million dollars in the same period a year earlier.

The share issue was nine times oversubscribed, prompting underwriters UBS Warburg and DBS Bank to exercise the option of allocating an additional 117 million shares to institutional investors.

SingTel’s stake in the postal unit is now cut to 40 percent after the IPO offering of 1.14 billion shares to investors.

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Singapore-SingPost-IPO-debut

SingPost Trading Begins
May 14, 2003 — Angela Tan, Business Times (Singapore): “Singapore Post shares rose as much as 8 per cent intraday in its first day of trading yesterday, hitting a high of 65 cents from its initial public offer price of 60 cents. The shares opened at 64 cents each and very quickly touched 65 cents before ending the day back at 64, a rise of 6.7 per cent. A staggering volume of almost 165 million shares changed hands, making SingPost the most actively traded stock. ‘Normally, one would see about 15-20 per cent of an issue size traded on the first day. This is within expectations,’ said a banker. SingPost’s chief executive William Tan said at the listing ceremony: ‘It gives us an idea that there is confidence from investors … Now we have to deliver.'”