In a Wednesday report, lead analyst Eli Lee says the dip in Straits Trading’s 1Q revenue, mainly due to weaker contributions from the tin mining segment, was broadly within expectations – but nonetheless notes generally stable results for the quarter.
The analyst brings attention to the privatisation and delisting of ARA Asset Management Ltd was completed on April 12 this year – through which Straits Trading received $48.2 million in cash.
More importantly, Straits Trading is the only publicly-listed entity in Singapore to hold a significant stake of 20.95% in the privatised ARA, highlights Lee, who also notes its robust balance sheet.
(See also: Confirmed: John Lim-led consortium to buy out ARA Asset Management in $1.8 bil deal)
See also: OCBC's Lim raises her fair value for Boustead Singapore to $2.45
“The group’s asset management company, SRE Capital, was appointed on 28 Feb 2017 as the investment advisor to Nikko Asset Management Asia Ltd for the NikkoAM StraitsTrading Asia ex-Japan REIT ETF. As a seed investor in the ETF, Straits Trading stands to gain long-term recurring income and attractive risk-adjusted returns,” shares the analyst.
As at 11.45am, shares in Straits Trading are down by 2 cents at $2.31.
