Moving from the streets to Street estimates — one of Singapore’s larger research houses published a report earlier this month on a Mainboard-listed real estate player. Looking through the websites of JTC Corporation and public sector e-procurement portal GeBIZ, the analyst had noticed the listco’s top bid in two separate tenders, and proceeded to work out the potential upside to shareholders in a short report published Friday.
Unlike the closely watched government land sales (GLS) programme, where residential developers are awarded land plots just days after tenders close, the highest bidder in these tenders are not guaranteed an award and the evaluation process is expected to take a couple of months.
Following the weekend, an analyst from another major local house issued a similar report, outlining the potential cost and praising the possible addition to the company’s pipeline. This analyst added that they would “revisit our projections once tender is successful”.
In line with our focus on keeping investors informed on locally-listed stocks, The Edge Singapore carries a host of analyst reports on our website daily, along with more detailed analyses in print when analysts demur in their calls.
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Hence, it came as a surprise that an investor relations agency disagreed with our coverage of both reports.
Representing the real estate firm, the agency claimed that the first analyst report was inaccurate, and that the second report gave the impression that the company had put out an announcement in hopes of securing both tenders.
Note that both analysts had been reporting on publicly available information published online.
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Whether this anxiety came from the client or consultant is unclear, but the complaint gives rise to two concerns.
First, the move calls into question the integrity of the tenders, where bids are assessed on price and quality.
Second, it clouds the transparency that underpins fair and efficient capital markets here, especially at a time when market participants are drawing a link between better shareholder communication and greater liquidity on the local bourse.
The relationship between the media and communications agencies is traditionally an adversarial one. The former stands on the side of the public and works to uncover information, while the latter takes on a gatekeeper role by protecting their clients’ interests.
Singapore’s financial regulator envisions a more cohesive ecosystem. The $30 million Value Unlock programme, for example, offers grants to help listed companies strengthen investor engagement and sharpen their focus on shareholder value creation. Successful applicants under the eight-figure grant scheme will work with agencies to refine their company’s story and improve their outreach to fund managers, brokers, research analysts and the media, among others.
In contrast to the millions being spent to soothe yet spur the retail investor, here’s a tip market players can use for free: let analysts analyse.
Evoking once again the image of cars on a roundabout, the listco, agency, analyst, journalist, market-maker, broker and investor are all behind the wheel. Each participant drives a vehicle (some more luxurious than others) and each can only move as quickly as the others allow.
One less knee-jerk reaction means a smoother journey for all.
