SINGAPORE (Oct 14): Amid a global economic slowdown and uncertainty in the macroeconomic environment, investors tend to seek refuge in safe-haven assets such as gold, and insiders’ purchases of shares in companies that benefit from rising gold prices is worth noting.
On Oct 3, pawnbroker MoneyMax Financial Services acquired 1.25 million shares in an off-market transaction through Money Farm, an investment holding company that owns MoneyMax, for a total consideration of $200,000, which translates into 16 cents per share. Following the transaction, Money Farm now owns 220.5 million shares, or a 62.3% stake, in the company.
At first glance, MoneyMax’s share price appears prone to fluctuations. Year to date, its shares have fallen 6.67% to close at 14 cents on Oct 9, valuing the company at $47.76 million. It listed in August 2013 at 43 cents.
For 2QFY2019, the group reported earnings of $2.1 million, up 20.6% y-o-y from 2Q2018. This was largely attributable to a 33.3% increase in revenue to $45.9 million, on the back of revenue increments in the retail and trading of pre-owned items, and pawnbroking segments. The group also declared an interim dividend of 0.5 cent per ordinary share. In its outlook statement, the group says it expected rising global tensions and economic uncertainties across various regions to have an impact on its economic situation and business environment.
Meanwhile, SK Jewellery Group’s controlling shareholder, the Lim family, via its vehicle Soo Kee Capital, has been increasing its stake in the company. On Oct 2, it bought 4,700 shares for a total consideration of $446.50, or 9.5 cents per share. On Oct 3, Soo Kee Capital bought another 2.79 million shares for $348,475 through an off-market transaction. This translates into an average price of 12 cents each. As at Oct 9, Soo Kee Capital owns 331.3 million shares, or 58.9%, in SK Jewellery. SK Jewellery’s shares have been actively traded recently. According to recent bourse filings, Soo Kee Capital, for one, has been actively buying shares since August.
SK Jewellery was listed on the Singapore Exchange’s Catalist board at an IPO price of 30 cents, and has tumbled some 70% to close at 9.5 cents on Oct 9. For 2Q2019, the company’s earnings increased 44% y-o-y to $1.07 million. Revenue for the same quarter fell 17.2% y-o-y to $32 million from $38.6 million, on the back of lower sales and the cessation of its subsidiary SK Bullion. The group says that challenges in the retail sector were expected to persist in view of the uncertainty in the macroeconomic environment, with the ongoing trade war contributing largely to a pessimistic consumer outlook.
