The year's gainers and losers

Wilmar's fortunes soared on the back of high palm oil prices, but DBS and SIA felt the heat from the slowing global economy

RISING commodity prices were probably best illustrated by the Singapore stock market's top gainer by market value in 2007. Palm oil refiner Wilmar International saw its market capitalisation increase $28.3 billion to $34.4 billion.


Wilmar was easily the year's top gainer in dollar terms, making the company the second-largest on the exchange after SingTel. Wilmar was the 19th largest company by market cap in December 2006. But its fortunes soared on the back of high palm oil prices, fuelled by demand for the raw material in food and alternative fuel such as bio-diesel, after crude oil soared above US$90 a barrel.

SingTel, an index heavyweight and a bellwether for the local bourse, was the second-biggest gainer in terms of market cap in 2007. The stock rose amid the US sub-prime mortgage woes, with analysts lauding it as a defensive counter with above-average returns and below-average standard deviations during volatile times.

SingTel benefited from immigration-driven consumption growth and strong economic activity. It enjoyed double-digit growth at home as the resurgent economy led to more mobile phone sales and higher business demand.

SingTel also has investments in high-growth Asian nations such as Thailand, India, Philippines and Indonesia and in the bigger Australian market through Optus.

Before sub-prime woes reared their head, the Singapore Exchange (SGX) saw a boom in initial public offerings and a flurry of trading activity as the market surged to unprecedented levels. This made SGX the third-largest gainer in terms of market cap. The company announced record earnings as its income from securities clearing and processing fees flourished.

As for 2007's top gainers by percentage terms, a commodity play again topped the list. Palm oil producer Indofood Agri Resources was the biggest gainer in market cap by percentage terms. The other two top spots were taken by penny stocks Memstar Technology and China Auto Electronics

Memstar, a China-based water treatment firm that came about from the reverse takeover of electronics firm Mediastream, made its debut this year.

China Auto Electronics Group, which designs, assembles and makes wiring harnesses and connectors for the automobile industry, was recommended by analysts for its exposure to demand for such products from China's growing vehicle industry.

Turning to 2007's top losers, DBS headed the list for market cap in dollar terms. South-east Asia's biggest bank was singled out by investors as a victim of sub-prime mortgage woes.

DBS made a $70 million allowances for $275 million in CDOs that were exposed to US sub-prime assets. The bank also saw the departure of its chief executive Jackson Tai. A new CEO has yet to be announced.

Singapore Airlines was second on the losers' list in terms of dollar value. Its chief executive Chew Choon Seng had said that the aviation industry might be affected by the slowdown in the global economy brought about by high oil prices and the credit crunch. The liberalisation of Singapore-KL flights has also taken away the virtual duopoly SIA and MAS had, giving budget airlines a chance to cash in on the lucrative route.

Investment company GuocoLeisure, formerly known as BIL International, saw its market cap drop after disposals by a high-level executive. The stock was also among four dropped from the Straits Times Index.

In percentage terms, the biggest loser in market cap was medical equipment manufacturer Sunray Holdings, which had warned of lower sales and net profit for FY 2007. It said that the operating environment remains challenging.

Gems TV Holdings also said that it faces challenges in its business as its earnings fell. Hengxin Technology, another loser, was rocked by management tussles, resulting in the resignation of four directors including CEO Qian Lirong.