From Best to Worst, Singapore's Top Stock Is No Longer No. 1

  • Venture Corp. target price cut by analysts after 1Q results
  • It has lost over $2 billion of its market cap since April 20

Venture Corp., which was Singapore’s best performing stock in 2018 until this week, has lost almost a third of its market value in just five days.

The combination of a weak earnings outlook by key customer Phillip Morris International Inc., report of short selling, and its own results yesterday that failed to impress sent bulls scurrying. Shares of the electronics services provider have lost 27 percent, or S$2.24 billion of its market capitalization, since April 20, and it’s the worst performer on the Straits Times Index Thursday.

Venture, which only had buy ratings until yesterday, is now trading at a price-to-earnings valuation of 1-standard deviation below its 5-year average. The parts supplier of Philip Morris’ IQOS e-cigarette device reported yesterday that first-quarter profit fell by 41 percent from the previous period, marking the first such decline in five quarters. At least six of the nine analysts covering the stock cut their price targets, while Credit Suisse Group AG downgraded the stock.

The stock decline accelerated this week when a report of short selling emerged. The volume of shares shorted on the stock rose to a record 1.04 million on April 20, according to data from the Singapore Exchange.

"They have a clear hidden agenda," Venture Chief Financial Officer Ng Chee Kwoon said during its results briefing on Wednesday. "We will look at it and see what we need to do on this matter."

— With assistance by Livia Yap

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