Positioning for more privatisations or takeovers

In recent months, the Singapore market has seen a flurry of offers for listed companies, several of which have the aim of privatisation. Indeed, we find that conditions are ripe for privatisations or takeovers, given 1) how attractive valuations are currently, 2) capital costs are still low for stronger corporates and individuals, and 3) investors still believe in the long-term prospects of Asia. We screen for stocks that are unloved and trading with low Price/NTA ratios, and search for companies that are net cash, as well as those that have large shareholders. We also look out for companies whose insiders have been scooping up shares recently. To broaden the search, we also seek a list of companies that have been undertaking more share buy backs recently. Based on our screening, companies that are more likely to be privatised or taken over include: