What’s the latest on Venture’s share price as board delays dividend payments?
The technology group’s share price has been gaining since the Singapore government announced its third fiscal stimulus on 06 April.
Venture Corporation’s share price on the rebound
Share price of Singapore technology product and services conglomerate Venture Corporation is starting to rise again, following an extended price rout that lasted over a month.
Between 05 March and 23 March 2020, the company’s share price had fallen as much as 26%, driven by a wave of panic selling in global markets as a result of the worsening coronavirus pandemic.
A series of small rises and falls followed in the two weeks after, before a firm upward slope was established starting 03 April, as market volatility began to subside with the coronavirus situation improving slightly in Europe as well as the US.
IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs, you can buy long or sell short on Venture Corp shares and other major stocks depending on whether you think prices will rise or fall. Start today by opening an account on IG's market-leading trading platform.
A third economic stimulus unveiled by the Singapore government on 06 April – taking the total amount of coronavirus-financial aid to US$59.9 billion since the start of the Covid-19 outbreak – also boosted the ongoing Venture stock value recovery by 17% to the current one-month high share price of S$15.59 per share.
It should also be noted that the group’s Board of Directors had also announced on 08 April that it had obtained approval from authorities to postpone its annual general meeting to as late as 29 June. As a result, the previously announced final 2019 dividend payout date of 22 May 2020 will now be revised, with a new date to be revealed in due course.
Venture Corp’s share price hit a nine-month high in early-March
In our last update on the company, things were looking somewhat different. Venture’s share price had managed to hit a nine-month high share price of S$17.14 a share, even amid the coronavirus-driven panic selling of early-March 2020 that had affected most Singapore equities, including blue-chip stocks.
Venture – a 12,000-person strong company with more than 30 subsidiaries and affiliates spread across Southeast Asia, Northeast Asia, America and Europe – was one of few companies that managed to fend off the downward price momentum for a brief period of time, thanks in most part to the release of its largely healthy 2019 earnings.
Are you bullish or bearish on Venture Corporation? Either way, you can buy long or sell short on Venture shares using CFDs and other instruments offered on IG's world-class trading platform. Start today by opening an IG account.
Analysts lower their Venture share price targets by 14.6%
With the upward momentum still in an arguably nascent stage, analysts have lowered their 12-month price targets on the stock.
DBS researchers reduced their Venture Corporation share price target by 14.6% to S$15.80 from S$18.50 per share previously, while maintaining a ‘buy’ rating, pegged to a 12.5x 10-year average price-to-earnings ratio for the full 2020 financial year.
In lieu of the global health crisis, the brokers have cut their earnings forecast for Venture’s FY20F/FY21F by 5%/3% to account for the temporary shutdown of most of its Malaysia factories and to a lesser extent, its China plants. The analysts also lowered net margin estimates to 9.9% for FY20F in view of global supply chain disruptions, with a possible gradual improvement to 10.2% in FY21F.
According to DBS, other risk factors include potential exposure to customers in the US, European Union and Asia, with a broad global slowdown likely to impact Venture due to its vulnerability to business cycles. A possible weakness in the Eurozone arising from political instability or restrictive trading policies by the US could also weaken global growth prospects, the analysts added.
A weakening US dollar against the Singapore dollar and a prolonged accommodative monetary policy could also lower Venture’s earnings. DBS’s sensitivity analysis shows that every 1% appreciation of USD against SGD will increase Venture’s net profit by approximately 1.9%.
However, the analysts’ forecast for Venture’s second half of 2020 remain largely optimistic, stating that they expect the group to ‘emerge strong’ from the coronavirus crisis, ‘supported by new product introductions and new partners coming on stream’, its entrenched relationships with industry leaders in the various technology domains, and its strong balance sheet.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.