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Editorial Desk
Editorial Desk | 02 December 2011
By: Xavier Lim
Articles (51) Profile

Europe related headlines, rumours and meetings are dominating the market psyche, causing even more volatility and upheavals in the global financial markets.

Hours after Standard & Poor’s Ratings Services downgraded more than a dozen giant global banks, the US Federal Reserve along with five other major central banks moved together to shore up the credit markets. Equally significant was China’s central bank, which announced a 50 basis-point cut in its bank reserve requirements – its first since December 2008.

These moves not only helped the global equity markets to rebound sharply, it also led crude-oil futures to trade above $100 a barrel. Following the sudden change of tide, the local Straits Times Index closed up more than 2% on 1 December.

One minute it was the bad news, the next it simply switched to the good. It is little wonder that investors are left dazzled by such mixed signals.

Macroeconomics aside, let us zoom into our cover story on Hoe Leong Corporation Ltd. We explore its rise into one of the world’s largest spare parts distributors for heavy equipment and industry machinery, and find out that its secret lies in seizing growth opportunities and realising full potential. Notably, its in-house products have garnered greater acceptance and contributed more than 40% to its third quarter revenue. For more details on this undervalued gem, turn to page 8.

Staying on the corporate front, we focus onto the recently-proposed takeover offer for SMB United (SMB) by Hong Kong listed Boer Power Holdings. With the cash offer being a 9.2% premium over the former’s net asset value, is the deal good enough for shareholders to say yes? Refer to page 11 for our perspective.

Providing some background to the SMB’s takeover offer, we delved into the ‘romance between corporations’ – mergers and acquisitions. Through two very different case studies, we explore if such deals necessarily spell gains for shareholders and when should the cash out decision be made.

With 2011 moving into December, it is down to four weeks before this volatile year comes to an end. Given that December is typically a bountiful month for investors, our fingers are crossed for history to repeat itself and for money to slip into your pockets!

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.

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