Sep 18, 2008 Thursday

$5.8m confidence boost for SC Global from CEO

He buys 7.79m shares to shore up prices; another director buys 500,000

By Yang Huiwen

THE boss of high-end residential property developer SC Global Developments has given a $5.8 million vote of confidence in the firm just as its share price was diving.

Mr Simon Cheong, SC Global's chairman and chief executive, bought 7.79 million shares at 75 cents each through a married deal on Tuesday.

The price Mr Cheong paid in his $5.8 million splurge was at a hefty premium of about 23 per cent over the counter's market price of 61 cents per share the same day. SC Global had fallen over 21 per cent over the five previous days. It closed unchanged at 61 cents yesterday.

Also on Tuesday, Mr David Tsang, SC Global's executive director and director of corporate finance, also bought 500,000 shares for 75 cents apiece.

The two directors bought the shares in their own individual capacities.

A filing to the Singapore Exchange yesterday showed Mr Cheong made his purchase through Edenlia, a wholly owned unit of Cheong SP Holdings, in which Mr Cheong has a controlling interest.

Mr Tsang also purchased the shares via a married deal, through T1 Capital, in which he has a controlling interest.

The counter party is not known as the deal was done through brokers.

'We suspect the sellers were likely to be a group of individuals rather than sale of shares by an institution,' said Cazenove analyst George Koh.

'This purchase by both the executive directors is good news as the purchase price of 75 cents is still at a substantial discount to SC Global's first-half 2008 net asset value of 97 cents,' he said.

The transaction raises Mr Cheong's deemed stake to 210.49 million shares, or 53.305 per cent of issued share capital. He also has a direct stake of 610,000 shares, or 0.154 per cent.

Mr Tsang's deemed stake is now 5.712 million shares, or 1.447 per cent of SC Global's issued share capital. He also has a direct stake of 825,946 million shares, or 0.209 per cent.

Said Mr Cheong on their purchase of the shares: 'We know the company well, and we see value, that's why we bought.'

The company said it received strong response during private previews of its latest project, Martin No. 38. All the 30 units it released in the first phase of marketing have been sold, with the average price at about $2,130 per sq ft (psf), above the expected price of close to $2,000 psf.

SC Global is down over 74 per cent since the start of the year, compared to a 29.5 per cent decline in the benchmark Straits Times Index, reflecting a cooling residential property market.

DBS Vickers, which has a 'hold' rating on the firm, said in a report earlier this month that the 'high-end sentiment has to turn before SC Global can experience a re-rating, and that change in sentiment will likely lag the catalyst of improved economic sentiment'.

Last January, businessman Oei Hong Leong cashed out all his shares in the developer, leading some market observers to question if the high-end luxury market was close to peaking. He disposed of his 6.78 per cent stake, amounting to 9.824 million shares, in a married deal done through Oei Hong Leong Foundation.

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