Semiconductor-testing solutions provider AEM has been topping Singapore&rsquo s short interest chart for months, with 7.02% of its outstanding shares having been borrowed

 

THE short interest levels of UMS Holdings and Keppel DC Reit have been rising, and have sent both these counters into the list of the five most shorted counters in Singapore.

 

Semiconductor equipment manufacturer UMS had the fourth-highest short interest &ndash defined as the percentage of outstanding shares on loan &ndash at 2.88 per cent as at Jun 28, S& P Global Market Intelligence data showed.

 

Keppel DC Reit, a Reit focused on data centres, had the fifth-highest level, at 2.37 per cent.

 

Semiconductor-testing solutions provider AEM has been topping Singapore&rsquo s short interest chart for months, with 7.02 per cent of its outstanding shares being borrowed.

 

Flag carrier Singapore Airlines and provider of engineering solutions to the offshore, marine and energy industries, Seatrium, were behind as the second- and third-most shorted stocks in Singapore respectively.

 

The short interest across the Straits Times Index was 0.56 per cent.

 

UMS has been on the top five list before: the last time its short interest levels peaked, at 3.1 per cent, was on May 24, 2023.

 

The counter&rsquo s short interest spiked to 1.55 per cent on May 15, 2024, from 0.62 per cent the day before. Its short interest levels have stayed elevated since, keeping the counter in the top five shorted stocks list since the week to Jun 7.

 

Matt Chessum, director of securities finance at S& P Global Market Intelligence, said of UMS: &ldquo Short interest has increased&hellip following a recent decline in Q1 revenue and a weaker-than-expected Q2 outlook.

 

&ldquo As the artificial intelligence (AI) frenzy continues, the semiconductor sector is becoming increasingly competitive, as investors continue to scrutinise semiconductor companies to find those that will benefit the most from increased AI-linked demand.&rdquo

 

The counter endured a sell-down of 15.9 per cent on May 13, after having reported a 44 per cent plunge in its net profit for the first quarter.

 

DBS Group Research downgraded the stock to &ldquo hold&rdquo and slashed its target price to S$1 from S$1.84 in a report released shortly after.

 

Its analysts said that sluggish demand from UMS&rsquo key customer was expected to continue to affect the group in the short term.

 

The counter was 0.9 per cent or S$0.01 higher at S$1.19 on Wednesday, but down 10.5 per cent in the year to date.

 

Meanwhile, Keppel DC Reit&rsquo s short interest has been going up since late November the counter joined the list of Singapore&rsquo s top five shorted counters two weeks ago.

 

Gabriel Yap, a veteran investor in Reits, described the rising short interest in Keppel DC Reit as &ldquo not surprising&rdquo , given the turn of events since April.

 

The manager of the Reit had announced that month that the Reit was divesting its freehold 100-per-cent interest in its Sydney data centre, Intellicentre Campus, at A$174 million (S$152.1 million).

 

About A$90 million of the proceeds from that divestment were then reinvested into an Australian data centre note issued by Macquarie Data Centres Group. That was to enable the Reit to retain its exposure to the Australia data centre market, the Reit manager had then said.

 

The deals were completed a week ago.

 

Saying that the Reit&rsquo s investment in the Macquarie note &ldquo does not make sense&rdquo , Yap added: &ldquo You sell the Intellicentre to raise liquidity, then lock yourself up for a longer, illiquid 8.5 years&rsquo structured note, while earning only a meagre higher yield offset.&rdquo

This brings the group&rsquo s combined space in Singapore and Malaysia to over 1.2 million sq ft

 

SEMICONDUCTOR company UMS Holdings : 558 -0.85%&rsquo wholly owned subsidiary has acquired 5.4 acres or approximately 235,000 square feet (sq ft) of leasehold industrial land in Penang, Malaysia, for RM15.2 million (S$4.5 million). 

 

The 60-year leasehold land is &ldquo strategically located&rdquo between Perai Industrial Area and Batu Kawan Industrial in Penang Science Park North, UMS said in a bourse filing on Monday (Jul 1). It is also situated next to UMS&rsquo new factory in Penang. 

 

The acquisition will be funded internally from the group&rsquo s placement proceeds, which were raised in January, and is not expected to have any material impact on the company in the current financial year, added UMS. 

 

With this acquisition, the group will have over 1.2 million sq ft of combined space in Singapore and Malaysia to &ldquo meet new demands of key customers&rdquo . 

 

UMS chairman and chief executive Andy Luong highlighted that the group&rsquo s latest investment underscores its commitment in expanding its operations and providing &ldquo best-in-class facilities&rdquo for clients and potential clients. 

 

&ldquo Going forward, we believe that our investments in Penang will enable the group to strengthen its operational efficiency and sharpen its competitive edge in the market in order to grow the business and drive long-term value for our shareholders,&rdquo said Luong. 

Between May 16 and 17, UMS Holdings : 558 0% chairman and CEO Andy Luong acquired 1,833,600 shares at an average price of S$1.07 per share. This increased his deemed interest in the precision engineering group from 14.99 per cent to 15.25 per cent. 

 

The core business of UMS Holdings is the manufacture of precision machining components, assembly and integration of equipment modules for semiconductor equipment manufacturers. This segment accounted of 87 per cent of group revenue in FY23 (ended Dec 31), and 85 per cent of group revenue in Q1FY24. Its overall Q1FY24 revenue declined 33 per cent from Q1FY23, and fell 27 per cent from Q4FY23.  

 

During Q1FY24, the group took firm action to drive revenue, new customer acquisitions and working capital improvements to enhance its ability to capture new growth opportunities.

 

The group noted that this is in line with global production resources continuing to shift their focus towards South-east Asia, particularly Malaysia, where UMS Holdings has grown its presence with the successful completion of its 300,000 square foot factory in Penang.