SingTel, SPH among Asia's top value creators - Oct 14, 2005 (ST)

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The Straits Times / The Business Times News On SPH

SingTel, SPH among Asia's top value creators

Oct 14, 2005
The Straits Times

SINGTEL'S management has been ranked second in Asia for creating the most value for shareholders, according to a survey of 462 of the region's biggest companies.

The telco came in behind South Korea's Samsung Electronics. The next highest ranked Singaporean company was Singapore Press Holdings (SPH) at No. 15.

A number of other high rankings - Keppel Corp (No. 27), United Overseas Bank (No. 33) and OCBC Bank (No. 43) - meant Singapore managers were ranked overall at second spot after South Korea.

The study was carried out by Marakon Associates, which looked at total shareholder returns (TSR) over a five-year period to December last year.

The results were published in this month's CFO Asia magazine.

Marakon examined top companies in Asia, excluding Japan and China.

It took each company's average TSR, which comprises stock price appreciation and capital payouts such as dividends, and stripped out effects over which managers have no control.

These include interest rate changes, shifts in investor sentiment and the impact of natural disasters.

Marakon manager Vishrut Jain, who conducted the study, said: 'An Indian company, for example, may register a huge return over the past five years. But is it just riding the general stock market boom or is its management actually doing a good job?

'If Singapore companies just look at the TSRs they have created, they will not be happy. But if they take out the country and industry effects, there is much to celebrate. These have been tough times.'

SingTel chief financial officer Chua Sock Koong said the telco has always been disciplined about creating shareholder value in good and bad times.

Since 2000, it has put in place a 'value-based management' programme, which helps ensure that investment decisions are based on generating true economic profit.

SingTel posted an annual average absolute TSR of negative 4 per cent but this was better than other regional telcos. And the study shows its management has created an annual average excess shareholder return of US$3.2 billion (S$5.4 billion)

At SPH, management has generated US$654 million in excess shareholder returns on average every year.

Chief executive Alan Chan said: 'It is gratifying that we have been ranked so highly. At SPH, we've always been committed to maximising shareholder returns and giving cash back to shareholders, and the survey results attest to this commitment.

'Over the last five years we have returned $4 billion in cash to shareholders through dividends, capital reductions and share buy-backs.'

Beyond rewarding their shareholders, both SingTel and SPH have also been recognised for their transparency to investors.

Both companies were recently awarded corporate governance and transparency awards by the Securities Investors Association of Singapore.