This chart shows UOL's failure to boost share price through accretive investments

According to Nomura, considering the keen competition faced by developers such as UOL to acquire quality assets (both in the domestic as well as overseas markets), Nomura believes management has done a good job deploying (redeploying) capital in apparently NAV-accretive ways.

However, it appears UOL’s prudent capital management has largely failed to inspire its share price performance. Since the announcement of Pan Pac’s privatisation in May, for instance, the stock is in fact down 13.2%.

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That said, we note that UOL’s Chairman, Dr Wee Cho Yaw, had bought a total of 6.5mn shares in UOL at an average price of SGD6.21/share in June and August, thus raising his deemed stake in UOL by c.0.8% to c.31.8% (which is in addition to stakes held by vehicles controlled by other family members). It seems to us the investor who appreciates the company’s capital management most is the Chairman himself.