Singpost shares dip on CEO's resignation

Singpost shares dip on CEO's resignation
Dr Wolfgang Baier, CEO of SingPost.
PHOTO: The Business Times

SingPost shares hit a two-month low yesterday, following the abrupt resignation of group chief executive Wolfgang Baier on Wednesday.

The stock fell four cents or 2.3 per cent to close at $1.715 with 12.4 million shares changing hands.

Dr Baier's move surprised the market as he had held the post for just four years and was widely seen as the face of change driving the postal service's transformation into a regional e-commerce and logistics leader.

SingPost gave no explanation for Dr Baier's abrupt departure, stating only that the Austrian will be "pursuing new endeavours".

Dr Baier joined SingPost as chief executive of international operations in February 2011 and was appointed group chief executive in October that year.

Group communications head Peter Heng was also tight-lipped yesterday about how prepared the firm had been for the move when asked by The Straits Times.

"Today's reaction is definitely a knee jerk, but that's in line with the general market sentiment," said remisier Desmond Leong. "This week, SingPost has been down every day except Monday - that's in line with the Straits Times Index."

Mr Leong does not expect the shares to dip much further, citing the strong reaction yesterday and the fact that six months - the length of time for which SingPost has said Dr Baier will help support the handover - should be sufficient for a smooth transition.

Besides, it is not unusual for a company's valuation to take a hit when its CEO makes an exit, though that is more often the case when the CEO is the founder of the company. "In this case, (Dr Baier) was just a professional manager who was brought in," said Mr Kevin Scully, executive chairman of independent research house NRA Capital.

Mr Scully called yesterday's price fall a buying opportunity: "Investors didn't come in because of Baier joining the company, they came in because of the e-commerce play and the Alibaba stake.

"He may have given a negative assurance with his departure, but e-commerce is where businesses will be done in the future, and if you can't buy Alibaba or JD.com, SingPost is the opportunity to get this exposure."


This article was first published on December 12, 2015.
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