Daily Morning Note – 08 May 2018


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Keppel DC REIT – Bulking up on SGP
Recommendation: Accumulate (Upgrade), Last Close Price: $1.43
Target Price: $1.51 (previously $1.47), Analyst: Richard Leow
– Acquisition of data centre in Singapore, which will be renamed KDC SGP 5
– Launch of Private Placement to fund the acquisition
– Upgrade to Accumulate; higher target price of $1.51 (previously $1.47)


The Dow Jones Industrial Average DJIA, +0.39% finished 94.81 points, or 0.4%, higher at 24,357.32. The S&P 500 index SPX, +0.35% added 9.21 points to 2,672.63, or 0.4%. The Nasdaq Composite Index COMP, +0.77% rose 55.60 points, or 0.8%, to 7,265.21. All three indexes closed off their session highs.

Oil Surges On Venezuela-Conoco Dispute, Iran Sanction Worries. U.S. West Texas Intermediate (WTI) crude futures rose $1.01, or 1.5 percent, to settle at $70.73 a barrel. This was the first time since November 2014 that WTI had climbed above $70. Brent crude futures jumped $1.30, or 1.7 percent, to settle at $76.17 a barrel.

STI starts the week on cautious note. The index falls for third straight day to finish at 3,532.86, with some 2.2 billion shares worth S$1.1 billion done. Share prices in the Singapore bourse fell for the third straight day and began the week on a cautious note ahead of a handful of event risks including US’ renegotiation of a trade deal with Mexico and Canada and the too-tight-to-call elections in neighbouring Malaysia.

Keppel DC Reit private placement over two times subscribed. The Reit (real estate investment trust) announced a placement of 224 million new shares at S$1.353 each, which is a 4.9 per cent discount to the volume-weighted average price of S$1.4220 per share for trades last done on the Singapore Exchange on May 4.

OCBC sees margin pressure on Indonesian loan book. The more concerted push by the Indonesian government to limit loan rates to no more than 10% in recent times has put pressure on the net interest margin (NIMs) of OCBC’s loan book in the country.

Grab cuts back on customer discounts and driver incentives but says users still getting good value.

Malaysia GE: Najib, Mahathir in final election blitz. Prime Minister Najib Razak sought to take back the initiative from rival Tun Mahathir Mohamad on Monday (May 7) before Malaysia’s 14th general election enters its final day of campaigning on Tuesday.

Source: Bloomberg, Channel NewsAsia, The Business Times, SGX Masnet, Reuters, PSR

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