Daily Morning Note – 16 April 2020
Asian stocks looked primed for losses after a weak session on Wall Street, as bleak retail, manufacturing and homebuilding data added to concerns about a severe U.S. recession. Treasuries surged.
Mapletree Industrial Trust will set aside up to S$13.7 million to cushion the impact of Covid-19 on its tenants in Singapore, over and above the property tax rebates announced by the government, which will be fully passed on to them. The additional programme is aimed at easing the pressure on tenants from “supply-chain disruptions and falls in business volume as a result of the pandemic”.
City Developments Limited (CDL) is acquiring a 51.01 per cent stake in Chinese real estate developer Sincere Property Group for RMB4.39 billion (about S$0.88 billion), which will enable it to expand its footprint in China. As part of the transaction, a call option will also be granted to CDL, which it can exercise to purchase an additional 9 per cent interest in Sincere Property for RMB0.77 billion at the same entry valuation. If exercised, it will allow CDL to acquire a 60.01 per cent stake in Sincere for a total of RMB5.16 billion.
The overall passenger numbers of SIA Group’s airlines fell 65 per cent year on year to 1.1 million in March, against the backdrop of muted travel demand and travel restrictions amid the Covid-19 outbreak. The group’s airlines also recorded a a 60.4 per cent year-on-year decline in passenger carriage, measured in revenue passenger-kilometers. Capacity cuts in March resulted in an overall reduction of 43.8 per cent, measured in available seat kilometres, during the month.
Japfa said it will sell a 25-per-cent stake in its subsidiary to Japanese conglomerate Meiji for US$254.4 million in cash. In addition, the subsidiary will get to supply raw milk to Meiji on a five-year rolling basis, renewable annually. The subsidiary, AustAsia Investment Holdings, operates Japfa’s dairy-farming business in China. Japfa said the move is in line with its plans to grow AustAsia into the largest independent raw milk producer in China.
Chinese property developer Yanlord Land Group recorded 6.77 billion yuan (S$1.36 billion) in total contracted pre-sales from residential units and car parks for its latest quarter, 18.4 per cent higher than a year ago, even as the Covid-19 pandemic has weighed on property-buying sentiment in China. The pre-sales were for contracted gross floor area of 192,696 sq m, 7.1 per cent more than a year ago.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
City Development Ltd
Recommended Action: Technical SELL
Citydev (SGX: C09) strong sell-off from 11.39-6.10 shows a clear bearish impulse and as such, the likelihood of a continued downfall is confirmed by today’s technical.
Singapore Press Holdings (Credit View) – Bracing for the long run
Credit Commentary, Credit Analyst – Timothy Ang
– We are Neutral on SPH’s credit profile given its large cash pile, low levels of short term debt and manageable gearing levels
– Although 2Q20 earnings were flat, expect a weaker 2H20
– Interim dividend was cut by c.73%yoy to 1.5 cents to conserve cash
– We see value in SPHSP 4.5% PERP, offering a substantial spread increment of 68bps over the SPHSP 4% PERP
HK Reports – Read up on our Hong Kong reports here
Webinar Of The Week
Date: 13 April 2020
|The information contained in this email and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this email do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the e investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or investing in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein is suitable for you. PhillipCapital and any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials provided 揳s is?without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.|
|This e-mail and its attachment(s) may contain privileged or confidential information, which is intended only for the use of the recipient(s) named above. If you have received this message in error, please notify the sender immediately and delete all copies of it. If you are not the intended recipient, you must not read, use, copy, store, disseminate and/or disclose to any person this email and any of its attachment(s). PhillipCapital and its members will not accept legal responsibility for the contents of this message. Thank you for your cooperation.|