Daily Morning Note – 21 January 2019


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Asian stocks looked set to kick the week of on positive footing amid optimism steps are being taken toward a U.S.-China trade truce.

Shares in Australia climbed, following late Friday gains for equity futures in Japan and Hong, after the S&P 500 Index advanced to the highest level since Dec. 6. In the latest sign the two sides are eager for a deal, a report showed China had offered a path to eliminate its trade imbalance with the U.S. by ramping up purchases of goods made in America. Treasury yields on 10-year notes pushed higher and the dollar rose.

Oil remained above $53 a barrel and commodities extended their recent advance on Friday.

Source: Bloomberg


First REIT – A cautionary tale

Ceasing coverage

– FY18 Revenue and NPI were in line with our forecast. DPU outperformed our
estimates by c.5% due to a S$15mn income tax benefit arising from a write-back of
provision for deferred tax on fair value loss on investment properties, as a result of a
reduced tax rate.

– 4.7% and 4.5% YoY boost in FY18 Gross Revenue and NPI, respectively, driven by two
acquisitions made in 4Q17.

– Cost of debt relatively stable at c.3.84% despite rising interest rates.

– Receivables continue to mount, against backdrop of uncertainty over upcoming lease
expires, though some S$8mn of rental payments has since been received on Jan 15,

– Ceasing coverage due to reallocation of internal resources.


The CEO of the Manager of Frasers Centrepoint Trust, Dr. Chew Tuan Chiong will step down by year-end. His successor “will be announced in due course”.

Boustead Projects Limited has secured a contract worth over S$200 million to build an integrated advanced development and global headquarters for Surbana Jurong Private Limited and its group of companies to be located at the 600-hectare Innovation District in Singapore.

SK Jewellery Group Limited has entered into a memorandum of understanding with Bizkey Network Pte. Ltd., a blockchain-based Point-of-Sale (“POS”) systems provider, in relation to the acceptance of cryptocurrency as an alternative form of payment at its jewellery outlets.

Dasin Retail Trust has extended its S$106.6 million and US$52.4 million offshore facilities at a lower interest rate margin, and lengthened the weighted average term-to-maturity to 1.6 years.

Hyflux investors were told at the second town hall meeting that in a liquidation scenario, only note holders would get paid (recovery rate for 3.8% to 8.7%); perpetual and preference shareholders would get nothing.

Source: SGX Masnet, The Business Times

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