Daily Morning Note – 22 January 2020
WEEKLY MARKET OUTLOOK WEBINAR
Asian stocks looked set for a mixed start as investors mulled reports that China’s coronavirus had migrated to the U.S. Treasuries climbed and the yen extended gains. Futures dipped in Japan, pointed higher in Hong Kong and were little changed in Australia. U.S. and European shares saw modest losses. Luxury stocks headed for their biggest drop since October on worries the virus will disrupt spending during a key Chinese holiday period. Industrial and consumer shares were among the worst performers as the S&P 500 Index fell from a record high, and the yuan weakened. Elsewhere, Germany’s DAX Index briefly surpassed the peak reached two years ago. West Texas crude held around $58 a barrel as ample global supplies offset the loss of exports from Libya.
CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT), today jointly announced the proposed merger of CMT and CCT (the Proposed Merger) to create a diversified commercial real estate investment trust (REIT) to be named “CapitaLand Integrated Commercial Trust” (CICT or merged entity). CICT is expected to be the third largest REIT in Asia Pacific (APAC) and the largest REIT in Singapore, with a market capitalisation of S$16.8 billion2 and a combined property value of S$22.9 billion.
Keppel Pacific Oak US Reit, previously known as Keppel-KBS US Reit, on Tuesday posted a fourth-quarter restated distribution per unit (DPU) of 1.51 US cents, higher compared with the restated DPU of 1.25 US cents in the same period a year ago. DPU for the three months ended Dec 31, 2019 came in 2.7 per cent above forecast, notwithstanding the rights issue completed on Nov 26, 2018 that enlarged the unit base.
Keppel DC Reit on Tuesday posted a distribution per unit (DPU) of 1.83 Singapore cents for the fourth quarter ended Dec 31, 2019, down from 1.85 cents a year ago. Excluding the impact of the pro-rata preferential offering in October 2019 of about 0.10 Singapore cent per unit, the adjusted DPU for Q4 would be 1.93 Singapore cents.
New revenue contributions lifted Mapletree Industrial Trust’s (MIT) distribution per unit (DPU) for the third quarter to 3.16 Singapore cents on an enlarged unit base, up from 3.07 cents a year ago. Distributable income for the three months ended Dec 31, 2019 rose 19.2 per cent to S$69.4 million.
ComfortDelGro’S Australian subsidiary has secured a A$25 million (S$23.1 million) green loan from OCBC Bank to finance its hybrid bus fleet in Victoria, both companies announced in a joint statement on Tuesday. The loan was structured according to the green loan principles issued in 2018 by the Loan Market Association and Asia Pacific Loan Market Association.
SP Corporation on Tuesday posted a 32 per cent rise in full-year net profit to S$2.5 million from S$1.9 million a year ago, despite a fall in revenue. For the full year ended Dec 31, 2019, the coal trader saw its topline decrease 32 per cent to S$93.1 million due to lower revenue from rubber and coal trading.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, PSR
Jardine Cycle & Carriage Ltd
Recommended Action: Technical SELL
Jardine Cycle & Carriage (SGX: C07) bearish decline will resume after a period of consolidation based on the technicals
Jardine Strategic Holdings Ltd
Recommended Action: Technical SELL
Jardine Strategic (SGX: J37) bullish rebound is disappointing despite the price breakout of the falling wedge last October 2019
IREIT Global – New parent, new acquisition, new outlook
Recommendation: ACCUMULATE (Initiation), Last Done: S$0.815
Target Price: S$0.885, Analyst: Tan Jie Hui
– Attractive dividend yield supported by stable leases.
– Ability to leverage on financial support, expertise and acquisition deals from Tikehau Capital and CDL.
– Acquisition to add scale, growth and diversification to IREIT.
ESR Cayman Limited – Non-deal roadshow highlights
Credit Commentary, Credit Analyst – Timothy Ang
– Strong stakeholders, with JD.com (7.65% stake) as a tenant as well
– Strong tenants, including Softbank, Amazon, Cainiao (a member of Alibaba group) and JD.com
– Leveraging on the growth of e-commerce in Asia, with US$500 million joint venture with GIC
– Management considering getting a rating in the next few years
– Potential unlocking of USD500mn for capital recycling and deleveraging
– However, heavy expansion requires high capex
Webinar Of The Week
Market Outlook: (PSR) Singapore Weekly & Technicals
Date: 20 January 2020
Phillip Research in 3 minutes: #16- JEP Holdings Ltd
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