Daily Morning Note – 24 July 2020


Stocks in Asia were poised to follow U.S. equities lower after an unexpected rise in jobless claims rekindled concern the economic recovery has stalled. Treasuries rose.

Futures slid in Hong Kong and Australia. Contracts on the S&P 500 Index edged higher after the gauge earlier slipped from a four-month high, led by losses in technology firms and companies that make non-essential consumer goods. The Nasdaq 100 Index dropped to a two-week low and turned negative for the week, erasing Monday’s rally. Intel Corp. slumped in after-hours trading after warning about a production delay.


MAPLETREE Commercial Trust (MCT) on Thursday reported a 10.7 per cent year-on-year decline in net property income to S$78.9 million for the first quarter, attributing it largely to rental rebates given to retail tenants at its core VivoCity property during the Covid-19 pandemic. Gross revenue for the quarter ended June 30 was down 10.5 per cent on the year to S$100.4 million, while property operating expenses were 9.7 per cent lower on the year to S$21.5 million.

OUE Commercial Real Estate Investment Trust (C-Reit) on Thursday posted a distribution per unit (DPU) of one Singapore cent for the half-year ended June 30, 40.5 per cent lower than a year ago. It said it had retained S$13.8 million of distribution to “preserve financial flexibility” amid the Covid-19 pandemic. Revenue for the second quarter had risen 23.9 per cent on the year to S$64.3 million, resulting in a 32.4 per cent year-on-year (y-o-y) increase in H1 revenue to S$142 million. Net property income for Q2 increased 23.7 per cent on the year to S$50.4 million, due to the contribution from the merger with OUE Hospitality Trust last year, although this was partially offset by rental rebates to tenants.

SUNTEC Real Estate Investment Trust (Suntec Reit)’s distribution per unit (DPU) fell by 31.3 per cent to 3.293 Singapore cents for the six months ended June 30, from 4.795 cents a year ago. This comprises a DPU of 1.76 cents for the three months ended March 31 and a DPU of 1.533 cents for the three months ended June 30, the real estate investment trust’s (Reit) manager said in a regulatory filing on Thursday. Gross revenue was down 16.1 per cent to S$149.4 million for the half year, from S$178.1 million a year ago.

FIRST Sponsor Group on Thursday posted a 49.4 per cent rise in net profit to S$58.1 million for the six months ended June 30, from S$38.9 million a year ago. The property group achieved a higher overall gross margin of 80.7 per cent in H1, compared to 69.2 per cent a year ago. It said this was due mainly to a change in sales mix, as the higher-yielding property financing business contributed a larger share of the total revenue in the current period.

ELITE Commercial Reit on Thursday posted a distribution per unit (DPU) of 1.95 pence for the period from Feb 6 to June 30, 2020, 1 per cent higher than its initial public offering (IPO) forecast of 1.93 pence. The real estate investment trust (Reit) was listed on the Singapore bourse on Feb 6 this year, opening at 70.5 pence, 3.7 per cent higher than its IPO price of 68 pence. Revenue for the period came in at £9.32 million (S$16.4 million), 0.3 per cent higher than its forecast of £9.28 million. Net property income stood at £9.1 million, 0.2 per cent above its IPO forecast of about £9 million.

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


Singapore Exchange Ltd

Analyst: Chua Wei Ren

Recommended Action: Technical BUY

Singapore Exchange Ltd (SGX: S68) decline has been met with resistance after prices failed to break below $8.00 psychological support despite our sell call on 2nd July. Prices managed to stay above $8.25. Based on the technicals, prices are set to rally once again.

>> Read more technical reports


CapitaLand Mall Trust – Uphill from here

Recommendation: BUY (Maintained), Last Done: S$2.03

Target Price: S$2.33, Analyst: Natalie Ong

– 1H20 DPU of 2.96cents was -49% YoY and included one-third ($23.2mn) of the distributable income retained in 1Q20.

– The worst is over, baring a second wave of the virus. Footfall has recovered to 53% of January levels. 1H20 tenant sales fell -15.4% YoY, better than expected, while portfolio occupancy remained high at 97.7%, clocking +0.1% rental reversions for 2Q20.

– Maintain BUY with an unchanged TP of $2.33. We are keeping our estimates unchanged as we have previously incorporated c.$80mn of out-of-pocket (OOP) rental rebates, above the $76.5mn OOP rebates guidance for 1H20.

>> Read more research reports

HK Reports – Read up on our Hong Kong reports here


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