U.S. equity futures edged lower Monday as traders weighed the risk of stiffer sanctions on Russia. Asian stocks may get a boost from Beijing’s move to ease a dispute that imperils the U.S. listings of Chinese firms. Contracts earlier rose for Hong Kong, where Chinese technology shares could get a tailwind after regulators removed a key hurdle that impedes full U.S. access to audits. Contracts for Japan and Australia pointed to steady starts.
The dollar was firm as investors evaluated a push by some European Union governments for new penalties on Russia following reports that its troops executed unarmed civilians in Ukrainian towns. Crude oil fell, extending a decline sparked by a U.S. announcement of an unprecedented release of strategic reserves to fight elevated energy costs.
The U.S. Treasury yield curve is flashing more warnings that economic growth will slow as the Federal Reserve hikes interest rates to tame inflation stoked in part by commodities. The two-year U.S. yield has exceeded the 30-year rate for the first time since 2007, joining inversions on other parts of the curve.
Singtel unit Australia Tower Network (ATN) has proposed to acquire Axicom, a provider of telecommunications tower infrastructure in Australia, for A$3.6 billion (S$3.7 billion). ATN’s shareholders – Singtel and AustralianSuper – on Friday (Apr 1) said the strong synergies between Axicom and ATN would provide exceptional growth opportunities which will benefit customers, employees and the community in the long term. Axicom owns and operates 2,000 telecommunication sites across Australia. Meanwhile, ATN owns mobile networks and rooftop sites in Australia, and also operates telecommunications towers for Singtel’s Australian telco subsidiary Optus. AustralianSuper head of infrastructure Nik Kemp said Axicom is complementary to its existing digital infrastructure portfolio and the combination of the 2 businesses will “result in the creation of a provider with a truly national footprint”.
Cuscaden Peak’s bid to acquire Singapore Press Holdings (SPH) via a scheme of arrangement was sanctioned in court on Friday (Apr 1). The last day of trading for SPH will be Apr 7, before the group’s shares are suspended from 9am the following day and subsequently delisted on May 13. Shareholders of SPH will have up until 5pm on Apr 26 to elect their preferred consideration option of either an all-cash offer of S$2.36, or S$2.40 per share comprising S$1.602 cash and 0.782 of an SPH Real Estate Investment Trust (Reit) unit through a distribution-in-specie by SPH. Transfer books and the register of members of the company will be closed at 5pm on Apr 11 to determine the entitlements of eligible shareholders in respect of the distribution-in-specie and the Cuscaden scheme.
As retail sentiments improve, SPH Real Estate Investment Trust (Reit) on Friday (Apr 1) posted a distribution per unit (DPU) of 1.44 Singapore cents for the fiscal second quarter ended Feb 28, 2022, bringing total distributions for the first half of the year to 2.68 cents. The Q2 distribution was 16.1 per cent higher than the previous quarter’s, and brought the financial year’s H1 distribution 9.8 per cent higher than the year-ago period. This came on the back of an 8.4 per cent growth in distributable income to unitholders in H1 to S$82.6 million, up from S$76.2 million in the year-ago period. Gross revenue for the 6 months grew 1.2 per cent on the year to S$141.6 million, while net property income (NPI) grew 0.4 per cent to S$105.3 million. In a bourse filing on Friday, the Reit’s manager said the financial results were supported by gradual market recovery, although NPI growth was partially dampened by an increase in property operating expenses, mainly from the spike in electricity rates.
Indospace, a developer and manager of industrial and logistics properties in India, is considering an initial public offering (IPO) in Singapore that could raise as much as US$700 million, according to people with knowledge of the matter. The developer, which is backed by logistics real estate investor GLP Pte, is working with advisers on the planned first-time share sale, said the people, who asked not to be identified as the process is private. A listing in the city-state could take place as soon as the end of this year, the people said. Deliberations are still ongoing and details of the offering including timing as well as size could change, said the people.
Tesla just reported first-quarter vehicle production and delivery numbers for 2022, delivering 310,048 electric vehicles and producing 305,407 cars. Over the same period last year, Tesla delivered 184,800 electric vehicles and produced 180,338 cars. Model 3 and Model Y vehicles comprised 95%, or 295,324, of deliveries in the first quarter of 2022, according to Tesla. The company produced 4,641 fewer cars than it delivered during the quarter citing “ongoing supply chain challenges and factory shutdowns.” Analysts expected deliveries of 317,000 vehicles for the first three months of 2022, according to estimates compiled by FactSet as of March 31. The estimates ranged from a low of 278,000 vehicle deliveries to a high of 357,000. Deliveries are the closest approximation to sales numbers reported by Tesla.
Tesla’s factory in Shanghai will remain closed on Monday (Apr 4), people familiar with the matter said, after a media report that the company planned to resume production at the facility on that day. The electric-vehicle maker told employees on Sunday that existing Covid restrictions remained in place, and asked staff to stay home and abide by community orders, according to an company memo seen by Bloomberg. Tesla has extended the shutdown of its Gigafactory a few times in the past week as Shanghai puts its 25 million residents in some form of lockdown. Reuters reported earlier that Tesla plans to resume production in the factory south-east of downtown Shanghai from Monday as some workers begin to return from a lockdown. The eastern half of the mega Chinese city – where the Tesla factory is located – remains under tight movement restrictions despite the end of a 4-day sweeping lockdown last Friday morning.
The European Union’s economics chief says Russia’s war with Ukraine will trigger a growth slowdown this year, warning the bloc’s existing growth forecast of 4% is now no longer viable. European commissioner for economics and taxation, Paolo Gentiloni, said Saturday that the Ukraine crisis will usher in a period of lower growth for the 19 countries sharing the euro. The bloc’s projection of 4% growth in 2022, issued shortly before Russia’s invasion of Ukraine on Feb. 24, will need to be revised downward, he said. However, in an attempt to take the sting out of the downbeat assessment, Gentiloni said there was no prospect of a recession. “The good thing is that we entered this crisis five weeks ago [on] a good footing, and we were estimating for this year 4% growth,” Gentiloni told CNBC’s Steve Sedgwick at the Ambrosetti Forum in Cernobbio, Italy.
Facebook parent Meta Platforms will stop insisting that employees have Covid booster shots in order to come to its facilities in the U.S., a spokesperson confirmed to CNBC on Friday. Technology companies have begun the process of luring their workers back to their corporate campuses. Meta, as well as Microsoft, held broad U.S. office reopenings on Monday. “We updated our requirements in early March to align with CDC guidance, and now Covid-19 boosters are no longer required for entry, though strongly recommended,” the spokesperson wrote in an email. “The primary vaccination requirement (one or two-shot series) remains in place.” The about-face comes less than three months after the social network operator announced rules for a return to the office.
Source: SGX Masnet, The Business Times, Bloomberg, Channel NewsAsia, Reuters, CNBC, PSR
Keppel Corporation – Another delay to potential combination of Keppel O&M and Sembcorp Marine
Recommendation: BUY (Maintained), Last Done: S$6.42
Target price: S$7.07, Analyst: Terence Chua
– Keppel Corp and Sembcorp Marine announced another delay to the potential combination of the two entities.
POEMS Podcast: Let the Money Talk
– Significant progress made on advancing the sale of Keppel Offshore & Marine’s (KOM) legacy rigs and associated receivables.
– Keppel Telecommunication & Transportation Limited (Keppel T&T) has entered into an agreement for the divestment of its entire stake in Keppel Logistics to Geodis International for a cash consideration of $80mn. We expect the divestment to improve the Group’s ability to meet its 15% ROE target.
– Maintain BUY with unchanged SOTP TP of S$7.07. We valued the Group based on the four new segments unveiled during Vision 2030 to better reflect the Group’s reporting segments going forward. Our TP translates to about 1.0x FY22e book value, in-line with its 5-year average. Catalysts expected from a successful resolution of its O&M unit.
Money Never Sleeps – Ep 6
Del Monte 3Q22 Results – SGX Company Insights Ep 47
Lendlease Global Commercial REIT – SGX Company Insights Ep 46
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