DBS Equity Research: Wired Daily 14 Oct 2014

kiasutrader

Publish date: Tue, 14 Oct 2014, 10:00 AM

Singapore 3Q GDP +2.4% y-o-y, slightly below consensus

SPH REIT - DPU of 1.39Scts exceeded IPO forecasts by 6.1%. Maintain HOLD, TP revised to S$1.03

The Singapore economy performed slightly worse than expected in the third quarter of 2014, growing 2.4% y-o-y, according to advance estimates released by the Ministry of Trade and Industry this morning. This fell short of the 2.7% consensus growth forecast, but kept pace with growth in Q2. Manufacturing grew 1.4% y-o-y, supported by the biomedical and electronics clusters. Growth in the services sector picked up slightly to 2.9% y-o-y, boosted by the finance & insurance and business services segments. Construction's growth moderated to 1.4% y-o-y, from 4.1% the previous quarter, due to weaker private sector construction activities. On a q-o-q basis, the economy grew 1.2%, a turnaround from the 0.1% contraction in the previous quarter. This was better than the annualised

0.8% market growth forecast.

The Monetary Authority of Singapore (MAS) has kept its monetary policy unchanged, keeping the Singapore dollar on an appreciating path to guard against inflation. MAS said in its twice-yearly monetary policy statement that it would "maintain its policy of a modest and gradual appreciation of the S$NEER policy band" with no change to the slope, width and midpoint of the band within which the trade-weighted Singapore dollar fluctuates.

DPU of 1.39Scts for SPH REIT exceeded IPO forecasts by 6.1%. Revenue and net property income of S$51.1m and S$38.0m were 2.6% and 5.6% higher against forecast. Portfolio rental reversions remained strong - Paragon achieved rental uplifts of 10.5% YTD, while Clementi Mall secured 5.5% higher rents YTD. However, we note that tenant sales for Paragon and Clementi mall were down 4.5% and 3.3% y-o-y, respectively, while foot traffic remained stable. The property portfolio was revalued up by c.3.4% to S$3.05bn, lifting NAV per share by 4.4% to S$0.93. Gearing headed lower to 26.0% as a result. At current price, stock appears fairly valued at a forward yield of 5.4%. We maintain our HOLD call given its premium valuations vs peers. Target price revised to S$ 1.03 (Prev S$ 1.00).

Keppel Land will strengthen its commercial portfolio in the Philippines by expanding the SM-KL project, its mixed-use development with Phase Two comprising a 42-storey office building and an extension of The Podium, an existing fivestorey retail component in the Ortigas central business district (CBD). The total construction cost for Phase Two is S$336m. To be completed in 2019, the new office tower will offer a net leasable area (NLA) of over 89,000 sm of premium grade office space and will be sited above the retail mall. The expansion of the retail mall will add over 34,000 sm of retail space, bringing the total retail NLA to over 50,000 sm when completed in 2016.

SMRT Corporation said it has decided not to make a bid at this stage to acquire British taxi company Addison Lee. The company said it is constantly looking out for investment opportunities that contribute to sustainable growth. In this regard, the company was approached by an investment bank on the possible sale of Addison Lee.

Viking Offshore and Marine proposed to issue 5% redeemable exchangeable bonds in the principal amount of up to S$12.5m to Luminor Pacific Fund, a private equity fund. The Exchange Shares shall be issued at an issue price equivalent to the lower of S$0.175, or a discount of 10% to the weighted average price based on 30 trading days immediately prior to the date of the Exercise Notice. Proceeds will be used for the purchase of the Land Rig from Beijing Forpetro Sino-Rig.

Asia Fashion Holdings is expected to report a significant increase in profitability and a significantly higher operating profit for 3Q14 as compared to the preceding financial quarters and financial year. The significant increase in the Group's financial performance for 3Q14 was mainly attributed to the consolidation of the financial results of China Construction Material (Hong Kong) Limited and its subsidiaries.

Source: DBS

SPHREIT (SK6U)

Related Stocks

Market Buzz

Discussions

Be the first to like this. Showing 0 of 0 comments

Featured Posts

MQ Chat

New Update. Discover investment communities that resonate with your ideas

VCPlus

Trade Confidently & Analyze Charts Conveniently - Download VCPlus IOS & Android App Now!

Latest Videos