DBS Equity Research: Wired Daily 18 Mar 2015

kiasutrader

Publish date: Thu, 19 Mar 2015, 04:16 PM

Parkway Life REIT - Acquires five healthcare properties in Japan. Maintain BUY, TP S$2.66.

Parkway Life REIT (Plife REIT) announced the acquisition of five health-care related properties (nursing & group homes) in Japan for a combined purchase consideration of JPY 5,997m (S$69.7m). Initial yield is estimated to be c.6.6%, which is in line with recent transactions executed by P-life REIT. Maintain BUY, TP S$2.66. We continue to like Plife REIT for its strong earnings visibility and prudent capital management strategies employed by the Manager. Catalysts will hinge on further acquisitions given a conservative gearing of c.37%. Stock offers a steady 5.2%-5.3% yield.

HPH Trust has issued (i) US$500m 2.25% guaranteed notes due 2018 and (ii) US$500m 2.875% guaranteed notes due 2020. The Trust intends to use the net proceeds from the issuance of the Notes to refinance certain indebtedness owed by subsidiaries of HPH Trust, indebtedness falling due in the near term and indebtedness which would provide an economic benefit to HPH Trust upon early repayment.

Olam International will be issuing A$125m fixed rate senior unsecured notes due 2020. The Notes will bear interest at a fixed rate of 4.875% per annum payable annually in arrears. Proceeds will be used by the Group for working capital purposes and general corporate purposes.

Singtel has priced a S$150m, 5.5-year fixed rate notes issue, which will be issued on 24 March 2015. The Notes will be guaranteed by Singtel. The Notes, denominated in Singapore dollars, will mature on 24 September 2020. The net proceeds will be used to fund the ordinary course of business.

Tat Hong Holdings has disposed of its property at 18 Sungei Kadut Avenue, Singapore, for a cash consideration of S$7.0m. The disposal is in line with its plans to improve operating efficiency by consolidating its Singapore operations in the Tuas area and by moving some of its less time-sensitive operations to Johor, Malaysia. The Group would realise a gain of approximately S$4.1m after deducting expenses.

Tye Soon intends to sell its properties at Waterloo Centre to ValueMax Properties, a wholly-owned subsidiary of ValueMax Group for S$11m. Tye Soon expects a net gain of S$7.9m, after deducting expenses. Proceeds from the sale will be used as general working capital and to reduce bank borrowings. There may also be a distribution by way of dividend to the company's shareholders, the group said.

Singapore's non-oil domestic exports (NODX) fell an unexpectedly sharp 9.7% y-o-y in February. NODX's drop last month - bigger than the 0.9% dip consensus had projected - was the steepest in two years, and came after three straight months of growth - 0.8% in November, 1.3% in December and 4.3% in January. Month on month, the NODX declined by a seasonally-adjusted 9.4%. Except to South Korea, the US, Thailand and Malaysia, NODX shipments to Singapore's top 10 markets tumbled in February; China, Japan and Taiwan were the three top contributors to the NODX's poor showing. The electronic NODX, up 5.5% in January, slipped 12.5% y-o-y last month - the weakest since May 14. The non-electronic NODX dropped 8.5%, after a 4.4% increase in the previous month.

US stocks fell as commodity and consumer shares slumped before the FED's interest rate decision. Investors watch if the Fed removes the word describing its stance to raising rates as 'patient', doing so suggests a rate hike that's sooner rather than later. Our economist thinks if the FED does remove the word; the start of rate hike will more likely be in September rather than June. More generally, our economist says even if the Fed does pull the trigger on rates this year, the data suggests it is unlikely to go very far very fast thereafter.

Source: DBS

ParkwayLife Reit (C2PU)HPH Trust SGD (P7VU)Olam Intl (O32)Singtel (Z74)

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