SG Market (22 Jan 14)

Market Roundup: US stocks ended mostly higher on optimism over global economic growth but disappointing results from Verzon Communications, Travelers and Johnson & Johnson weighed on the Dow. The IMF raised its 2014 world economic growth forecast to 3.7% from 3.6%, citing strengthening but uneven recovery as countries move away from austerity budgets and financial systems improve. Among the advanced economies, US will expand 2.8% vs earlier 2.6% forecast, UK 2.4% vs 1.9% and Japan 1.7% vs 1.2%.. China is projected to grow 7.5% this year. Asian and European markets perked up yestersay after China’s central bank injected liquidity into money markets as borrowing spiked on demand for cash ahead of the Lunar New Year holidays. Despite the slight cheer, the S’pore market is still mired in directionless trading with the STI trapped within a tight trading range. Latest batch of results from MIT, CMT, ART, FCT and Cache are largely in line and unlikely to spur sentiment given that REIT sector is currently out of favour. But Rex Int’l may see some interest after snaring five new offshore exploration licenses in Norway. Kim Heng makes trading debut today. Stocks to watch: *Mapletree Industrial Trust: 3QFY14 distributable income of $42.2m (+12% y/y) and DPU of 2.51¢ (+8.2%) continued its uptrend since 1QFY11 as gross revenue (+9.3%) and NPI (+12%) benefiDespite the slight cheertted from better average passing rental rate of $1.73 (+7.5% y/y, +1.8% q/q) and positive rental reversions achieved across all property segments, higher occupancies in its flatted factories and lower utilities expenses. But portfolio occupancy dipped to 92.5% upon completion of K&S Corporate HQ with weighted average lease expiry of 2.5 years. Aggregate leverage remained at 36.3% with average debt tenor of 2.8 years. End Dec NAV/unit stood at $1.11. *CMT: 4Q13 DPU up 15% y/y to 2.72¢, bringing FY13 DPU to 10.27¢ (+9%), implying a 5.7% yield. NPI expanded 11% y/y to $125.5m, driven by positive rent reversions and continued high occupancy rate of 98.5%. For FY13, tenants’ sales psf increased 2.5% and shopper traffic grew 3.1% y/y. End ’13 aggregate leverage stood at 35.3% with NAV/unit of $1.74. *Ascott Residence Trust: 4Q13 distributable income rose 15% y/y to $26.3m but DPU dropped 34% to 1.33¢. Excluding the dilutive effect from its rights issue in Dec ’13, DPU would have been 2% lower at 1.96¢. Revenue grew 11% to $83.9m due to additional contributions from properties acquired in Nov ’12 and Jun ’13 and stronger performance from Belgium and France. But RevPAU dipped 7% to $129/day amid weakness in Philippines and Japan (arising from depreciation of JPY) and lower room rates from its newly acquired China properties. Aggregate leverage improved to 34% from 41.1% in Sep and average debt maturity extended to 4.2 years. NAV/unit of $1.37 was supported by a revaluation surplus of $74.1m. *Frasers Centrepoint Trust: 1QFY14 distributable income gained 4.3% y/y to $20.6m, leading to a 4.2% rise in DPU to 2.5¢. Both revenue and NPI rose 5% and 4.4% to $40m and $28.3m respectively, due mainly to improved performance from Causeway Point. Portfolio occupancy stood at 96.7%, -1.7 ppt from preceding quarter, while leverage was a comfortable 29.7%. End '13 NAV/unit was unchanged q/q at $1.77. *Cache Logistics: 4Q13 distributable income of $16.6m (+9.6% y/y, +0.6% q/q) and DPU of of 2.126¢ (-0.8% y/y, +0.5% q/q) delivered FY13 DPU of 8.644¢ (+3.3%). Gross revenue and NPI grew 8.2% and 7.1% y/y to $20.7m and $19.6m on built-in rental escalation and contributions from Precise Two, acquired in Apr ‘13. Portfolio occupancy was maintained at 100% with weighted lease to expiy of 3.1 years and very low renewal risk for 2014. Aggregate leverage remained at a conservative 29.1% with all-in financing cost of 3.48% and average debt maturity of 1.9 years. Inclusive of a $6.7m revaluation gain, NAV/unit ended at $0.98. *Jaya: Turned in 2QFY14 net profit of US$7.6m (-24% y/y) on revenue of US$29.6m (-24%) but excluding vessel sales, charter revenue would have been 31% higher from improved fleet utilization of 83% vs 80% a year ago and higher charter rates. Stripping out one-time charges and gains from vessel sales, bottomline was 16% stronger than previous year. Future revenue stream is backed by a robust chartering order book of US$327m (+82%). Higher interim DPS of 1¢ declared. *Keppel T&T: FY13 net profit rose 13.9% to $63.2m on the back of the 17.6% growth in revenue to $161.7m with higher sales coming from both data centre and logistics operations. But the gain in operating profit, whuc surged 32% to $33.3m was largely derived from the data centre division as its China logistics operations reported lower earnings due to start-up and implementation costs of newly developed projects. Final DPS of 3.5¢ is maintained. *Rex Int’l: JV Lime Petroleum Norway has been awarded five new offshore licenses by the Norwegian government for exploration in the North Sea, Norwegian Sea and Barents Sea. Lime has also been accorded Pre-qualified Petroleum Company status, allowing the company to apply for a cash tax refund for 78% of exploration costs under the Norwegian Petroleum Tax Act. *Ntegrator: Clinched four major contracts worth $4m from repeat customers Viettel group, MOD Myanmar, Mitsubishi Electric for the supply of equipment and services to Vietnam, Myanmar and Singapore. *Keppel Land: Acquired 3ha residential site in West Jakarta for Rp400.8b ($42m) to develop a high-rise condo with >1,200 units and 60 ancillary shophouses. First phase, which targets the mid-income segment, is expected to be launched in 1Q15. *Courts Asia: First and largest 170,000 sf Big-Box Megastore in Bekasi, Indonesia, is expected to be completed in Jun and open ahead of schedule by Sep ’14. Meanwhile, the group has seen a successful start for its second Big-Box Megastore (66,000 sf) in Subang Jaya, Malaysia, which opened this month. *Stamford Land: Lodged an application to redevelop its Sir Stamford Circular Quay hotel in Sydney into a 19-storey residential and commercial building. With a GFA of 14,835 sqm, the proposed building will comprise 104 residential apartments and 1,331 sqm of retail and commercial space. *Kim Heng: Based on the total invitation size of 174m shares (171m placement, 3m public), the IPO is 5.8x subscribed. Among its new investors allotted placement shares include Havenport Asset Management (16m) and Chew Thiam Keng (9m), CEO of Ezion Holdings. Trading will commence at 9am on 22 Jan. *Memstar: Prominent local investor Alan Wang who runs the high profile fund Asdew Acquisitions purchased another 9m shares @ $0.106 on 20 Jan, raising his stake to 7.3% from 6.97%.