SPH

SPH: Morgan Stanley warned that SPH’s dividend policy is not sustainable and downgrades it to U/W. SPH paid out 114% of recurring earnings in FY14 and payout ratio for FY15E is expected to be 104%. Income from Seletar Mall opening in December 2014 is unlikely to sufficiently mitigate the decline in Media. As such, the counter risks downward adjustment of dividend by 5%, implying a yield of 4.9% vs the average of 5.8% since 2010.