Tuesday, April 21, 2015

SG Market (21 Apr 15)

Singapore stocks are expected to open higher this morning, following the rebound in Wall Street, taking cue from China’s RRR cuts over the weekend and strong gains in tech companies.

Regional bourses are trading higher this morning in Tokyo (+0.4%) and Sydney (+0.9%), although Seoul (-0.1%) opened slightly softer.

Technically, STI is still trading in upward trend channel, with key support-resistance levels tipped at 3,500 and 3,561 respectively.

Stocks to watch:
*CapitaMall Trust: 1Q15 DPU results in line, with DPU at 2.68¢ (+4.2% y/y, -6.4% q/q), representing an annualized yield of 4.8%. Gross revenue of $167.4m (+1.6%) was aided by the completion of AEI works at Bugis Junction, while the other malls, except for IMM, saw higher rental achieved on new and renewed leases. NPI grew 3% to $117.7m, as a result of lower utilities expenses partially offset by higher marketing expenses. Portfolio occupancy was at 97.2% (4Q14 at 98.8%), while leverage unchanged at 33.8%, with average debt cost of 3.4% and tenor of 5.1 years. NAV/unit at $1.83.

*Mapletree Logistics Trust: 4QFY15 results in-line, with DPU down 2% y/y to 1.85¢, taking FY15 DPU to 7.5¢ (+2%), or a yield of 6.1%. Gross revenue rose 6% to $84.7m, while NPI was up 3% to $70.3m, led by higher contributions from six properties acquired in China, Singapore, Malaysia and Korea during the financial year, offset by lower occupancy in several conversions of single user properties in Singapore and absence of revenue from 5B Toh Guan Road Ease, which is undergoing AEI. Portfolio occupancy stood at 96.7% (3QFY15 at 96.9%) with WALE of 4.3 years, and average debt tenor of 3.6 years. Leverage stood at 34.3%. NAV/unit at $1.03.

*Sabana Shariah REIT: 1QFY15 DPU of 1.78¢ came in 5.3% lower y/y but flat q/q, yielding 8.1% annualized yield. Gross revenue and NPI was at 3.2% and 1.1% respectively, led by higher contributions from 10 Changi South Street 2, which was acquired in Dec ‘14, but DPU was lower due to smaller gains on fair value derivatives and dilution effect of new units issued. Portfolio occupancy was at 90.6%, WALE of 2.2 years, leverage at 38.0% and average debt cost of 4.2% and tenor of 2.8 years. NAV/unit at $1.06.

*Noble: Business Times highlighted that last Friday’s AGM saw Noble’s chairman and its largest shareholder, Richard Elman repeatedly dodging shareholder’s queries on the group's accounting practices, but steering AGM's focus to resolutions on Noble's financial statements and reports of its directors and auditors. The rebuff of shareholders queries has raised further concern, and also triggered responses from Iceberg Research which said that Mr Elman's responses to shareholders reveal "insecurity and arrogance". Meanwhile, SIAS announced that it will be seeking clarification from Noble as to whether concerns of shareholders expressed in the media are correct, and if so, why?

*Starhill Global: Enters conditional agreement to buy Myer Center Adelaide for A$288m. Property comprises 620,000sf retail space, 98,000sf of office space and four basement levels of 467 carpark lots. Acquisition yields 6.6% and is 2.8% yield accretive on pro-forma basis but will raise leverage from 28.6% to 35.3%.

*OKH Global: Entered MOU with government of Shuangliu County, China, to acquire 1.4m sf of land to develop an automotive parts logistics park within 3 years. The local government will also support and facilitate the project.

*KSH: Secured $33.2m construction project for a proposed 3-storey University Sports Centre Building at NUS, with completion targeted in May 2017.

*SGX: Chengdu Municipal Finance Affairs Office announced that they have signed a MOU to cooperate on facilitating capital raising by companies from Chengdu on SGX.

*Technics O&G: Won an ECPI contract to fabricate steel structure worth $5.1m.

*Luzhou Bio-Chem Technology: Expects 1Q15 to be profitable due to favourable domestic market conditions, reflected in higher ASPs and volume sold.

*UOL: Unconditionally and irrevocably guarantees $175m 2.50% notes due 2018 issued by subsidiary under its $1b multicurrency MTN programme.

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