SG Market (24 Jan 17)

Focus will be on the protectionist trade policies being rolled out by the new Trump administration and local corporate earnings.

Regional bourses opened mixed in Tokyo (-0.2%), Seoul (-0.2%) and Sydney (+0.5%).Technically, the STI remains in overbought territory with underlying support at 2,968 and topside resistance at 3,040.

Stocks to watch:
*Keppel DC REIT: 4Q16 results missed estimates as DPU of 1.31¢ (-20.1%) was diluted by an enlarged unit base arising from the acquisition of Keppel DC Singapore 3. This brought FY16 DPU to 6.14¢ (-5.7%). For the quarter. revenue grew 4.2% to $26.8m from increased contributions from Cardiff and Milan data centres, as well as higher variable income at its Singapore properties. NPI of $24.9m (+14.1%) was further lifted by lower property tax and expenses. Portfolio occupancy rose to 94.4% (+1.7ppt q/q) with WALE of 9.6 years (3Q16: 8.6 years), while aggregate leverage eased to 28.3% (-1.1ppt). NAV/share at $0.954.

*Mapletree Logistics Trust: Flat 3QFY17 of 1.87¢ was in line with estimates. Revenue of $95.5m (+7.4%) and NPI of $79.9m (+7.7%) were boosted by acquisitions/AEIs, as well as stronger performance in Hong Kong. However, distributable income of $46.8m (+0.8%) was crimped by a negative tax adjustment, while DPU was further diluted by increased distribution to perps holders. Occupancy slipped 0.3ppt q/q to 96.1% with WALE of 4.1 years. Aggregate leverage climbed 1.1% to 38.7%. NAV/unit at $1.03.

*Frasers Commercial Trust: Flat 1QFY17 DPU of 2.51¢ met expectations, while distributable income of $19.9m (+12%) was shored by capital distribution. Revenue of $39.7m (+0.1%) and NPI of $29.2m (-0.6%) stayed relatively flat as higher contribution from 357 Collins Street and a stronger AUD were offset by lower occupancy rates at China Square Central and Central Park due to redevelopment works and tenant adjustments. Overall portfolio occupancy was stable at 93% with WALE of 3.8 years, while aggregate leverage was unchanged at 36%. NAV/unit at $1.55.

*Ascott REIT: In line 4Q16; DPU slipped 1% y/y to 2.04¢, although distributable income rose 6% to $33.9m, which included a FX gain ($2m) arising from repayment of foreign currency bank loans with the divestment proceeds from Fortune Garden Apartments, and repayment of shareholders’ loan. Revenue grew 6% on increased contribution from recently-acquired Sheraton Tribeca New York Hotel in Apr '16, which lifted overall RevPAU by 2% to $148. However, excluding the acquisition, same-store-RevPAU tumbled 6% on weaker performances from China and UK assets. Aggregate leverage narrowed to 39.8% (-1.5ppt), and group remains on the lookout for accretive M&A opportunities in key gateway cities of Australia, Japan, Europe and the US. NAV/unit at $1.33.

*Cache Logistics Trust: 4Q16 results missed expectations as DPU tumbled 10.8% to 1.85¢ on a higher unit base, while distributable income fell 5.2% to $16.6m from increased finance costs and reduced capital distributions. Revenue and NPI rose to $27.3m (+13.5%) and $21.3m (+11.3%), respectively, driven by increased contribution from DHL Supply Chain Advanced Regional Centre and three Australian properties acquired in 4Q15. Portfolio occupancy remained stable at 96.4% with WALE of 3.9 years, while aggregate leverage crept up 1.9ppt q/q to 43.1%. NAV/unit at $0.78.

*Keppel Infra Trust: 4Q16 results met expectations although DPU was flat at 0.93¢, bringing FY16 DPU to 3.72¢ (+40.9%), post-merger of Keppel Merlimau Cogen in Jun '15. Quarter revenue fell to $152.2m (-5.2%) on lower tariffs at City Gas (-6.9%), reduced concessions (-27.9%) due to lower construction revenue following boiler upgrades in 4Q15, although partially offset by higher contribution from Basslink (+47.4%). NAV/share at $0.325..

*Soilbuild REIT: 4Q16 results in line despite a 2.7% slip in DPU to 1.57¢, which brought FY16 total payout to 6.091¢ (-6.1%), as an enlarged unit base offset the 4.1% growth in distributable income to $60.3m. Quarter revenue and NPI rose to $21.7m (+6.1%) and $18.9m (+8%), thanks to higher takings from Loyang Way, Bukit Batok Connection, Solaris and Eightrium properties. Overall portfolio occupancy slid to 89.6% (-5.2ppts q/q) with WALE of 3.4 years, while aggregate leverage stood at 37.6% (1.6ppts q/q). NAV/share at $0.72.

*UOL: Granted an option to purchase a residential freehold site at 45 Amber Road for $156m. The site currently holds a horticultural and gardening retail centre, which sits on a land area of 69,858 sf and plot ratio of 2.1, equating to a potential gfa of 146,702 sf ($1,063 psf ppr ex development charges).

*Genting HK: Expects to record a FY16 net loss in the range of US$500m-US$550m (FY15: US$2.1b net profit), mainly due an absence of a one-off accounting gain of US$1.57b and divestment gain of US658.6m, both arising from the partial stake sale in associate Norwegian Cruise Line (NCL) in 2015. Additionally, an impairment loss of ~US$300m will be taken on its remaining stake in NCL from a decline in fair value in late-2016. Further, group incurred a one-time start-up and marketing costs, as well as additional depreciation expenses related to its premium liner Crystal cruise brands and newly acquired German shipyards.

*Banyan Tree: Established 50:50 JVCo with China Vanke, via an asset injection of Banyan Tree's China properties to be determined by an independent valuation. The current book value of these assets is ~Rmb720m. In association with the JV, China Vanke will take a 5% equity take in Banyan Tree through a private placement at $0.60/share.

*IHC: EGM to remove current board members has been approved. Separately, OUE purchased 208.1m IHC shares on 23 Jan for $0.077 apiece, and has emerged as a substantial shareholder with a 12.5% stake.*Swing Media: Proposed placement of 8.5m new shares (19.1% share capital) at $0.60 each to seven individuals, to raise net proceeds of $5.1m intended for working capital (20%) and inorganic growth (80%).