05 Sept 2013 ~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
This product is made available by your Central Execution Team, for you as TRs of OCBC Securities to help you with your business and therefore it is confidential and only for internal circulation. It is not intended for onward circulation to non-OSPL TRs, clients or any other third party in this or any other version. Neither is this intended to be relied upon as a sole basis for any recommendation. TRs must also consider their clients' investment objectives, financial position and needs when intending to make or making any recommendation. For the front desk, by the front desk. All feedback to make this a better product is welcome.
Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day :The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.
- SUN TZU
Singapore: The Day AheadSINGAPORE DAYBOOK :SGX derivatives continue ascent. August figures also show trading in securities going the other way. SINGAPORE Exchange (SGX) trading volumes for derivatives continued to grow from a year ago, but August numbers suggest a slowdown in securities trading.
The local bourse yesterday reported that total futures and options volume rose 32 per cent year-on-year to 8.6 million contracts in August.
This was boosted by a 140 per cent year-on-year increase in FTSE China A50 index futures volume to 1.8 million contracts. Trading volumes for MSCI Taiwan, SGX CNX Nifty and Nikkei 225 index futures also rose for the month.
But Phillip Securities analyst Ken Ang expects derivatives' volume to be lower quarter-on-quarter for the period ending September. Quarter-to-date, its daily average contracts stand at about 400,000, compared with 520,000 in the previous quarter.
(Source: The Business Times)
MARKET SCOOP
Amber Rd site on sale, owner seeking more than S$63m
PowerGas may appeal against EMA'sS$1.5m fine on gas leak incident
SIA to use A380 to serveShanghai, boosting seat capacity 12%
Moody's: Singapore Reits insulated from rising interest rates
Mapletree raises maximum of US$1.4b for China-focused private fund
DTZ puts Tat Hong's Gul Crescent site up for sale, indicative price about S$33m
Cordlife to buy 19.92% interest inM'sian blood bank for RM29.58m
FDS Networks terminates S$165m RTO, targets new firm
(Source: The Business Times) NOMURA Securities says... SPH REIT | NEUTRAL | TP: S$0.94
SPH REIT offers the highest exposure to the prime Orchard retail market amongst S-REITs, as the Paragon asset accounts for over 80% of initial portfolio value and is the primary driver of valuation
The Paragon Mall has a solid operating track record, consistently achieving committed occupancy of 100% and a compounded annual growth of 7% in rents over the past 10 years
It appears average rent at Paragon is still competitive vs. ION Orchard and Wisma Atria
Coupled with limited new supply of prime retail space projected in FY13-14F, we believe there is potential reversion upside for leases expiring in FY14F
Medical suites/offices account for 32% of Paragon's total NLA currently and its proximity to the Mt. Elizabeth Hospital has contributed to its popularity amongst healthcare providers
Upon completion of the Seletar Mall at end-2014F, we believe there is potential for SPH REIT to exercise the ROFR to acquire the asset, which could add c. 5% to distribution on our numbers, assuming entry yield of 5.5% and 75% debt financing at a WACC of 3.6%
Our TP of SGD0.94 is based on the average of 1) our NAV estimate of SGD0.95 and 2) ascribed FY14F yield of 5.5%
Our TP implies a potential total return of 3.3% (potential downside of 2.1% + FY14F yield of 5.4%)
Considering the flattish distribution in the near term, we believe the stock is fairly priced for now
We initiate coverage with a Neutral rating
OCBC Securities says ...
SINGAPORE PRESS HOLDINGS | HOLD | TP: S$4.14
As anticipated, SPH conducted a successful REIT spin-off for Paragon and Clementi Mall, yielding substantial cash proceeds and subsequently an 18 S-cents bonus dividend for shareholders
We see the establishment of a REIT subsidiary vehicle as a major positive for the group's mall development business and believe management's decision to hold a 70% majority stake makes significant sense - this enables accounting consolidation and for the bulk of property earnings to continue accreting to SPH
That said, the 18 S-cents bonus cash dividend was somewhat below view, particularly as the group was already sitting on an fairly hefty war-chest of ~S$0.9b investible
funds as at end 3QFY13
We believe that, for investors, a key performance indicator for the group ahead is likely to be the degree in which management can expediently deploy excess capital for
attractive returns
Still seeing headwinds for the print business In addition, the latest 3QFY13 figures presented a picture of continued headwinds for the group's core print business
Over 3QFY13, operating revenue from the key Newspaper and Magazine segment
fell 3.3% to S$259.3m
Given the cumulative impact from cooling measures and hawkish loan requirements on the property and automobile sectors, conditions for the print business remain
Challenging
We saw pressure on 3QFY13 ad revenues, which fell 4.5% YoY in 3QFY13, and circulation revenues also decreased S$4.9m YoY (down 3.2%) as the physical subscription base declined
Given current headwinds for the print business and limited visibility in terms of catalysts ahead, we believe the risk-reward proposition for the counter has turned fairly neutral
Downgrade to HOLD with a lowered fair value estimate of S$4.14, versus S$4.94 (before the REIT spin-off) previously
Our barometer for an upturn in outlook ahead consists of two key groups of operating metrics: for its print businesses - ad and circulation revenue growth; and for its retail
property segment - expedient and accretive capital deployment DBS VICKERS Securities says... GLOBAL LOGISTIC PROPERTIES | BUY | TP: S$3.31
GLP announced it is selling 2 wholly owned properties and 7 assets currently held under its GLP Japan Income Partners Fund I, in which it has a 33.3% stake, to GLP J-REIT for US$553.9m
The 9 properties have a total GFA of 310,000sm, of which 58% are located in Tokyo or Greater Tokyo and the remaining in Osaka, Nagoya, Hiroshima and Sapporo
The sale of the 7 properties held under the fund is expected to be completed by Oct 2013 while the divestment of the remaining 2 is expected to be completed in Mar 2014
The 7 assets belonging to the income fund, managed by GLP, is expected to be transacted at a cap rate of 6% vs entry yield of 7.5%, which should generate a net levered IRR in excess of 46% since acquisition in Feb 2012
Post the sale, GLP intends to maintain its 15% stake in the J-REIT and should recognise net proceeds of US$130m (after factoring its estimated share of the REIT's funding requirements)
These proceeds are expected to be redeployed to its development activities in China, Japan and Brazil
The latest transaction is anticipated as the group had earlier identified asset divestments into the J-REIT as an avenue to raise funds for its capex programme
While its balance sheet remains healthy with a net debt to asset ratio of 9.2% and gross cash of US$1.8bn as at Jun-2013, it is aiming to grow its portfolio GFA by 25% this year
Our current FY14 numbers have not factored in the above gains at the fund level
We continue to like GLP for its strong execution track record and its ability to create value from its development and fund management activities
Maintain BUY and S$3.31 TP |
No comments:
Post a Comment