Temasek Holdings (TH) has announced on 16 October 2018 that it will be issuing a five-year corporate bond with a coupon rate of 2.7 per cent per annum payable semi-annually on 25 April and 25 October each year, and maturing on 25 October 2023. The T2023 – S$ bond is issued through Temasek’s wholly-owned subsidiary, Temasek Financial (IV) Private Limited, under its $5 billion Guaranteed Medium Term Note Programme.
With a rising interest rate environment comes the dilemma among investors when it comes to choosing between property developers or real estate investment trusts (REITs) counters. The recent buoyancy in new home sales and news headlines about potential home price appreciation (HPA) have warranted some attention among real estate type stocks, be it developers or Reits stocks. What would be the impacts of rising interest rates and debt levels on these two sectors?
When we wrote about Nobel Design way back in 21 April 2017, the article spoke about its cash level and why we liked that stock. In short, we spotted great value in it – there was so much value in the stock that we had to write about it!
Industrials were amongst Singapore’s three best performing Sectors in September. The 10 largest capitalised Industrial stocks averaged a 7.1% total return for the month, and followed with 1.2% average gains for the first two sessions of October. Of these Industrial 10 stocks, the five with the highest five-year history of comparative volatility to the STI (YZJ, Keppel Corp, Sembcorp Marine, Sembcorp Ind & ST Engineering) generated the five strongest performances in Sep, averaging a 12.7% gain.
In August, US President Trump chided Federal Reserve policymakers for supporting further interest rate hikes which would decelerate the country’s economic growth. Since December 2015, policymakers have tightened the interest rate 7 times, of which 5 times were during Trump’s Presidency. The irony was that Trump had previously complained that the Fed was too loose with the US money supply before he took office!
The banks have been struggling to stay afloat for the past two months after the correction started in May this year. The falls have been characterized by short rebounds followed by bigger corrections, and each bounce lacked the strength to hold onto gains.
Following our feature of Mr. Terence Tea, Chairman and CEO of local-listed Accrelist and Jubilee Holdings, the shrewd businessman has recently been conferred the honourary title of Dato in Malaysia.
On 3 July 2018, I contributed a piece “Property Stocks Are In Bear Market?” to this financial portal that attracted more than 1 million users in 2017. Some or most of the property stocks were already in bear market territory on that day. Two days later on 5 July, the government announced property cooling measures to stop property prices from escalating. Such a move more or less condemned property counters to bear market territory.
Investors’ Corner (Frasers Logistics & Industrial Trust, Hi-P International, Singapore Technologies Engineering, China Aviation Oil)
Frasers Logistics & Industrial Trust’s 3Q18 results came in within our expectations with gross revenue and NPI rising 22.6% and 21.7% respectively. This was driven largely by contribution from acquisitions in Australia, annual fixed rental increment in the group’s Australia portfolio as well as incremental NPI from its Europe portfolio acquired in May-18. As a result, DPU improved 3.2% to $0.0541. Overall portfolio metrics remained healthy with high occupancy at 99.3% and only 0.1% and 3.4% of its leases expiring for 4Q18 and FY19, while aggregate leverage stood at 36.3% following the completion of Europe portfolio acquisition. Although there has been an increase in industrial supply in Sydney and Melbourne, demand continues to be strong which can be seen from the 4.6% growth in prime grade net face rents for Sydney in 2Q18. For Melbourne, prime grade net face rents grew 1.1%. Maintain BUY. OCBC Investment (3 Aug)
It is not a good day for Asian equities; it is a bad day for banking stocks in Singapore; and things are not looking rosy in the near future. It is a “tale of two cities” whereby we have a Bull Run in the US...