MARKET UPDATES :
- KEPPEL Corp shares opened to a relatively muted market reaction on Monday, while Keppel Land’s shares surged, after the conglomerate unveiled a bid to take its real estate subsidiary private.Keppel Corp edged up six cents, or 0.7 per cent, to end the day at S$8.16 even as analysts applied bigger conglomerate discounts to their target prices.Keppel Land shares shot up 90 cents, or 25 per cent, to S$4.55 to hit a four-year high, as more investment analysts recommended minority shareholders to accept the offer for its generous price. Both the stocks were trading cum dividend.
- OUECT’s FY14 DPU was in line, at 100% of our full-year forecast, and 4.4% ahead of its forecast in prospectus. The better performance was primarily due to better-than-expected occupancy and rental reversions, as well as lower utilities costs. We believe there is more room for OUEB to grow in FY15, as the expiring leases have an average rent of S$9-10psf/month as compared to the committed rent of S$11.22-15.50psf/month for FY14 and average Grade A office rent of S$11.20psf/month.
- Tigerair’s consolidation and capacity rationalization is helping to lift its passenger load factors (+6ppts y/y to 82%), average fares (+16% y/y to S$114.9) and yields (+5% y/y to 7.22cents). Management expects the y/y improvement in passenger yields to continue as it continues to fine-tune its network and operations but it will also depend on market competition which remains fairly intense. No new aircraft scheduled for delivery in the coming year. However, Tigerair plans to bring back some of its A319 aircraft (which are currently idling) to replace the A320 aircraft that will be leased out.
- Ascendas India Trust – Catching the Indian tailwind-:In INR terms, 3Q15 revenues grew 6% y-o-y to INR 1.5bn. The stronger performance was due to contribution from the Aviator, which became operational in Jan’14 supported by higher revenus from Chennai. Net property income fell marginally to INR 0.9bn due to one-offs, but on a normalised basis should have increased by c.5% y-o-y instead. Distributable income grew by 2% to INR 566m but boosted by the appreciating INR, in SGD terms grew by a higher 6% to S$11.9m.
- Singapore continues its transition from what is effectively an emerging market economy (growth driven by increases in labor, 25% of GDP within manufacturing) to a developed market focused on productivity growth. A structural transformation-driven end to the 13-year bull market in the local currency will make unhedged Singapore holdings less attractive for yield investors. This drives a weak view for domestic consumption, but is also driving the already improving export numbers. This divergence will continue, therefore we focus our investment risk on rate sensitives and external demand sectors.
- KRISFLYER members will be able to redeem their miles for vouchers for travel on budget carriers Scoot and Tigerair from April.In addition, KrisFlyer members will be able to use their miles to pay for selected products on the two low-cost carriers. KrisFlyer is Singapore Airlines’ (SIA) frequent flyer programme.By the end of this year, Scoot and Tigerair plan to offer KrisFlyer members the option of earning KrisFlyer miles on Scoot and Tigerair.Scoot is wholly owned by SIA, which also has a 56 per cent stake in Tiger Airways.
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