Stock Market Analysis: Sponsor Actively Expanding Portfolio

1. ‘BBB’ rating assigned by Fitch
2. Gearing to increase to 36%
3. Trading at 6.0% FY18F yield

Sponsor Actively Expanding Portfolio

The Ascott Limited, Ascott Residence Trust’s (ART) sponsor and a wholly-owned business unit of CapitaLand, has been actively growing its serviced residence (SR) portfolio globally and securing its market leadership in various geographies. Earlier this month, The Ascott announced the acquisition of a prime SR in the Jakarta CBD, further strengthening its position as the largest SR operator in Indonesia.

Besides Indonesia, The Ascott is also the largest SR operator in five other SEA countries. This investment comes on the back of strategic moves in other regions: the acquisition of an 80% stake in Synergy Global Housing, a corporate housing provider in the US, and the increase of its stake in Quest Apartment Hotels from 20% to 80%, which makes The Ascott the largest serviced SR operator in Australasia.

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'BBB' Rating Assigned by Fitch

Fitch Ratings has assigned ART a Long-Term Issuer Default Rating of 'BBB' with a Stable Outlook. Notably, in the analysis released by Fitch, ART's 'BBB' rating was compared to peers such as CDL Hospitality Trusts (CDLHT, BBB- /Stable), Host Hotels & Resorts, Inc. (Host Inc, BBB/Stable) and Mapletree Industrial Trust (MIT, BBB+/Stable). Despite CDLHT having a stronger financial profile, Fitch favours ART for its more geographically diversified portfolio and better cash flow visibility stemming from its long-stay tenants.

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Gearing Expected to Come to ~36% Post AOS Acquisition

ART’s gearing as of 30 Jun 2017 was 32.4%, though this is expected to increase to 36% after the acquisition of DoubleTree by Hilton Hotel New York in Aug and that of Ascott Orchard Singapore expected next month. ART's unencumbered assets/unsecured debt ratio stood at 2.9x, substantially higher than the 2.0x ratio Fitch has identified as the minimum level for investment grade real estate investment trusts to support strong financing flexibility and limit the subordination of unsecured creditors' interests.

We continue to be positive on the geographical diversification of ART’s portfolio and the support of a strong sponsor, but believe the REIT could trade at a more attractive yield. Against yesterday’s closing price, ART is trading at 5.2% FY17F yield and 6.0% FY18F yield.

Maintain HOLD with a fair value of S$1.10.

More update:  Stocks To Watch, 2017 Stock Market Outlook, Stock Market Investing Outlook & Investment Outlook 2017

Singapore Stock market Briefing: STI up 0.75%

Expect some good news today............

The Straits Times Index (STI) ended 24.11 points or 0.75% higher to 3236.15, taking the year-to-date performance to +12.34%.

The top Good stocks were DBS, which gained 1.80%, OCBC Bank, which gained 0.99%, UOB, which gained 1.45%, SGX, which gained 0.13% and Singtel, with a 0.82% advance.

The FTSE ST Mid Cap Index gained 0.40%, while the FTSE ST Small Cap Index rose 0.65%.

According to OCBC Investment Research, US stocks rose on Wednesday, with the Dow industrials ending a four-day losing streak and the small-cap Russell 2000 notching a record close as President Donald Trump and congressional Republicans touted a sweeping tax overhaul.

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Six out of 11 S&P 500 industries finished higher, led by Financials with 1.30% and Information Technology with 1.14%, whilst Utilities with -1.34% and Real Estate with -0.84% led the declines.

"The rebound on Wall Street overnight is likely to provide a modest boost to the local bourse today," OCBC said.

Singapore Market Penny Stock To Buy

1. OCEAN SKY INTL
2. VALUETRONICS
3. MAN ORIENTAL USD
4. MENCAST
5. UMS

So Earn more these Intraday stocks with our Stock Recommendations

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Singapore Stock market Analysis fo Delfi Ltd

• Indonesia cuts key rate again
• Stable 2H sales expected vs. 1H
• Investments for the long term

Soft Consumption for Key Market Indonesia

 

Delfi Ltd’s key markets have been Indonesia and Philippines, with Indonesia typically accounting for about 70% of overall revenue. As of 1H17, Delfi saw lower sales in Indonesia YoY amid the weak retail sales environment and its own product rationalization exercise to focus on core brands. Last Friday, Indonesia’s central bank cut its interest rate for the second consecutive month, against the backdrop of soft domestic consumption growth. Overall, management expects operating environment to remain challenging amid uncertain economic conditions in its key markets.

Read more -HOW AFFECTED SINGAPORE AIRLINES SHARE PRICE

Bright Spots

Management has been making efforts to improve the quality of earnings. The product rationalization programme is an example, whereby the group had eliminated lower performing SKUs, with the bulk of elimination made in late FY16, so that they could focus on growing sales of their core brands. Particularly, in the last two months of 2Q17, sales for Own Brands products saw a double digit growth in Indonesia.

In addition, the group has been able to maintain a healthy level of gross profit margin at around 30%, with 1H17 at ~33% vs. a threeyear average of ~32%, backed by initiatives such as pricing and right-sizing adjustments, as well as pushing for higher sales of premium products.

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But High Expenditures

With continuous investments being made in various aspects of the business such as brand building, capacity, distribution capabilities and supply chain integration, realizing benefits from these investments would be pertinent to sustaining growth for the long term. However, costs would likely remain high.

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On the expectation of stable sales in 2H vs. 1H, FY17 revenue would still be lower YoY, and with higher expenditure, management has also guided for lower profitability this year.

Notably, the group was in a net cash position of US$23.5m as of 30 Jun-17, and has paid 3.01 S-cents/share of dividends YTD. They have also formed strategic initiatives with Japan’s Yuraku Confectionery and South Korea’s Orion Corporation. With that said, due to an internal reallocation of resources, we are ceasing coverage on the stock..

More update:  Stocks To Watch, 2017 Stock Market Outlook, Stock Market Investing Outlook & Investment Outlook 2017

Singapore Airlines Share Price History

Singapore Airlines Limited (SGX: C6L) a synonym for great care with compassion and luxury with trust, is a renowned national airline of Singapore. It is registered in Singapore SGX as an air transporter to serve passengers and deliver cargos at their respective destination.

 

Aside from its namesake full-service airline it also owns a majority stake in SIA Engineering Company; a company well known for providing aircraft maintenance, repair, and overhaul (MRO) services in across nine countries, with a portfolio of 27 joint ventures, including with Boeing and Rolls-Royce.  

But in spite of such a recognizable name, this big player of aviation market also shows a decline of about 13% in its stock prices last year. The reason behind can many but to acquire the actual one is our duty, so as to stay protected and secure our valuable investment...Read More -How Affected Singapore Airlines Share Price

Singapore Stock Market Analysis of CapitaLand Commercial Trust

• Agreed property value of S$2.1b
• Initial NPI yield of 3.6%
• Dilution from rights issue

Proposing to Acquire Asia Square Tower 2 for S$2,689 Psf on NLA

 

Read More - CapitaLand Commercial Trust could see DPU boost despite initial dilution

CapitaLand Commercial Trust (CCT) recently proposed to acquire Asia Square Tower 2 which excludes the hotel component (AST2) from BlackRock. The agreed property value of S$2,094m translates into S$2,689 psf on NLA and is expected to contribute an initial NPI yield of 3.6%. This is based on a committed occupancy rate of 88.7%, as at 30 Jun 2017. We see potential upside to this NPI yield as we are confident that management would be able to ramp up the occupancy rate of the property amid a recovering office market.

Funded by Equity, Debt and Divestment Proceeds

This acquisition yield also compares favourably to the exit NPI yield achieved by CCT for One George Street (3.2%) and Wilkie Edge (3.4%). S$340.1m of the divestment proceeds will be used to partially finance this acquisition (total cost of ~S$2,150.5m), with the remainder to be funded by bank borrowings (S$1,120m) and a rights issue (166 units for every 1,000 existing rights units) to raise net proceeds of S$690.4m.

Read more -  The Secret of Successful Share Investment in Singapore Companies

The rights issue price of S$1.363 comes in at a 17.3% and 19.6% discount to the theoretical exrights price of S$1.648 and last closing price of S$1.695 before the announcement, respectively. We note that AST2 will provide CCT with a number of benefits such as the addition of a premium Grade A property with efficient floor plates at a strategic location at the heart of the Marina Bay area, diversification of tenant base and reasonable agreed property value vis-à-vis comparable Grade A office assets. However, there would be an initial dilution to CCT’s DPU due to the rights issue.

Maintain HOLD

On a pro forma basis, CCT’s aggregate leverage would be ~37.1%. Despite the dilution, we see room for management to boost its DPU once it ramps up occupancy at AST2, coupled with the potential to benefit from an uplift in market spot rents in FY18.

Besides factoring in this transaction in our model, we also recalibrate our assumptions (cost of equity: 6.9%; terminal growth: 1.8%) following a change in analyst coverage. Our FY17 and FY18 DPU forecasts are adjusted by -9.1% and -9.2%, respectively.

More Update:Share trading tips, SGX Stock Picks, Share Market signals for Singapore stock Market

Why is small-cap value strategy

"Put just in little capitalization esteem stocks. Try not to put resources into blue chips. Try not to put resources into development stocks."

This exhortation may alert you. In any case, in the event that you need the best long haul returns, you need to put resources into esteem little tops. To manufacture your retirement fund rapidly, you have to resist tradition.

What are little top stocks? They are organizations with little market capitalisation. Market top is the market estimation of all the extraordinary offers. You get this by increasing every single exceptional offer with the offer cost. 

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What is an esteem stock? An esteem stock is one that offers at a marked down cost to its reasonable esteem. For instance, if a stock offers for 50 pennies and its reasonable esteem is $1, at that point that is a half rebate to its reasonable esteem. Esteem speculators attempt to pay 50 pennies to a dollar of benefits. The reasonable estimation of a stock is evaluated by understanding the matter of an organization and breaking down its budgetary explanations.

What's more, why is a stock that is worth $1 offering for 50 pennies? This happens on the grounds that stock costs are as a rule driven by the assessments of market members and are not founded on business basics.

Oblivious ages in 1930s, individuals regarded money markets as a club. Many still do today. Examiners don't think about the basics. At that point Benjamin Graham went along. A great many people don't know graham's identity, however they know his popular understudy: Warren Buffett. Graham presented a precise method for investigating stocks and is known as the father of significant worth contributing. 

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He presented the idea of edge of security. It implies that if one somehow managed to buy a stock at well underneath its evaluated reasonable esteem, there is a cushion called the edge of security that will shield one from misfortune. Graham brought us from the dull periods of stock hypothesis to contributing.

Afterward, in the 1980s, Eugene Fama and Kenneth French, also called Fama and French, tagged along. They had leeway over Graham, as in the 1980s, there was suffi cient budgetary information accessible for investigation utilizing factual apparatuses and PCs. Graham did not have this advantage and needed to depend on concentrate little specimens of stocks utilizing pen and paper. Fama and French based upon Graham's work and took contributing to another level. They put the science into contributing. To put it plainly, Fama and French found that little top esteem stocks outflanked the general securities exchange. For the advantage of perusers, I have abridged a portion of the information from Fama and French in Table 1.

Table 1 demonstrates the execution of two procedures in the worldwide securities exchange. "Little less huge" (SMB) implies the normal execution of little top stocks short that of huge top stocks every year. For instance, from 2012 to 2016, little tops beat huge tops by a normal of 0.26% a year. Similar remains constant for the last 10, 15 and 20 years. 

"Esteem less development" implies the normal execution of significant worth stocks less that of development stocks. In the worldwide securities exchange, esteem stocks have outflanked development stocks by 4.73% a year for the last fi ve years. In the course of the most recent 20 years, from 1997 to 2016, esteem stocks have outflanked development stocks by 3.36% a year.

Shouldn't something be said about the Asia ex-Japan securities exchange? See Table 2. 

Asia demonstrates a comparable outcome. There is a general out performance of little tops and esteem stocks. A basic peruser may bring up that in the last fi ve years, little tops have failed to meet expectations huge tops by 1.64% a year. I think the more drawn out term results should convey heavier weight — little tops outflanked more than 10-to 20-year time frames.

In Asia, the esteem methodology is plainly better than the development system. Esteem beat development in all cases and by an immense quantum as well (4 or more for each penny). One would likewise see that esteem stocks' out performance in Asia is better than that in the worldwide securities exchange.

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Source  - theedgesingapore

Successful share investment secrets

Share investment is always about timings and winnings. When investors decide to make money, then no winds could stop them. Some stock prices are too high to buy and some are too low, which keeps investors in dilemma of buying or not buying those shares. If you too face this problem, its high time to go for a detailed stock research where you must look for successful share investment decisions regarding Singapore stocks to buy now.

So lets unlock the secret of successful share investment by identifying factors which not only boost profit numbers but also helps in tracking Singapore stock market movements.

Pen Down 2 Successful Share Investment Secrets:

1. If you are investing in net to net stocks, you are at a high risk of losing capitals: 

Its important to understand the risk of investing in net-net stocks. These are the stocks of such Singapore companies, which are facing some problems either in management or in product offerings. Basically, their market capitalization is lower when compared to its market capitalization. So ending up your capital in buying such stocks might be a source of self-suicide.

So successful share investment secrets say: 

“Invest in stocks that have high potential to return your capital and further boost your capital with profits. “

If you still have interest in investing in such net-net stocks, you have two options:

• Diversify capital in net-net stocks and mitigate the risk you are about to take
• Do a thorough stock research with the help of Singapore stock market news and other available data before investing in stock market of Singapore.

Example:

Ace Achieve Infocom Ltd ACE:SP  SINGAPORE

• 1 YR RETURN: -52.94%
• YTD RETURN : -38.46%
• CURRENT P/E RATIO (TTM): 4.27
• EARNINGS PER SHARE: 0.009

2. Check the ROE of the Singapore stock market company you are about to invest in:

The ROE is calculated by dividing net profits whit shareholder’s equity. It tells you the profitability of each dollar of your capital invested in any company registered on Singapore stock market.

So successful share investment secrets say: 

“The higher the ROE of any stock is, the more favourable share market tip it becomes thus returning more profits.“

The second approach to measure ROE could be:

Multiplying asset turnover with net profit margin and asset and then dividing it with equity of the stock.

Example:

Top Glove:

• 1 YR RETURN: 02%
• YTD RETURN : 06%
• DIVIDEND INDICATED GROSS YIELD: 2.66%
• ROE: 19.8%.

Singapore Stock Market Researcher Last Note:

For making any decision regarding share investments, the investors must look upon few things like:

• Share market tips shared from experts of Singapore stock market
• Keep handy information about all the Singapore stock to buy now
• Never ignore any share trading tips because it can help you in maximizing your returns
• Keep a keen eye on every stock prices and its movements
• Singapore stock market news can be a warning alarm for every investor

So hope you are now through with these successful share investment secrets and for more such information and related stocks market tips you can ask for a free trial directly from the Singapore’s top-rated share investment signals providers Multi Management future solutions.

Source -The Secret of Successful Share Investment in Singapore Companies

Stock Market Reseach of CapitaLand Commercial Trust

CapitaLand Commercial Trust - A prime Marina Bay office does not come cheap
■ Strategically compelling but still DPU dilutive, on our estimates
■ Even after rental correction, Marina Bay office prices are not cheap
■ We reiterate Sell (5) rating with an ex-rights TP of SGD1.39

What's new:

CCT announced the acquisition of Asia Square Tower 2 (AST2) on 21 September 2017 and held a briefing for analysts. We maintain our Sell (5) rating as we expect it to be mildly DPU dilutive.

Read more - Singapore Stocks CapitaLand Commercial Trust analysis

What's the impact:

CCT will acquire AST2 at an initial net-property income (NPI) yield of 3.6%, with a committed occupancy rate of 88.7% as at 30 June 2017 and finance the total deal cost of SGD2.15bn with SGD1.12bn of bank borrowings, SGD340m of recent divestment proceeds, and SGD690.4m of equity from a 166 for 1,000 rights issue (at an issue price of SGD1.363/unit). The pro-forma gearing, after all transactions, is 37.1%.

We expect the transaction to be mildly DPU-dilutive, but depending on the actual borrowing cost and the rate of cash-rent improvement in AST2, it might become DPU accretive eventually. Given the multi-funding strategy to optimize the DPU impact, AST2’s prominence in the heart of Marina Bay and how it would enhance and diversify CCT’s overall portfolio, we can see why management was willing to buy AST2 at a 3.6% initial yield, although there will be some minor tax leakage in buying it through its existing special purpose vehicle.

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The purchase price of SGD2,689/sq ft is about 8% lower than the average valuation of other equally new Marina Bay office properties, so CCT is not paying the highest price, but this is just relative, in our view, because even though office rents have corrected by about 20% from the recent peak in early 2015, capital values of Marina Bay properties have only appreciated over this period. We also suspect that some of its in-place rents are higher than the spot rents, so we see some short-term risk of negative rental reversions (about 10% of AST2 leases are due for renewal in 2018).

We do not regard the deal as clear winner (on DPU-accretion) like some of the recent Mapletree-related deals (Mapletree Business City and Mapletree Logistics Hub Tsing Yi), but it is not a totally bad 3rd -party deal either, in our opinion. Nonetheless, we hold CCT management to exacting standards.

What we recommend:

We maintain our Sell (5) rating and revise down our DPU forecasts for 2017-19E by 3% after incorporating AST2 into our forecasts along with the funding assumptions. We lower our DDM-derived 12-month target price to SGD1.39 (ex-rights) from SGD1.42. A risk to our call is an exuberant recovery in Singapore office rents.

More Update:Share trading tips, SGX Stock Picks, Share Market signals for Singapore stock Market

Points to watch out before investing in a company shares

Today, we can’t find any single company which has a perfect record when it comes to investing in their stocks. It seems as if it is hard to find a company share which can show a linearly upward trading trend on any of the renowned stockbroking platforms. 

A lesson of how to protect ourselves and our hard earn money before it gets shattered.  

Today here, I on a very serious node going to deliver you some of the major sore points that you must watch out before investing in any stock market.

Emigration of upper management:

Leaving off any member from the upper management is an alarming sign for all the investors. It’s an indication for all stock market traders and therefore needs to determine the actual reason behind their walk out. because It may be a sign that the delegates at the higher authority know of something going to happen within the organization or it may be for some regulatory issues.

Here, in Quidsi’s case, their finance chief left the company in March which could be considered as a crucial sore point while investing for Quidsi Stock.

Excessive Debt:

Debt a key parameter that must be taken into consideration before investing in any online stock. Debt of any organization can be curated from their debt-to-equity ratio. This debt-to-equity ratio may seem varying depending upon the sector you are dealing with.

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For example, Shiping industries always have a high debt-to-equity ratio in comparison with an IT industry.

Inventory an asset or a sore point:

Many online stock traders look inventories as a company’s assets and in most cases they are true. However, in many cases inventory may also cause hindrance against company’s future earning if they are not sold out.

Similar can be taken in account for Quidsi when Amazon has repositioned Quidsi’s inventory form their main pulpit.

Lagging financial results:

Late filing of financial result never grabs our attention because we overlook them as there might be some internal issues. Whereas, a good stock trader always take it as a remarkable sore point and investigate to find for what reason the filing of financial report gone late.

The stock market is volatile and this volatility depends on innumerable factors. Therefore it’s always been suggested to never take such issues as for granted.

Always go with cash flow rather than with net income:

Whenever we are going to decide for a company we focus on their net income. We hardly focus on their cash flow. This cash flow always needed to be considered. if net income is high and their cash flow is crippling the company may have problems in raising their revenue from their customers.

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A recent study shows that the flow of cash gets deteriorated showing a jump of 55.23% from 44.96% which is again a spectacular sore point.

This and a lot more is waiting here for you at Multi Management & Future Solutions