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

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

Good time to DBS buy Now

• Recent drop in share price
• Several positive initiatives
• Raised to BUY

Stock Fell From Recent High of S$22.25

In the past two months, DBS’s share price has dropped from a high of S$22.25 to a low of S$20.38 yesterday. This translates to a decline of 8.4%. In terms of market capitalization, this meant that about S$4.8 billion has been wiped off. During the same period, the STI has dropped about 3.7%, while the FTSE ST Financial Index also fell 3.7%.

DBS has fallen more than its listed peers OCBC and UOB, which declined by 4.1% and 5.6%, respectively. The higher-than average decline in its share price performance could be due to market concern over its oil and gas provisions.

As a recap, for its 2Q17 results, DBS saw impairment charges of about S$304m versus S$180m for UOB and S$169m for OCBC. Recent market jitters over North Korea nuclear test also further added to the cautious tone in the market and share prices generally eased across the board.

Positive Recent Developments

While the recent 2Q17 net earnings came in just slight below market expectations, wealth performed well and accounted for 34% of total Fee & Commission Income. With the strong performance of global and regional markets in 3Q17, we expect fee-based income momentum and strong wealth income to continue into 3Q17. The addition of ANZ will also drive its wealth business in 2018, both in terms of assets under management and revenue.

Recently, DBS has also received in-principle approval to convert its existing India franchise to a wholly-owned subsidiary. This will further deepen its presence in this market. While the operating environment for the Oil & Gas sector is still challenging, the outlook for the local property market has improved recently with more transactions and en-bloc sales.

Upgrade to BUY

Although the share price has come off from the high, the stock has still performed well YTD, up 17.5%. Since our previous report in early August, where we recommended re-entry at lower price level, the current price correction has presented an opportunity to accumulate this stock again.

At current price, and with a dividend yield of 3.2% (based on increased dividend payout this year), we are upgrading DBS to a BUY. Our fair value estimate remains at S$22.50.

More Update: Penny Stocks Recommendations, Stock investment, Share investment, Stock picks & stock market news today

CapitaLand’s Ascott group acquires additional 60% stake

The Ascott, an entirely claimed auxiliary of CapitaLand, toward the beginning of today declared that it is securing an extra 60% stake in Quest Apartment Hotels for A$180 million ($191 million).

Ascott’s stake in Quest will increment to 80%, from its current 20%, turning into the greater part shareholder in Quest.

With the procurement, the gathering will turn into the biggest overhauled living arrangement supplier crosswise over Australia, New Zealand, and Fiji.

Simultaneously, Ascott has the alternative to procure the staying 20% stake in Quest, however subject to terms and conditions.

The procurement will likewise help Ascott’s worldwide portfolio by more than 11,000 units to an aggregate of 67,000 units crosswise over 507 properties and 124 urban communities all around.

Lee Chee Koon, Ascott’s Chief Executive Officer, said, “Since Ascott’s procurement of a 20% stake in Quest in 2014, Quest’s system income has seen a sound yearly development of 6%, bringing about solid yearly benefit profit principally from Quest’s repeating expense wage. Ascott will appreciate the repeating establishment charges that Quest procures from its establishment properties and improve the strength of our portfolio pay and profit for value.”

Offers of CapitaLand last exchanged 1 penny higher at $3.51.

Hot Stock Of Singapore SGX Market

• Jadason^
• SingTel
• Genting Sing
• Chasen^

So Earn More with Intraday Trading Signals

Reference: http://www.mmfsolutions.sg/news/singapore-share-market-update-2/