Recent Reports

  • Singapore Exchange Limited: Derivatives thriving from volatile environment

    Tin Min Ying | Phillip Securities Research Pte Ltd | Oct 22, 2018
    • 1Q19 Revenue and PATMI was 5.6% and 6.5% lower than estimated respectively, due to weaker than expected revenues from Post Trade Services and Issuer Services.
    • Securities business missed our estimates by 6.6% as the weaknesses in emerging markets and concerns over economic conditions lead to weaker flows.
    • Derivatives business was the standout performer, achieving strong record revenues with a surge of 17% YoY in volume.
    • Interim dividend per share spiked up 50% to 7.5 cents (1Q18: 5 cents); due to a change in dividend policy announced last quarter.
    • We maintain our BUY recommendation for SGX and raise our Target Price to S$9.01 (previously S$8.93). We have changed our valuation method from DCF to P/E ratio multiple. Our Target Price is driven by 25.2x PER, in line with SGX’s peers.
  • First REIT: Waiting for a sign

    Tara Wong | Phillip Securities Research Pte Ltd | Oct 17, 2018
    • NPI and DPU were in line with our forecast. 5.1% and 5.4% YoY boost in Gross Revenue and NPI, respectively, driven by two acquisitions made in 4Q17.
    • Potential expanded ROFR pipeline and improvement in tenant concentration from proposed transaction announced in September.
    • No marked improvement in outstanding receivables even accounting for the S$17.5mn of rental payments received on Oct 15 that was disclosed by FIRT.
    • Maintain Neutral with lower TP of S$1.30.
  • Singapore REITs Monthly Tracker: October 2018

    Tara Wong | Phillip Securities Research Pte Ltd | Oct 17, 2018
    • FTSE S-REIT Index declined 5.8% YTD. Weakness across all sub-sectors over the past month, with Sabana REIT being the top performer (+3.8% MTD) and OUE Commercial REIT (announced a rights issue on Oct 5) being the worst performer (-11.7% MTD).
    • Sector yield spread of 300bps over the benchmark 10-year SGS (10YSGS) yield remains close to the -1 standard deviation (SD) level as at end-September.
    • The US Fed’s interest rate hike to 2.25% in September and additional anticipated rate hikes will add pressure on yield spread.
    • 3m SOR continued to rise YTD, ending at 1.63% in September.
    • Remain NEUTRAL on S-REITs sector. Sub-sector preferences: Office and Hospitality.
  • Keppel DC REIT: Portfolio remains stable

    Richard Leow | Phillip Securities Research Pte Ltd | Oct 17, 2018
    • 3Q18 revenue was 5.3% higher than expected, due to higher rental top up which is recognised periodically
    • 3Q18 DPU was 4.1% lower than expected, due to Capex Reserves set aside for KDC SGP 3 and KDC SGP 5
    • 9M18 revenue and DPU met 79% and 73% respectively, of consensus FY18 expectation
    • Maintain Accumulate; unchanged target price of $1.45
  • Singapore Coal Monthly: Prepare for higher coal demand in winter

    Chen Guangzhi | Phillip Securities Research Pte Ltd | Oct 11, 2018
    • Slight relaxation of air pollution control for the upcoming winter in China
    • Restriction on coal import remains
    • Lifting 2018 domestic production target in Indonesia
    • Facing a hurdle to ramp up production
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