Singapore 4Q20 Equity Strategy Outlook Questions

[Research Department]

Replying to #36814

Question: Yoma star city stopped construction work since 2018 due to weak demand in Mynamar

Answer: Hi Phillip, from the last update we have from Yoma, the construction for starcity is still ongoing. However instead of the previous target to complete by 2021, it is expected to be delayed by 3-6 months to 2022.

[Research Department]

Replying to #36816

Question #1: IREIT Global – should i subscribe for the rights issue just announceed?

Answer #1: Hi Swee Lim, the effect of the rights issue should already be reflected in the current stock price. if you are an existing shareholder and have yet to exercise your rights, i’d encourage you to take up the rights so that you can average down your cost and not not be impacted by the dilutive effect of the rights issue (Rights are issued at $0.49).

 

Question #2: good morning. what are the views for Ireit global outlook and their right issue? same as FCT and their PO issue. Thanks

Answer #2: Hi Tenjo, for IREIT global currently we have a neutral call on the stock post rights issue. The call is based on the last report in August. The first day of trading after the rights issue is 25th September, hence actually the effect of the rights issue should already be reflected in the stock price. Our TP is 68c, based on current price it has about 13% capital upside and 7+% dividend yield. Hence if you’re looking at buying the counter we do still like it for the high occupancies, minimal expiries and stable dividend yields. If you are an existing shareholder and have yet to exercise your rights, i’d encourage you to take up the rights so that you can average down your cost and not be impacted by the dilutive effect of the rights issue.

[Research Department]

Replying to #36818

Question #1: For Prime US REit- is dividend in S$?

Answer #1: Hi Evelyn, the dividend for Prime US REIT will be in USD.

 

Question #2: How to buy Prime US REIT?

Asnwer #2: Hi Gwen, you may approach your trading representative to find out more about trading counters on POEMs.

[Research Department]

Replying to #36820

Question #1; Those US reit the buy call for now? Or after US election? Thanks

Answer #1: Hi Alice, we have a buy call on both Manulife US REIT and Prime US REIT currently. We like both counters for the resilience in their portfolio metrics and attractive dividend yields.

 

Question #2: Between Prime US Reit and Manulife US Reit, which is better or how to allocate between the 2?

Answer #2: Hi Chye Huat, we have a buy call on both Manulife US REIT and Prime US REIT currently. In terms of expected dividend yields, both counters are offering similar yields for FY20. Portfolio wise, MUST’s asset mix is better than Prime with more trophy assets; trading volume for MUST is also higher due to its inclusion in the EPRA NAREIT Index. Hence, in terms of total return expected based on on our target prices, MUST offers a greater upside at current prices as compared to that of Prime. Amidst Covid-19, both counters achieved high rent collection rates of 99% for Prime and 93% for MUST. We still like both counters for the resilience in their portfolio metrics and attractive dividend yields.

 

b: For Manulife , Prime Reit do we get the full dividend?

Answer #3: Hi Evelyn, for both US REITs, the dividends will not be subject to 30% U.S. withholding taxes provided that the unitholders comply and furnish the required documents (IRS Form W-8/ IRS Form W-9 and US Tax Compliance Certificate). Both documents are securityspecific, and they will need to be received by the manager. (e.g. If a unitholder invests in Prime, he/she will need to submit to the documents to Prime. If the same unitholder invests in Manulife as well, he/she will need to complete the forms again to submit to Manulife.) 

[Research Department]

Replying to #36821

Question #1; Those US reit the buy call for now? Or after US election? Thanks

Answer #1: Hi Alice, we have a buy call on both Manulife US REIT and Prime US REIT currently. We like both counters for the resilience in their portfolio metrics and attractive dividend yields.  

 

Question #2: Between Prime US Reit and Manulife US Reit, which is better or how to allocate between the 2?

Answer #2: Hi Chye Huat, we have a buy call on both Manulife US REIT and Prime US REIT currently. In terms of expected dividend yields, both counters are offering similar yields for FY20. Portfolio wise, MUST’s asset mix is better than Prime with more trophy assets; trading volume for MUST is also higher due to its inclusion in the EPRA NAREIT Index. Hence, in terms of total return expected based on on our target prices, MUST offers a greater upside at current prices as compared to that of Prime. Amidst Covid-19, both counters achieved high rent collection rates of 99% for Prime and 93% for MUST. We still like both counters for the resilience in their portfolio metrics and attractive dividend yields.  

 

Question #3: For Manulife , Prime Reit do we get the full dividend?

Answer #3: Hi Evelyn, for both US REITs, the dividends will not be subject to 30% U.S. withholding taxes provided that the unitholders comply and furnish the required documents (IRS Form W-8/ IRS Form W-9 and US Tax Compliance Certificate). Both documents are securityspecific, and they will need to be received by the manager. (e.g. If a unitholder invests in Prime, he/she will need to submit to the documents to Prime. If the same unitholder invests in Manulife as well, he/she will need to complete the forms again to submit to Manulife.) 

[Research Department]

Replying to #36823

Question: if pandemic persist , which sector is good place to park cash ?

Answer: The Singapore stock most resilient to a pandemic will be Netlink Trust and Sheng Siong. Netlink revenue will be least affected by shutdown and Sheng Siong bascially benefits from lockdown assuming no major disruption to the supply chain.

[Research Department]

Replying to #36828

Question: Why is the stock index (e.g STI) keep dropping when only so far U.S and Japan index are going up? What constitute to this trend for the last few years? Money printing?

Answer: A major reason for difference is performance is due to the tech stocks.  E.g. Looking at the Dow Jones Index, banks such as JP Morgan and Goldman Sachs are down 28% and 13% respectively this year. But tech stocks such as Microsoft and Salesforce are up 32% and 51% respectively

[Research Department]

Replying to #36830

Question: is Netlink Trust a better buy than Singtel/Starhub shares because of 5G rollout?

Answer: Unable to provide a definitive answer. Because it depends on whether Singtel and Starhub can raise their selling prices when 5G is rolled out. If they cannot, then 5G will just add cost and little in revenue. On paper for now, Netlink looks to be the incremental benefiiciary of 5G from an increase in fibre connection points eg lamp post, bus stops, etc.

[Research Department]

Replying to #36834

Question: Hi Paul, with NSA 5G, NCS new CEO (Ng Kuo Pin) and Singtel new CEO (Mr Moon). Will Singtel bottom-out from its 12 years low once the bounder reopen? Any other sign to watch-out?
Can you elaborate your commented in BT on “”an injection of bolder innovations within the organisation”. Is Mr. Moon the right CEO to inject this innovation?

Answer: When 4G was rolled out, despite having all the customers, Singtel and most telcos did not rolled out any compelling applications to take advantage of smartphone capabilities and only provided 4G or mobile connection. Eg Telco were not bold in rolling out a Whatsapp, Lazada, Paynow type applications that is so ubiquitous in our daily lives.

[Research Department]

Replying to #36836

Question; The chart plot Retail Ex-MV. What is MV?

Answer: Retail sales excluding MV refers to sales excluding the volative motor vehicle sales.

[Author]

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