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OCBC |
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Singapore Strategy Sentiment built up along the way
■ Our recent “Keep calm and trade on” marketing tour found Singapore and Malaysia investors more defensive than their HK counterparts, preferring high-yield stocks. ■ We stick to our theme of dissipating rising interest rates and maintain Overweight on the oversold developer sector (currently trading at c.45% discount to RNAV). ■ Our 12-month FSSTI target remains at 3,300 based on 12x CY20F P/E. Our large cap picks are CAPL, CIT, CDREIT, CD, GENS, OCBC, SCI, SSG and STE.
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Singapore Press Holdings: In-line results
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| UOB KAYHIAN | DBS |
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CapitaLand Commercial Trust (CCT SP) Benefitting From Dearth Of New Grade-A Office Space
Supply of new office space will taper to 1.2m sf in 2019 and 1.0m sf in 2020, after a deluge of 2.7m sf in 2017 and 1.7m sf in 2018. CCT is a prime beneficiary of an upturn in office rent as it is the largest landlord in Singapore’s CBD with grade-A office buildings accounting for 81% of its portfolio NLA. We expect positive rental reversion for AST2 in 1H19 and CapitaGreen in 2H19. Maintain BUY. Target price: S$2.11.
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Singapore Property
Oxley: A much-needed Ang Pao • Oxley accepts a non-binding LOI to purchase its Mercure and Novotel Hotels for S$950m (S$1.23m per key) • The price is at a 5% premium to book value and the estimated gross yield is 4.7% • The sale, if completed, would alleviate some concerns on debt repayment risks, especially its S$450m retail bonds maturing in November 2019 and May 2020 • Other key concerns including i) 3,700 residential units of launch pipeline and unsold inventory, ii) potential receipts of proceeds from overseas projects, iii) potential divestment of Dublin properties.
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Check out our compilation of Target Prices
