broker's report

CCT downgraded to 'sell' by OCBC after price balloons 22% YTD

SINGAPORE (June 25): OCBC Investment Research is downgrading CapitaLand Commercial Trust (CCT) to “sell” with an unchanged fair value estimate of $1.88, after the stock saw its share price surge 22.3% so far this year.

In a Monday report, OCBC’s research team says the run-up had been supported by a flight to defensive safe names and a dovish bias from the US Federal Reserve.

But now, the Fed is expected to shift its policy stance.

Loan from parent eases concerns of imminent Sembmarine cash call

SINGAPORE (June 25): DBS Group Research says the $2 billion loan from Sembcorp Industries (SCI) to 61%-owned subsidiary Sembcorp Marine (SMM) is likely to ease concerns over an immediate cash call.

“Our sense is that the exercise buys SMM some breathing space as sector recovery takes time and hence, the urgency of a cash call in the near term is reduced,” says analyst Ho Pei Hwa in a Monday report.

Genting Singapore kept at 'add' by CGS-CIMB on new casino openings in Japan

SINGAPORE (June 24): CGS-CIMB Securities continues to rate Genting Singapore (GENS) at “add” with an unchanged target price of $1.06.

With several upcoming urban and regional integrated resort (IR) in Japan, many gaming players are eager to secure these opportunities.

"We think Japan’s IR Basic Policy would be introduced by end-FY19 at earliest," says analyst Cezzane See.

So far, Osaka has called for a request for concept (RFC) in April and Yokohama has issued its request for information (FRI) in 4Q18 and GENS has participated in both.

Frasers Centrepoint Trust kept at 'buy' by DBS on strategic transformation

SINGAPORE (June 24): DBS Group Research is reiterating its “buy” call on Frasers Centrepoint Trust (FCT) with a higher target price of $2.85, from $2.60 previously.

Currently, all of FCT’s properties are suburban malls, which have shown to be resilient across market cycles.

However, DBS is positive on FCT’s acquisition of stakes in PGIM’s AsiaRetail fund and Waterway Point as this should transform the group’s growth profile entirely.

With its DPU expected to grow at a 2.8% CAGR over FY18-21, FCT will now count among the fastest-growing REITs.

UOB upgraded to 'buy' as price rally continues

SINGAPORE (June 21): OCBC Investment Research is upgrading United Overseas Bank (UOB) to “buy” amid a share price rally that has seen shares in UOB surge by some 12% so far this month.

And the bank is poised to extend a price streak that is now heading into its 11th day.

UOB’s shares have rallied for 10 straight days, gaining over 9% from $23.96 on June 6 to close at $26.22 on June 20. As at 1pm on Friday, shares in UOB continues to ride on the momentum, trading 0.3% higher at $26.31.

Virtual banks not a threat to Singapore banks – for now, says CGS-CIMB

SINGAPORE (June 20): The Monetary Authority of Singapore (MAS) is studying the potential for opening the doors to “digital-only banks with non-bank parentage”.

But CGS-CIMB Research dismisses fears that such virtual banks on could put a dent in the market share of incumbents DBS Group Holdings (DBS), Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB) – at least for now.

“We think that virtual banks are not likely to threaten the primary lending businesses of DBS, OCBC and UOB in the near term,” says lead analyst Andrea Choong in a report on Wednesday.

Silverlake Axis on track for solid FY19, says RHB

SINGAPORE (June 20): RHB Research is keeping Silverlake Axis as its top pick in Singapore and in the technology sector, as the digital economy solutions and services provider stays on track to finish the year on a high.

“With improving fundamentals and strong earnings growth as of 9M19, Silverlake Axis is on track to record a robust FY19,” says lead analyst Jarick Seet in a Wednesday report.

“We expect the sturdy growth in earnings and margins to continue into 4Q19, as it continues to execute the major Malaysian core banking contract,” he adds.

Supportive US macroeconomic outlook, robust demand-supply to benefit Manulife US REIT's office properties

SINGAPORE (June 19): Manulife US REIT (MUST) currently has a portfolio of eight trophy and class A office properties located in Los Angeles, New York, Washington DC and Atlanta, with a total net lettable area (NLA) of 4.16 million sf and valued at US$1.86 billion ($2.54 billion).

According to statistics, these four cities rank among the top 10 in the US in terms of GDP growth, population and median household income.

In an unrated report by CGS-CIMB, MUST has caught the attention of analyst Lock Mun Yee after she visited MUST’s properties in Atlanta and New Jersey.

ESR-REIT kept at 'add' pending clarity on equity fund raising to revitalise portfolio, repay debt

SINGAPORE (June 19): CGS-CIMB Research is maintaining its forecasts on ESR-REIT “pending greater clarity” on details of an equity fund raising to raise up to $150 million.

The brokerage is keeping its “add” recommendation on ESR-REIT with an unchanged target price of 60 cents.

The manager of ESR-REIT earlier this week announced the proposed equity fund raising exercise.

AEM poised for system level testing; is likely M&A target: Maybank

SINGAPORE (June 19): Maybank KimEng is maintaining its "buy" call in AEM Holdings with an unchanged target price of $1.40.

Maybank says the roll-out of a 5G mobile network will see the design and production of increasingly complex and mission-critical chips.

To test these new chips efficiently, chipmakers will have to look to system level test (SLT) to complement conventional methods.

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