Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

2 September 2020 was the last day for investors in <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> ("SMM") to exercise and pay for their rights to purchase 5 new shares for every 1 held at S$0.20/share in what is The Grand Affair of the...
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/156/636/original/Screenshot%202020-09-02%20at%207.09.36%20PM.png?1599045003" class="editor-image img-responsive" data-smartkarma-image-id="156636"></figure>

<div class="content-highlight">
First, sembcorp marine does a 5:1 rights offering. Parent company <a href="https://www.smartkarma.com/entities/sembcorp-industries-ltd" target="_blank" data-smartkarma-citation="entities:1087:1" rel="noopener">Sembcorp Industries (SCI SP)</a> takes up all its rights, backstops more of them, then Temasek backstops the rest of the Rights Offering. Once complete, one-time parent SCI distributes ALL of its sembcorp marine shares resulting from the Rights Offering to its own shareholders. This amounts to ~4.279 to ~4.911 sembcorp marine shares per SCI share - variable because one does not know how much of the backstop will be used.
Because of the nature of this transaction, I have argued this is something akin to a re-IPO of sembcorp marine. 
</div>
Next stop, information about the disposition of the "excess" rights application, if any, and on 9 September SCI will trade without rights to receive shares in sembcorp marine. The price of SCI shares will be revised sharply downward on the morning of the 9th to account for the value of the SMM shares, which then trade separately starting the <a href="https://links.sgx.com/FileOpen/OIS.ashx?App=Announcement&amp;FileID=627790" target="_blank" rel="noopener">11th of September</a> (p16), theoretically.
While SCI is trading better now than before, I remain somewhat surprised at how the shares have been trading given what appear to be people's opinions and the framework of ownership.
The questions investors looking at this situation should have been asking are...
<ol>
<li>What is the FUTURE SEMBCORP worth?</li>
<li>Where do you want to own FUTURE sembcorp marine?</li>
<li>Where do you think your FELLOW owners of SMM will be willing to sell it?</li>
<li>If you will receive FUTURE sembcorp marine, where would you be happy selling it?</li>
</ol>
My consistent recommendation has been to own sembcorp industries and to NOT OWN sembcorp marine. If you really like SMM, you will get a lot of it by owning SCI. And if you really, REALLY like SMM at S$0.20/share, more than a few times during the rights trading period at more than a few times you could have bought 2.5-6.0% of the future float of SMM by lifting the offer on the rights at the minimum tradable price (someone did once, then regretted it I think).
I expect the complication may be an obstruction for some. I don't think it should be.
Much more below the fold.

2 September 2020 was the last day for investors in Sembcorp Marine (SMM SP) ("SMM") to exercise and pay for their rights to purchase 5 new shares for every 1 held at S$0.20/share in what is The Grand Affair of the...



First, sembcorp marine does a 5:1 rights offering. Parent company Sembcorp Industries (SCI SP) takes up all its rights, backstops more of them, then Temasek backstops the rest of the Rights Offering. Once complete, one-time parent SCI distributes ALL of its sembcorp marine shares resulting from the Rights Offering to its own shareholders. This amounts to ~4.279 to ~4.911 sembcorp marine shares per SCI share - variable because one does not know how much of the backstop will be used.
Because of the nature of this transaction, I have argued this is something akin to a re-IPO of sembcorp marine. 

Next stop, information about the disposition of the "excess" rights application, if any, and on 9 September SCI will trade without rights to receive shares in sembcorp marine. The price of SCI shares will be revised sharply downward on the morning of the 9th to account for the value of the SMM shares, which then trade separately starting the 11th of September (p16), theoretically.
While SCI is trading better now than before, I remain somewhat surprised at how the shares have been trading given what appear to be people's opinions and the framework of ownership.
The questions investors looking at this situation should have been asking are...

What is the FUTURE SEMBCORP worth?
Where do you want to own FUTURE sembcorp marine?
Where do you think your FELLOW owners of SMM will be willing to sell it?
If you will receive FUTURE sembcorp marine, where would you be happy selling it?

My consistent recommendation has been to own sembcorp industries and to NOT OWN sembcorp marine. If you really like SMM, you will get a lot of it by owning SCI. And if you really, REALLY like SMM at S$0.20/share, more than a few times during the rights trading period at more than a few times you could have bought 2.5-6.0% of the future float of SMM by lifting the offer on the rights at the minimum tradable price (someone did once, then regretted it I think).
I expect the complication may be an obstruction for some. I don't think it should be.
Much more below the fold.

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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<ul>
<li>
In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019. 
	 </li>
	<li>
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.   
	 </li>
	<li>The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.</li>
</ul>
  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click <a href="https://www.sgx.com/research-education/market-updates/20200804-buyback-consideration-modern-low-earnings-take-centre">here</a> for more) and up from S$12.6 million in June (click <a href="https://www.sgx.com/research-education/market-updates/20200701-more-80-singapore-stocks-conducted-buybacks-1h20">here</a> for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August. 
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%. 
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-09/Capture.PNG' alt='Buyback Consideration' />
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 <div class='content-caption'>Buyback Consideration</div>
<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-09/Capture%201.PNG' alt='Buyback Consideration' />
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Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year. As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco. The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stocks
			</td>
			<td>
			Number of Shares/units Authorised for Purchase in Current Mandate
			</td>
			<td>
			Total Number of Shares/units Purchased in August 2020
			</td>
			<td>
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			</td>
			<td>
			Average Price Paid S$
			</td>
			<td>
			Cumulative Number of Shares/units purchased in Mandate to date
			</td>
		</tr>
<tr>
<td>
			SINGAPORE TECHNOLOGIES ENGINEERING
			</td>
			<td>
			62,429,441
			</td>
			<td>
			2,000,000
			</td>
			<td>
			$6,834,114
			</td>
			<td>
			$3.417
			</td>
			<td>
			5,000,000
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORPORATION
			</td>
			<td>
			36,410,340
			</td>
			<td>
			1,120,600
			</td>
			<td>
			$5,198,660
			</td>
			<td>
			$4.639
			</td>
			<td>
			1,120,600
			</td>
		</tr>
<tr>
<td>
			GLOBAL INVESTMENTS
			</td>
			<td>
			161,476,125
			</td>
			<td>
			6,800,000
			</td>
			<td>
			$933,582
			</td>
			<td>
			$0.137
			</td>
			<td>
			11,000,800
			</td>
		</tr>
<tr>
<td>
			AEM HOLDINGS
			</td>
			<td>
			27,331,270
			</td>
			<td>
			145,000
			</td>
			<td>
			$592,621
			</td>
			<td>
			$4.087
			</td>
			<td>
			145,000
			</td>
		</tr>
<tr>
<td>
			FIRST RESOURCES
			</td>
			<td>
			158,268,446
			</td>
			<td>
			418,400
			</td>
			<td>
			$545,419
			</td>
			<td>
			$1.304
			</td>
			<td>
			418,400
			</td>
		</tr>
<tr>
<td>
			STRACO CORPORATION
			</td>
			<td>
			86,213,958
			</td>
			<td>
			550,000
			</td>
			<td>
			$273,354
			</td>
			<td>
			$0.497
			</td>
			<td>
			550,000
			</td>
		</tr>
<tr>
<td>
			SINGAPORE O&amp;G
			</td>
			<td>
			47,680,300
			</td>
			<td>
			803,724
			</td>
			<td>
			$196,268
			</td>
			<td>
			$0.244
			</td>
			<td>
			1,999,990
			</td>
		</tr>
<tr>
<td>
			GKE CORPORATION
			</td>
			<td>
			78,853,189
			</td>
			<td>
			1,500,000
			</td>
			<td>
			$118,742
			</td>
			<td>
			$0.079
			</td>
			<td>
			10,857,800
			</td>
		</tr>
<tr>
<td>
			AVARGA
			</td>
			<td>
			94,710,834
			</td>
			<td>
			539,800
			</td>
			<td>
			$81,101
			</td>
			<td>
			$0.150
			</td>
			<td>
			539,800
			</td>
		</tr>
<tr>
<td>
			CHINA SUNSINE CHEMICAL HOLDINGS
			</td>
			<td>
			97,226,160
			</td>
			<td>
			210,000
			</td>
			<td>
			$74,532
			</td>
			<td>
			$0.355
			</td>
			<td>
			210,000
			</td>
		</tr>
<tr>
<td>
			YHI INTERNATIONAL
			</td>
			<td>
			29,229,581
			</td>
			<td>
			200,000
			</td>
			<td>
			$65,077
			</td>
			<td>
			$0.325
			</td>
			<td>
			200,000
			</td>
		</tr>
<tr>
<td>
			HRNETGROUP
			</td>
			<td>
			100,652,263
			</td>
			<td>
			128,700
			</td>
			<td>
			$63,618
			</td>
			<td>
			$0.494
			</td>
			<td>
			128,700
			</td>
		</tr>
<tr>
<td>
			EUROSPORTS GLOBAL
			</td>
			<td>
			26,220,160
			</td>
			<td>
			300,000
			</td>
			<td>
			$49,787
			</td>
			<td>
			$0.166
			</td>
			<td>
			1,333,900
			</td>
		</tr>
<tr>
<td>
			JAPAN FOODS HOLDING
			</td>
			<td>
			17,360,290
			</td>
			<td>
			100,000
			</td>
			<td>
			$29,671
			</td>
			<td>
			$0.297
			</td>
			<td>
			235,700
			</td>
		</tr>
<tr>
<td>
			MDR
			</td>
			<td>
			89,039,757
			</td>
			<td>
			300,900
			</td>
			<td>
			$26,361
			</td>
			<td>
			$0.088
			</td>
			<td>
			300,900
			</td>
		</tr>
<tr>
<td>
			BAN LEONG TECHNOLOGIES
			</td>
			<td>
			11,392,300
			</td>
			<td>
			62,500
			</td>
			<td>
			$15,929
			</td>
			<td>
			$0.255
			</td>
			<td>
			62,500
			</td>
		</tr>
<tr>
<td>
			CHOO CHIANG HOLDINGS
			</td>
			<td>
			20,800,000
			</td>
			<td>
			46,800
			</td>
			<td>
			$9,862
			</td>
			<td>
			$0.211
			</td>
			<td>
			55,800
			</td>
		</tr>
<tr>
<td>
			INTRACO
			</td>
			<td>
			10,292,587
			</td>
			<td>
			5,000
			</td>
			<td>
			$1,253
			</td>
			<td>
			$0.251
			</td>
			<td>
			5,000
			</td>
		</tr>
<tr>
<td>
			Total
			</td>
			<td>
			 
			</td>
			<td>
			15,231,424
			</td>
			<td>
			$15,109,950
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments. 
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click <a href="http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/company_announcements">here</a>). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.
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In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019.  
	 
	
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.    
	 
	The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.

  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click here for more) and up from S$12.6 million in June (click here for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August.  
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%.  
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.



      
    
    Buyback Consideration

      
    
    Buyback Consideration


Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year.  As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco.  The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.




			Stocks
			
			
			Number of Shares/units Authorised for Purchase in Current Mandate
			
			
			Total Number of Shares/units Purchased in August 2020
			
			
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			
			
			Average Price Paid S$
			
			
			Cumulative Number of Shares/units purchased in Mandate to date
			
		


			SINGAPORE TECHNOLOGIES ENGINEERING
			
			
			62,429,441
			
			
			2,000,000
			
			
			$6,834,114
			
			
			$3.417
			
			
			5,000,000
			
		


			KEPPEL CORPORATION
			
			
			36,410,340
			
			
			1,120,600
			
			
			$5,198,660
			
			
			$4.639
			
			
			1,120,600
			
		


			GLOBAL INVESTMENTS
			
			
			161,476,125
			
			
			6,800,000
			
			
			$933,582
			
			
			$0.137
			
			
			11,000,800
			
		


			AEM HOLDINGS
			
			
			27,331,270
			
			
			145,000
			
			
			$592,621
			
			
			$4.087
			
			
			145,000
			
		


			FIRST RESOURCES
			
			
			158,268,446
			
			
			418,400
			
			
			$545,419
			
			
			$1.304
			
			
			418,400
			
		


			STRACO CORPORATION
			
			
			86,213,958
			
			
			550,000
			
			
			$273,354
			
			
			$0.497
			
			
			550,000
			
		


			SINGAPORE O&amp;G
			
			
			47,680,300
			
			
			803,724
			
			
			$196,268
			
			
			$0.244
			
			
			1,999,990
			
		


			GKE CORPORATION
			
			
			78,853,189
			
			
			1,500,000
			
			
			$118,742
			
			
			$0.079
			
			
			10,857,800
			
		


			AVARGA
			
			
			94,710,834
			
			
			539,800
			
			
			$81,101
			
			
			$0.150
			
			
			539,800
			
		


			CHINA SUNSINE CHEMICAL HOLDINGS
			
			
			97,226,160
			
			
			210,000
			
			
			$74,532
			
			
			$0.355
			
			
			210,000
			
		


			YHI INTERNATIONAL
			
			
			29,229,581
			
			
			200,000
			
			
			$65,077
			
			
			$0.325
			
			
			200,000
			
		


			HRNETGROUP
			
			
			100,652,263
			
			
			128,700
			
			
			$63,618
			
			
			$0.494
			
			
			128,700
			
		


			EUROSPORTS GLOBAL
			
			
			26,220,160
			
			
			300,000
			
			
			$49,787
			
			
			$0.166
			
			
			1,333,900
			
		


			JAPAN FOODS HOLDING
			
			
			17,360,290
			
			
			100,000
			
			
			$29,671
			
			
			$0.297
			
			
			235,700
			
		


			MDR
			
			
			89,039,757
			
			
			300,900
			
			
			$26,361
			
			
			$0.088
			
			
			300,900
			
		


			BAN LEONG TECHNOLOGIES
			
			
			11,392,300
			
			
			62,500
			
			
			$15,929
			
			
			$0.255
			
			
			62,500
			
		


			CHOO CHIANG HOLDINGS
			
			
			20,800,000
			
			
			46,800
			
			
			$9,862
			
			
			$0.211
			
			
			55,800
			
		


			INTRACO
			
			
			10,292,587
			
			
			5,000
			
			
			$1,253
			
			
			$0.251
			
			
			5,000
			
		


			Total
			
			
			 
			
			
			15,231,424
			
			
			$15,109,950
			
			
			 
			
			
			 
			
		

Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments.  
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click here). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.



11 Companies Commence New Share Buyback Mandates in August

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<ul>
<li>
For the past 12 weeks, the 10 S-REITs recipient to the Sector’s highest net institutional inflows (proportionate to market capitalisation) included seven of the S-REIT Sector’s best performers over the period, including Keppel DC REIT which has been amongst the 25 strongest performing global REITs in the 2020 YTD. 
	 </li>
	<li>
These 10 S-REITs averaged a 6% total return from 9 June through to 28 August, whilst the remaining S-REITs averaged a 9% decline. The iEdge S-REIT Leaders Index generated a 3% decline over the 12 weeks, in-line with the global REIT market.  
	 </li>
	<li>
Sabana REIT saw the S-REITs’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 Aug, the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.
</li>
</ul>
 

Globally there are more than 800 stocks that make up the REIT Sector, with a combined market capitalisation of US$1.8 trillion (S$2.4 trillion). The FTSE EPRA/NAREIT Global REIT Index represents approximately two-thirds of the S$1.8 trillion combined market capitalisation and has generated a declined a 17% decline in the 2020 year to 28 August. Like most equity benchmarks, the Index formed its post-23 March high on 9 June which coincided with the beginnings of the second wave of COVID-19 across the United States. Similarly, the iEdge S-REIT Leaders Index formed its post-23 March high on 9 June, and has since declined 3%. Over the 12 week period the S-REIT sector was recipient to S$147 million in net institutional outflows. A total of 13 trusts of the S-REIT Sector saw net institutional inflows over the 12 weeks. The 10 trusts with the highest net institutional inflows between 10 June to 28 June, proportionate to current market capitalisation included seven of the best performing REITs over the period. Together the 10 trusts generated an average gain of 6% over the 12 weeks, whilst the remaining REITs averaged a 9% decline. 
Sabana REIT saw the S-REIT Sectors’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 August (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/OZZOXHVNDL7FV4HU/94f78e53d56f79823f6693002a11cab7be59d2c671523099a4385830a84e4205">here</a>), the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor. 
The table below sorts the S-REIT Sector to the highest net institutional inflows between proportionate to current market capitalisation between 10 June and 28 August 2020.

<table class="table table-striped"><tbody>
<tr>
<td>S-REIT Sector: REITS, Stapled Trusts and Business Trusts </td>
			<td>SGX Code</td>
			<td>Market Cap S$M</td>
			<td>Net Institutional Flow 10 June - 28 Aug / Mkt Cap</td>
			<td>Total Return 9 June - 28 August </td>
			<td>Total Return YTD</td>
		</tr>
<tr>
<td>Sabana REIT</td>
			<td>M1GU</td>
			<td>389.6</td>
			<td>1.00%</td>
			<td>-1%</td>
			<td>-17%</td>
		</tr>
<tr>
<td>Frasers L&amp;C Tr</td>
			<td>BUOU</td>
			<td>4607.8</td>
			<td>0.60%</td>
			<td>14%</td>
			<td>13%</td>
		</tr>
<tr>
<td>A-REIT</td>
			<td>A17U</td>
			<td>11983</td>
			<td>0.50%</td>
			<td>3%</td>
			<td>15%</td>
		</tr>
<tr>
<td>Mapletree Log Tr</td>
			<td>M44U</td>
			<td>7850.6</td>
			<td>0.40%</td>
			<td>8%</td>
			<td>22%</td>
		</tr>
<tr>
<td>SPH REIT</td>
			<td>SK6U</td>
			<td>2362.5</td>
			<td>0.40%</td>
			<td>-4%</td>
			<td>-19%</td>
		</tr>
<tr>
<td>Keppel Pac Oak REIT</td>
			<td>CMOU</td>
			<td>920.7</td>
			<td>0.40%</td>
			<td>4%</td>
			<td>-1%</td>
		</tr>
<tr>
<td>ARA LOGOS Log Tr</td>
			<td>K2LU</td>
			<td>691.6</td>
			<td>0.30%</td>
			<td>14%</td>
			<td>-6%</td>
		</tr>
<tr>
<td>Keppel DC REIT</td>
			<td>AJBU</td>
			<td>4719.4</td>
			<td>0.20%</td>
			<td>22%</td>
			<td>42%</td>
		</tr>
<tr>
<td>CapitaCom Trust</td>
			<td>C61U</td>
			<td>6333.5</td>
			<td>0.10%</td>
			<td>-10%</td>
			<td>-14%</td>
		</tr>
<tr>
<td>ParkwayLife REIT</td>
			<td>C2PU</td>
			<td>2268.8</td>
			<td>0.10%</td>
			<td>8%</td>
			<td>16%</td>
		</tr>
<tr>
<td>CDL H Trust</td>
			<td>J85</td>
			<td>1281</td>
			<td>0.10%</td>
			<td>-11%</td>
			<td>-32%</td>
		</tr>
<tr>
<td>Mapletree Ind Tr</td>
			<td>ME8U</td>
			<td>7138.6</td>
			<td>0.00%</td>
			<td>9%</td>
			<td>21%</td>
		</tr>
<tr>
<td>Ascott Trust</td>
			<td>HMN</td>
			<td>2747.3</td>
			<td>0.00%</td>
			<td>-19%</td>
			<td>-30%</td>
		</tr>
<tr>
<td>Far East H Trust</td>
			<td>Q5T</td>
			<td>1057.5</td>
			<td>0.00%</td>
			<td>-1%</td>
			<td>-24%</td>
		</tr>
<tr>
<td>Frasers H Trust</td>
			<td>ACV</td>
			<td>835.7</td>
			<td>0.00%</td>
			<td>-18%</td>
			<td>-38%</td>
		</tr>
<tr>
<td>Dasin Retail Tr**</td>
			<td>CEDU</td>
			<td>616.7</td>
			<td>0.00%</td>
			<td>-2%</td>
			<td>1%</td>
		</tr>
<tr>
<td>BHG Retail REIT</td>
			<td>BMGU</td>
			<td>295.5</td>
			<td>0.00%</td>
			<td>-9%</td>
			<td>-13%</td>
		</tr>
<tr>
<td>Mapletree NAC Tr</td>
			<td>RW0U</td>
			<td>3064.8</td>
			<td>-0.10%</td>
			<td>-4%</td>
			<td>-16%</td>
		</tr>
<tr>
<td>IREIT Global</td>
			<td>UD1U</td>
			<td>446.1</td>
			<td>-0.10%</td>
			<td>-3%</td>
			<td>-8%</td>
		</tr>
<tr>
<td>OUE Com REIT</td>
			<td>TS0U</td>
			<td>2030.5</td>
			<td>-0.20%</td>
			<td>-7%</td>
			<td>-30%</td>
		</tr>
<tr>
<td>EC World REIT</td>
			<td>BWCU</td>
			<td>550.7</td>
			<td>-0.20%</td>
			<td>-3%</td>
			<td>-4%</td>
		</tr>
<tr>
<td>Elite Com REIT GBP</td>
			<td>MXNU</td>
			<td>399</td>
			<td>-0.20%</td>
			<td>-1%</td>
			<td>N/A</td>
		</tr>
<tr>
<td>Mapletree Com Tr</td>
			<td>N2IU</td>
			<td>6395.9</td>
			<td>-0.30%</td>
			<td>-10%</td>
			<td>-18%</td>
		</tr>
<tr>
<td>Frasers Cpt Tr</td>
			<td>J69U</td>
			<td>2769.3</td>
			<td>-0.30%</td>
			<td>-5%</td>
			<td>-11%</td>
		</tr>
<tr>
<td>Soilbuild Biz REIT</td>
			<td>SV3U</td>
			<td>519.9</td>
			<td>-0.40%</td>
			<td>-1%</td>
			<td>-16%</td>
		</tr>
<tr>
<td>Keppel REIT</td>
			<td>K71U</td>
			<td>3568.9</td>
			<td>-0.50%</td>
			<td>-11%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Cromwell REIT EUR</td>
			<td>CNNU</td>
			<td>1819.5</td>
			<td>-0.50%</td>
			<td>3%</td>
			<td>-6%</td>
		</tr>
<tr>
<td>ESR-REIT</td>
			<td>J91U</td>
			<td>1361.5</td>
			<td>-0.50%</td>
			<td>-8%</td>
			<td>-24%</td>
		</tr>
<tr>
<td>Lendlease REIT</td>
			<td>JYEU</td>
			<td>749.9</td>
			<td>-0.50%</td>
			<td>-8%</td>
			<td>-28%</td>
		</tr>
<tr>
<td>Prime US REIT USD</td>
			<td>OXMU</td>
			<td>1119.3</td>
			<td>-0.60%</td>
			<td>-5%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Sasseur REIT</td>
			<td>CRPU</td>
			<td>919.1</td>
			<td>-0.60%</td>
			<td>-1%</td>
			<td>-8%</td>
		</tr>
<tr>
<td>Utd Hampshire REIT USD</td>
			<td>ODBU</td>
			<td>365.3</td>
			<td>-0.70%</td>
			<td>-8%</td>
			<td>N/A</td>
		</tr>
<tr>
<td>Lippo Malls Tr</td>
			<td>D5IU</td>
			<td>345.4</td>
			<td>-0.70%</td>
			<td>-22%</td>
			<td>-45%</td>
		</tr>
<tr>
<td>ARA H Trust USD</td>
			<td>XZL</td>
			<td>273.7</td>
			<td>-0.70%</td>
			<td>-24%</td>
			<td>-57%</td>
		</tr>
<tr>
<td>CapitaMall Trust</td>
			<td>C38U</td>
			<td>7011.3</td>
			<td>-0.80%</td>
			<td>-14%</td>
			<td>-21%</td>
		</tr>
<tr>
<td>First REIT</td>
			<td>AW9U</td>
			<td>430.4</td>
			<td>-0.80%</td>
			<td>-23%</td>
			<td>-43%</td>
		</tr>
<tr>
<td>Ascendas-iTrust**</td>
			<td>CY6U</td>
			<td>1514.7</td>
			<td>-0.90%</td>
			<td>-10%</td>
			<td>-12%</td>
		</tr>
<tr>
<td>Manulife REIT USD</td>
			<td>BTOU</td>
			<td>1588.6</td>
			<td>-1.00%</td>
			<td>-9%</td>
			<td>-21%</td>
		</tr>
<tr>
<td>Suntec REIT</td>
			<td>T82U</td>
			<td>3920.9</td>
			<td>-1.30%</td>
			<td>-11%</td>
			<td>-22%</td>
		</tr>
<tr>
<td>Starhill Global REIT</td>
			<td>P40U</td>
			<td>954.8</td>
			<td>-1.30%</td>
			<td>-24%</td>
			<td>-38%</td>
		</tr>
<tr>
<td>AIMS APAC REIT</td>
			<td>O5RU</td>
			<td>833.9</td>
			<td>-1.70%</td>
			<td>-4%</td>
			<td>-13%</td>
		</tr>
<tr>
<td>CapitaR China Tr</td>
			<td>AU8U</td>
			<td>1406.3</td>
			<td>-3.00%</td>
			<td>-14%</td>
			<td>-25%</td>
		</tr>
<tr>
<td>Average</td>
			<td> </td>
			<td> </td>
			<td> </td>
			<td>-5%</td>
			<td>-14%</td>
		</tr>
</tbody></table>
 ** note Business Trust. Source: SGX, Bloomberg, Refinitiv (Data as of 28 August 2020). Note table sort by highest net institutional buys to highest net institutional sells proportionate to current market capitalisation.

 

By comparison, the 10 trusts of the S-REIT sector that saw the highest net institutional inflow proportionate to market capitalisation following the major market lows of 23 March through to the post-low high of 9 June included First REIT, Ascendas REIT, Frasers Logistics &amp; Commercial Trust, Mapletree Logistics Trust, Soilbuild Business Space REIT, Keppel REIT, EC World REIT, Keppel Pacific Oak REIT, Ascott Trust and SPH REIT. During that period, the 10 trusts averaged a 54% Total Return compared to the remaining trusts of the S-REIT Sector gaining 45%.
</body></html>





For the past 12 weeks, the 10 S-REITs recipient to the Sector’s highest net institutional inflows (proportionate to market capitalisation) included seven of the S-REIT Sector’s best performers over the period, including Keppel DC REIT which has been amongst the 25 strongest performing global REITs in the 2020 YTD.  
	 
	
These 10 S-REITs averaged a 6% total return from 9 June through to 28 August, whilst the remaining S-REITs averaged a 9% decline. The iEdge S-REIT Leaders Index generated a 3% decline over the 12 weeks, in-line with the global REIT market.   
	 
	
Sabana REIT saw the S-REITs’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 Aug, the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.


 

Globally there are more than 800 stocks that make up the REIT Sector, with a combined market capitalisation of US$1.8 trillion (S$2.4 trillion). The FTSE EPRA/NAREIT Global REIT Index represents approximately two-thirds of the S$1.8 trillion combined market capitalisation and has generated a declined a 17% decline in the 2020 year to 28 August. Like most equity benchmarks, the Index formed its post-23 March high on 9 June which coincided with the beginnings of the second wave of COVID-19 across the United States.  Similarly, the iEdge S-REIT Leaders Index formed its post-23 March high on 9 June, and has since declined 3%. Over the 12 week period the S-REIT sector was recipient to S$147 million in net institutional outflows. A total of 13 trusts of the S-REIT Sector saw net institutional inflows over the 12 weeks. The 10 trusts with the highest net institutional inflows between 10 June to 28 June, proportionate to current market capitalisation included seven of the best performing REITs over the period. Together the 10 trusts generated an average gain of 6% over the 12 weeks, whilst the remaining REITs averaged a 9% decline.  
Sabana REIT saw the S-REIT Sectors’ highest proportionate net institutional inflows since 9 June. As the Manger reiterated on 28 August (click here), the proposed ESR REIT merger offers opportunities for re-rating and for reducing the NAV discount in the long term as part of a larger, more liquid and scalable REIT, backed by a developer-sponsor.  
The table below sorts the S-REIT Sector to the highest net institutional inflows between proportionate to current market capitalisation between 10 June and 28 August 2020.



S-REIT Sector: REITS, Stapled Trusts and Business Trusts 
			SGX Code
			Market Cap S$M
			Net Institutional Flow 10 June - 28 Aug / Mkt Cap
			Total Return 9 June - 28 August 
			Total Return YTD
		

Sabana REIT
			M1GU
			389.6
			1.00%
			-1%
			-17%
		

Frasers L&amp;C Tr
			BUOU
			4607.8
			0.60%
			14%
			13%
		

A-REIT
			A17U
			11983
			0.50%
			3%
			15%
		

Mapletree Log Tr
			M44U
			7850.6
			0.40%
			8%
			22%
		

SPH REIT
			SK6U
			2362.5
			0.40%
			-4%
			-19%
		

Keppel Pac Oak REIT
			CMOU
			920.7
			0.40%
			4%
			-1%
		

ARA LOGOS Log Tr
			K2LU
			691.6
			0.30%
			14%
			-6%
		

Keppel DC REIT
			AJBU
			4719.4
			0.20%
			22%
			42%
		

CapitaCom Trust
			C61U
			6333.5
			0.10%
			-10%
			-14%
		

ParkwayLife REIT
			C2PU
			2268.8
			0.10%
			8%
			16%
		

CDL H Trust
			J85
			1281
			0.10%
			-11%
			-32%
		

Mapletree Ind Tr
			ME8U
			7138.6
			0.00%
			9%
			21%
		

Ascott Trust
			HMN
			2747.3
			0.00%
			-19%
			-30%
		

Far East H Trust
			Q5T
			1057.5
			0.00%
			-1%
			-24%
		

Frasers H Trust
			ACV
			835.7
			0.00%
			-18%
			-38%
		

Dasin Retail Tr**
			CEDU
			616.7
			0.00%
			-2%
			1%
		

BHG Retail REIT
			BMGU
			295.5
			0.00%
			-9%
			-13%
		

Mapletree NAC Tr
			RW0U
			3064.8
			-0.10%
			-4%
			-16%
		

IREIT Global
			UD1U
			446.1
			-0.10%
			-3%
			-8%
		

OUE Com REIT
			TS0U
			2030.5
			-0.20%
			-7%
			-30%
		

EC World REIT
			BWCU
			550.7
			-0.20%
			-3%
			-4%
		

Elite Com REIT GBP
			MXNU
			399
			-0.20%
			-1%
			N/A
		

Mapletree Com Tr
			N2IU
			6395.9
			-0.30%
			-10%
			-18%
		

Frasers Cpt Tr
			J69U
			2769.3
			-0.30%
			-5%
			-11%
		

Soilbuild Biz REIT
			SV3U
			519.9
			-0.40%
			-1%
			-16%
		

Keppel REIT
			K71U
			3568.9
			-0.50%
			-11%
			-12%
		

Cromwell REIT EUR
			CNNU
			1819.5
			-0.50%
			3%
			-6%
		

ESR-REIT
			J91U
			1361.5
			-0.50%
			-8%
			-24%
		

Lendlease REIT
			JYEU
			749.9
			-0.50%
			-8%
			-28%
		

Prime US REIT USD
			OXMU
			1119.3
			-0.60%
			-5%
			-12%
		

Sasseur REIT
			CRPU
			919.1
			-0.60%
			-1%
			-8%
		

Utd Hampshire REIT USD
			ODBU
			365.3
			-0.70%
			-8%
			N/A
		

Lippo Malls Tr
			D5IU
			345.4
			-0.70%
			-22%
			-45%
		

ARA H Trust USD
			XZL
			273.7
			-0.70%
			-24%
			-57%
		

CapitaMall Trust
			C38U
			7011.3
			-0.80%
			-14%
			-21%
		

First REIT
			AW9U
			430.4
			-0.80%
			-23%
			-43%
		

Ascendas-iTrust**
			CY6U
			1514.7
			-0.90%
			-10%
			-12%
		

Manulife REIT USD
			BTOU
			1588.6
			-1.00%
			-9%
			-21%
		

Suntec REIT
			T82U
			3920.9
			-1.30%
			-11%
			-22%
		

Starhill Global REIT
			P40U
			954.8
			-1.30%
			-24%
			-38%
		

AIMS APAC REIT
			O5RU
			833.9
			-1.70%
			-4%
			-13%
		

CapitaR China Tr
			AU8U
			1406.3
			-3.00%
			-14%
			-25%
		

Average
			 
			 
			 
			-5%
			-14%
		

 ** note Business Trust. Source: SGX, Bloomberg, Refinitiv (Data as of 28 August 2020). Note table sort by highest net institutional buys to highest net institutional sells proportionate to current market capitalisation.

 

By comparison, the 10 trusts of the S-REIT sector that saw the highest net institutional inflow proportionate to market capitalisation following the major market lows of 23 March through to the post-low high of 9 June included First REIT, Ascendas REIT, Frasers Logistics &amp; Commercial Trust, Mapletree Logistics Trust, Soilbuild Business Space REIT, Keppel REIT, EC World REIT, Keppel Pacific Oak REIT, Ascott Trust and SPH REIT. During that period, the 10 trusts averaged a 54% Total Return compared to the remaining trusts of the S-REIT Sector gaining 45%.



S-REITs Most Sought by Institutions Since 9 June

David Blennerhassett




For the month of August, 9 new deals were discussed on Smartkarma with an overall announced deal size of ~US$35bn.


Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow up discussions, or simply click on the insight link(s) below the name.






New Deals


Industry


Size (US$bn)


Type


Premium




Australia




3P Learning (3PL AU) 
Online Education
0.1
Scheme
23.3%


     Softbrain (4779 JP): Tender Offer Could Be a Done Deal



Village Roadshow (VRL AU) 
Media
0.3
Scheme
36%


     Village Roadshow: BGH's Overly Caveated Offer



Hong Kong




Leyou Technologies (1089 HK) 
Gaming
1.3
Scheme
30.3%



     Leyou (1089): Tencent Is Game As Scheme Tabled
     Leyou (1089 HK): Reg Approvals Not An Issue. Unless Politicised




Xinghua Port Holdings (1990 HK) 
Port ops
0.3
VGO
23.7%


     Xinghua Port (1990 HK): Cash Offer Trading with a View to Complete



Japan




Kawasumi Laboratories (7703 JP) 
Medical
0.3
Tender offer
117%


     Kawasumi Labs Takeout Tender Offer - Big Premium Is Not Too Big



Softbrain (4779 JP) 
Software solutions
0.1
Tender Offer
116%


     Softbrain (4779 JP): Tender Offer Could Be a Done Deal



Taiwan








Casetek Holdings (5264 TT) 
Electronics
0.5
Merger
15.3%


     Casetek - Pegatron: WFH Dynamics Mean Taiwan Cash Merger Trading Cheapish?



US




Livongo Health Inc (LVGO US) 
Medical
15.5
Merger
56%


     Livongo-Teladoc: Virtual Healthcare Giants to Combine



Varian Medical Systems (VAR US) 
Medical
16.4
Merger
24.4%


     Varian-Siemens Deal: DAX Promotion on the Cards for the Acquirer





Source: Smartkarma Insights


Village Roadshow (VRL AU)'s premium in the table above is with respect to the high end of the Offer range. Also, for Leyou Technologies (1089 HK), I've used the premium over the closing price of HK$2.55/share on 19 September 2019, which was the last trading day prior to Leyou's announced it was in preliminary discussions with various independent potential investors.


The average premium for the new deals announced (or first discussed) in August was ~49% and the YTD average premium for all deals discussed on Smartkarma (95 all-in) is 34%.  The average for all deals discussed on Smartkarma in 2019 (145 deals all-in) was 31.5%.



The charts below provide a snapshot of deals YTD discussed on Smartkarma. Where the deal is a merger of equals or similar, I've assigned no premium.







Summary of News in August of Arb Situations On Smartkarma's Radar



(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in July, I've included a link, in bold, to that insight in italics.)






Australia


Comments (with links to announcements &amp; insights)




Cardinal Resources (CDV AU) 

19-Aug: As to be expected - Shandong satisfies the FIRB condition. 




Cassini Resources (CZI AU) 

17-Aug: Scheme book despatched. Scheme meeting to be held on the 21 Sept.




Cromwell Property (CMW AU) 

3-Aug: CMW has brought an application to the Federal Court - centered around what it deems is an unlawful association between ARA Real Estate and Gordon Tang &amp; concert parties. 
7-Aug: ARA announced it intends to acquire 67.5mn Cromwell shares on-market at a price up to A$0.92/share.  Cromwell/​ARA: Hit &amp; Run
23-Aug: Proportional Offer now declared unconditional. The Offer is expected to expire on the 31 Sept - unless extended. 
27-Aug: CMW's FY20 results are out.  Pretty decent - statutory &amp; operating profit p 13.3% &amp; 27% to A$181.1mn &amp; A$221.2mn. FY20 distribution up 3.4% to 7.50 cps. NYA of A$0.99/share vs A$0.97 in FY19. CMW's ongoing attack on ARA's proportional offer begins on page 32. 




Infigen Energy (IFN AU) 

26-Aug: The Offer on Infigen byIberdrola SA (IBE SM) was due to close today but was today extended until 9 September. Directors at Infigen urged shareholders to accept the Offer at A$0.92/share NOW two days ago based on the fact that there were only 8% of shares out in float after Iberdrola had 72.76% and UAC had 19.94%. Iberdrola announced they had 76.34% meaning float was just 3.72%. 




Onevue Holdings (OVH AU) 

27-Aug: FY20 results




OptiComm Ltd (OPC AU) 

7-Aug: Scheme booklet registered. Scheme meeting on the 10 Sept.




Village Roadshow (VRL AU) 

11-Aug: Village Roadshow: BGH's Overly Caveated Offer




Zenith Energy Ltd/AU (ZEN AU) 

1-Aug: Minorities approve the Scheme - bit it was a close-run thing. For the general scheme vote - in which the rollover shareholders could not vote- 80.25% voted for, 18.98% against. Scheme effective on the 7 August and implemented on the 21 August.






 




Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Jingneng Clean Energy (579 HK) 
In its monthly update, the company announces that there is no update.



Car Inc (699 HK) 
21-Aug: Car Inc (699 HK): MBK Takes A Turn At The Wheel




CGN New Energy Holdings (1811 HK) 
28-Aug: In its monthly update, CGN says there is no update on the deal.



Golden Meditech Holdings (801 HK) 

21-Aug: The Scheme Doc is now out. Scheme meeting - 16 Sept;  Effective date       - 14 Oct; Cheques - 23 Oct. IFA (Somerley) reckons the Offer is fair &amp; reasonable. 




Haier Electronics Group Co (1169 HK) 

2-Aug: Haier (1169 HK): Avatar Scrip Offer From Parent
4-Aug: StubWorld: Haier Smart Home Goes Limit Up. Again
28-Aug: Haier announced bondholders have approved the EB-CB proposal. 




Huadian Fuxin Energy Corp (816 HK) 

21-Aug: Huadian has announced the fulfillment of the pre-conditions - the approvals from NDRC, MoC, &amp; SAFE. Doc to be dispatched on the 28 August (on or before).  The timetable will be close to what I initially tabled. Currently at a gross/annualised spread of 4.4%/24.6%.    26-Aug:  The Doc is out. The H Class meeting is to be held on the 16 Sept. the IFA says fair &amp; reasonable. 
Huadian Fuxin (816 HK): Doc Out. Done Deal




Jinmao Hotel &amp; Jinmao (China) Hotel Investments and Management Limited (6139 HK) 

16-Aug: Doc out. 10 Sept for the Court Meeting, Cheques 9 Oct.




Leyou Technologies (1089 HK) 

4-Aug: Leyou – You Need to Be Tracking Warframe This Month if You Own This
26-Aug: Leyou – We Expect a Deal Soon and at the Top End of Reported Terms or Possibly Higher
28-Aug: Leyou (1089 HK): Reg Approvals Not An Issue. Unless Politicised
2+-Aug: Leyou (1089): Tencent Is Game As Scheme Tabled




O-Net Technologies (Group) (877 HK) 

No August update




Skyworth Group Limited (751 HK) 

20-Aug: Skyworth (751 HK): Partial Unconditional As Whitewash Waiver Approved




Yixin Group Ltd (2858 HK) 
6-Aug: "Subject to the clearance of any comments the SEC may have in relation to the US Filings, Bitauto Holdings (BITA US) will proceed with convening a shareholders’ meeting to approve and authorize the Merger Agreement, the Plan of Merger and the Merger Transactions. No date has been fixed for such shareholders’ meeting of Bitauto as of the date of this announcement"









India


Comments (with links to announcements &amp; insights)




Adani Power Ltd (ADANI IN) 

No August update




Hexaware Technologies (HEXW IN) 

11-Aug: Hexaware's delisting proposal was approved by shareholders to move forward to a Reverse Book Build auction as announced by the company on the evening of 10 August.




INEOS Styrolution India Limited (INEOS IN) 

No August update




J.B. Chemicals &amp; Pharmaceut (JBCP IN) 

No August update




Sequent Scientific (SEQ IN) 

No Aug update




Vedanta Ltd (VEDL IN) 

18-Aug: The Vedanta Resources (VED LN) bond raised nearly US$1.4bn apparently, on US$2.25bn of demand with a slightly lower than originally proposed coupon of 13% (that's still high).  
Putting Sightlines on the Vedanta Delisting Offer TIMING











Indonesia


Comments 




Bank Permata (BNLI IJ) 

23-Aug: Permata Bank: What Is Delaying the MTO? 26-Aug:  Permata Bank Mandatory Takeover Launched. Finally











Japan


Comments (with links to announcements)




Cocokara Fine (3098 JP) 
No August update



Excel Co Ltd (7591 JP) 
No August update



FamilyMart Co Ltd (8028 JP) 

7-Aug:Itochu Haz Opinionz About FamilyMart
25-Aug: Itochu Gets the FamiMa HunnyPot And Now Things Get Funky




Japan U Pica (7891 JP) 
No August update



Keihin Corp (7251 JP) / Showa Corp (7274 JP) 
No August update . 



LIXIL VIVA (3564 JP) 

No August update




Maxvalu Kyushu (3171 JP) / Aeon Kyushu (2653 JP)

No August update



Nichii Gakkan Co (9792 JP) 

2-Aug: Nichii Gakkan: Will a Blandiloquent But Bletcherous Bain Bump Bulldoze Backbenchers?
17-Aug:Nichii Gakkan Scandal To Come? Baring PE Proposed ¥2,000/Share




OOTOYA Holdings (2705 JP) 

19-Aug: Ootoya – Oisix Ra Daichi Tie-Up Could Sway Some Votes But Unlikely to Solve LT Issues
26-Aug: Ootoya – Colowide Extends Drama and TOB Deadline With an Eye on Low Shareholder Turnout
26-Aug: Ootoya Tender Offer - Still Tough, Still a Sell




Sanyo Chemical Ind (4471 JP) /  Nippon Shokubai (4114 JP) 
5-Aug: SanyoChem/NipponShokubai Forecasts Out - Stay Long the SC/NS Ratio for Merger Rerate




Sony Financial Holdings (8729 JP) 

No August update










Malaysia


Comments (with links to announcements)




TA Global Bhd (TAGB MK) 
No August update









New Zealand


Comments (with links to announcements and insights)




Augusta Capital (AUG NZ) 

7-Aug:  Centuria Capital (CNI AU) announced that they had sufficient acceptances of its takeover offer for Augusta Capital (AUG NZ) and would cross the 90% threshold. Once Centuria Capital (CNI AU) acquires these shares on 12 August, they will commence the squeezeout of all the remaining shares.




Metlifecare Ltd (MET NZ) 

26-Aug: Metlifecare's Full-Year Results: MACs (Probably) Not Triggered: 










Singapore


Comments (with links to insights and announcements)




Accordia Golf Trust (AGT SP) 

9-Aug: Accordia Golf Discord Dismissed, Accord Reached. With a Bump




Capitaland Commercial Trust (CCT SP) 

7-Aug: Capitaland Commercial Trust (CCT SP) has filed an application with the Court for permission to convene, hold and conduct the Trust Scheme Meeting by electronic means while the COVID-19 (Temporary Measures) are in effect.  The Court will hear the application at 4pm on 12 August, following which we should get a better idea of the timeline for the merger of CCT and CMT and subsequent delisting of Capitaland Commercial Trust (CCT SP). 




ESR-REIT (EREIT SP) / Sabana Shari'ah Compliant Industrial REIT (SSREITR SP) 

10-Aug: ESR/Sabana: Better Off Selling Assets
28-Aug: In response to media queries concerning the proposed merger of ESR-REIT (EREIT SP) &amp; Sabana Shari'ah Compliant Industrial REIT (SSREITR SP), the MAS said that its "regulatory framework does not prohibit a shareholder group from owning substantial stakes in two REIT managers managing REITs invested in the same property class".




Keppel Corp Ltd (KEP SP) 

2-Aug: It's a MACastrophe!!! Keppel Surprises Bigly and Badly in O&amp;M
9-Aug: What Triggers a Temasek Decision on Keppel?
10-Aug: Temasek Walks Away from Keppel Deal  The Deal Broke.




Perennial Real Estate Holdings (PREH SP) 
6-Aug: Perennial has dispatched the documents for the compulsory acquisition of shares. Primero now controls 90.33% of the total issued shares of the company and the shares will be delisted following the compulsory acquisition.



Sembcorp Industries (SCI SP) / Sembcorp Marine (SMM SP) 

11-Aug: Sembcorp Marine Rights Decided And "Virtual IPO" Set (Still Avoid)
13-Aug: Sembcorp Industries - A Simple Story Which Looks Complicated
14-Aug: StubWorld: Buy Sembcorp Industries. Don't Buy Swire  SMM shares went ex-. The Rights Traded. Now they have stopped trading and next week people exercise or do not. The following week is the spinoff.










Taiwan


Comments (with links to insights and announcements)




Alpha Networks (3380 TT) 

25-Aug: A month after the result in the Alpha Networks (3380 TT) Tender Offer which saw the shares drop 20% to well below NT$24.00 for a few days, the stock has rebounded so is now at NT$28.00+ for much of the past week. It is not clear why other than the possibility someone is covering a short.




Boardtek Electronics (5349 TT) 
No August update









Thailand


Comments 




Bumrungrad Hospital Pub Co (BH TB) &amp; Bangkok Dusit Medical Services (BDMS TB)  
27-Aug: The Tender Offer is now officially cancelled. 




 




Vietnam


Comments 




Viglacera Corp (VGC VN) 
24-Aug: Vietnam Electrical Equipment J (GEX VN) has announced the Tender Offer to buy 95 million shares of Viglacera Corp (VGC VN). The price is VND 17,700 a share which is well below the current price. You have to imagine this either being set up to fail, or the government has agreed to tender in. The document is linked here (in Vietnamese).




 




Middle East


Comments 




Samba Financial Group (SAMBA AB) /
National Commercial Bank (NCB AB) 

No August update 











Europe/UK


Comments (with links to announcements and insights)




Aker Solutions (AKSO NO) 

21-Aug: EGM set for the 25 Sept




Cello Health plc (CLL LN) 

11-Aug: Scheme becomes effective




Godewind Immobilien AG (GWD GR) 

No August update 




Mediawan (MDW FP) 
30-Jul: The Offer is now open




NetEnt AB (NETB SS) 

No August update 








<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-08/Capture_17.PNG' alt='KeppelREIT-CEO' />
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 <div class='content-caption'>KeppelREIT-CEO</div>
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As far back as he can remember, the twin touchstones of Paul Tham’s life have been wisdom and learning. 
Growing up, a familiar mantra was one expounded by the Book of Proverbs in the Bible – “Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding”. 
“My godfather taught me the importance of wisdom and understanding,” the CEO of the manager of SGX-listed Keppel REIT recalled. “Both are tied to two key skills – the willingness to learn, as well as the ability to learn continuously – and involve lots of hard work.” 
Driven by a passion to build and create, Tham began his career as a structural engineer in New York, after graduating with a Bachelor of Science degree in Civil &amp; Environmental Engineering from Cornell University. From for-profit buildings, he moved to non-profit work, which included the construction of school and church buildings. 
“I was picking up different skills every day,” recalled Tham, who also holds a Masters in Business Administration from Singapore Management University. 
“In one of the volunteer projects to build a school in upstate New York, we ended up doing most of the construction work ourselves – driving forklifts and operating small excavators. That was one of the most satisfying projects I was involved in.” 
His next stop – Bain &amp; Company. In his role as management consultant, Tham worked with multinational companies in Asia Pacific on a wide range of functions, including financial performance management and growth strategies. There, he experienced a steep learning curve. 
“Management consulting teaches you to learn continuously. You’re working on new projects, reading research reports, and asking questions all the time. You have to work hard to pick up knowledge on new industries and markets constantly,” he added. 
“And the fastest way to learn is to tap on the expertise and experience of others. The advantage is immediate – you gain wisdom from someone else’s experience and learning, which you can then apply to your own life and work.” 
In 2014, Tham joined Keppel Corporation’s Group Strategy &amp; Development unit, where he played a key role in the formation of Keppel Capital, eventually becoming Keppel Capital’s Chief Financial Officer. The 38-year-old was appointed Deputy Chief Executive Officer of the manager of Keppel REIT in 2018, and assumed his current appointment as CEO a year later. Portfolio Optimisation 
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts across the region. It has the objective of generating stable income and long-term growth for unitholders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and pan-Asia. 
The REIT has assets under management of approximately S$8 billion in Singapore, the key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul in South Korea. 
Keppel REIT is sponsored by Keppel Land Ltd, and managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital – Asia’s premier asset manager with a diversified, global portfolio in real estate, infrastructure and data centre properties. 
During his two years in Keppel REIT, Tham has implemented key strategies to put the REIT on a steady growth trajectory. 
The first is portfolio optimisation, which allows the REIT to achieve long-term sustainable returns for its unitholders. This includes capturing value through the divestment of lower yielding assets, which in turn increases the manager’s financial flexibility to fund growth through reinvestments, continue its unit buyback programme, distribute capital gains, or pare down debt. 
“Portfolio optimisation for us is really to improve income resilience and portfolio yield. Over the last two years, we’ve divested about S$1.1 billion worth of assets,” Tham said, pointing to the paring of a 20% stake in Ocean Financial Centre in December 2018, the purchase of Seoul’s T Tower in May 2019 – marking the REIT’s first foray into South Korea – and the sale of Bugis Junction Towers last November. 
“The focus is to enhance DPU, and if you look at our recent results, it seems to be working, with Keppel REIT seeing the first year-on-year increase in DPU in 2019 after five years of decline,” he noted, referring to distributions per unit, a metric closely watched by unitholders. 
For the year ended 31 December 2019, Keppel REIT’s DPU edged higher to 5.58 Singapore cents from 5.56 cents the previous year. Between 2013 and 2018, its DPU had registered year-on-year declines. 
The second prong of Tham’s strategy involves boosting the REIT’s capital efficiency by managing both debt and equity. In mid-2018, Keppel REIT became the first REIT in Singapore to run a DPU-accretive, unit buyback program. As at end-2019, the REIT had purchased and cancelled 95.3 million units. 
“We’ve seen the benefits in our first-half 2020 financial results, where distributable income was largely similar, but DPU rose due to a smaller unit base.” 
The REIT has also reduced its overall cost of debt. “We’ve restructured some of our loans, launched convertible bonds, all in an effort to push down borrowing cost,” he added. 
As at 30 June 2020, all the REIT’s 2020 loans have been refinanced. All-in interest rate was also lower at 2.48% per annum versus 2.86% for the same period last year, while aggregate leverage was 36.3%, with a weighted average term to maturity of 3.6 years. Interest cover stood at 3.5 times, with 79% of its borrowings pegged to fixed rates. Resilient and Stable 
Looking ahead, Keppel REIT will remain a Singapore-centric REIT, Tham said. About 80% of its assets under management (AUM) is in Singapore’s prime Central Business District (CBD). 
“There will be a shift over time as we raise our overseas exposure, such as in Australia and South Korea, but it will be marginal, for example, lifting it to 25%, or even 30%, from 20%.” 
And an overseas footprint has boosted resilience. “Investing in assets across Australia and South Korea enhances our ability to deliver sustainable returns over time through changing property cycles in these different markets,” he said. 
Australian leases, which tend to stretch five to 10 years versus Singapore’s three to five years, also provide added support. “These longer leases with annual rental escalations offer more stability, and increase the REIT’s ability to grow DPU, even if one market is experiencing a downcycle,” he added. 
Meanwhile, the coronavirus outbreak has created headwinds and offered meaningful lessons, Tham noted. 
“COVID-19 has been challenging for retail and hospitality assets, but for an office landlord like us with a small retail component, there’s been minimal impact,” he said. “Nonetheless, there’s a fair amount of uncertainty due to the global recession and rising geopolitical tensions, so our main focus is proactive engagement with our tenants.” 
At one end of the spectrum, technology-related tenants are still expanding, with their growth fuelled by digitalisation trends that accelerated in the wake of the pandemic. At the other end, hospitality and travel-related businesses are struggling. 
“From a leasing standpoint, we try to accommodate their requirements as much as possible – making sure additional space is available for those who need it, and being flexible on lease negotiations with others to retain tenants in our buildings.” 
As at 30 June 2020, Keppel REIT’s tenant support measures stood at an estimated S$12.5 million. These include the full pass-through of property tax rebates and cash grants from the Singapore government. It has also allowed S$1.6 million of rents to be deferred. 
Its portfolio performance remains bolstered by a high committed occupancy rate of 98.6%, as well as long weighted average lease expiry of about 4.6 years and 6.5 years for the overall portfolio and top 10 tenants respectively. For the first six months of 2020, the REIT had a tenant retention rate of 71%. Focus on Future-Proofing 
Looking ahead, future-proofing the REIT’s commercial spaces is key, Tham said. 
“We need to ensure our buildings have the best-in-class infrastructure, such as improving indoor air quality with advanced filtration systems, boosting standards of cleanliness, and using technology to reduce manpower requirements and human interactions,” he added. 
This can be seen from its robot – RoboGuard – that patrols the premises of Ocean Financial Centre to enforce safe-distancing measures. 
“We’re also harnessing technology and automation for other key areas, such as lifts, turnstiles and toilets, and exploring the use of contactless doors within our buildings.” 
Longer term, how tenants use their office space will also evolve, and Keppel REIT needs to stay ahead of such emerging trends, Tham said. 
“Physical offices will remain a necessity, although the form and functions of the office will evolve. Many firms will likely incorporate work-from-home protocols in their future planning. And employees and tenants will want more flexibility from their office space going forward,” he added. 
“Some companies may need less space, but many functions will still require space for social interaction, client engagements and collaborations, especially if you’re a customer-facing business or in the creative industry.” 
There may also be a reversal of densification. “Space for each employee may be increased to incorporate social distancing within an office layout, reversing the trend of higher density over the last two decades,” he added. 
The resulting impact on office demand, therefore, will likely be a measured one, as tenants re-assess their needs along with the terms of their existing leases, which are typically three to five years long. 
“It will become more important to have the ‘right’ office space. If companies reduce their footprint, they will be able to pay more for Grade A premium space, and demand top-notch infrastructure – buildings that are well-networked, well-located, with high hygiene standards,” Tham pointed out. 
In tandem with these considerations, the repositioning of assets has emerged, and will continue to gain momentum. “At the end of the day, owning the right assets will be instrumental to landlords surviving, and thriving,” he added. 
There’s also the potential for supply deferment, as ongoing new projects may be delayed by social distancing restrictions at construction sites. “If demand for commercial buildings moves down slightly, but at the same time, supply moves down as well, net-net, the sector could remain relatively stable over time.” 
Despite the evolving industry, Tham sleeps like a log. “Having three young kids at home means I can fall asleep in a heartbeat – nothing keeps me awake!” laughed the father of two boys and a girl, aged 10 months to nine years. 
“But seriously, to be able to stay worry-free, all the credit goes to my team – they’re doing a really great job,” he said. “Over the years, I have learnt more from them than they from me.” Keppel REIT 
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts pan‐Asia. Keppel REIT’s objective is to generate stable income and long‐term growth for unitholders by owning and investing in a portfolio of quality income‐producing commercial real estate and real estate‐related assets in Singapore and pan‐Asia. The REIT has assets under management of approximately S$8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea. Keppel REIT is sponsored by Keppel Land Ltd, one of Asia's leading property companies. It is managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital Holdings Pte Ltd. Keppel Capital is a premier asset manager in Asia with a diversified portfolio in real estate, infrastructure and data centre properties in key global markets.

 
The company website is: <a href="www.keppelreit.com">www.keppelreit.com</a>. 
Click <a href="https://www.sgx.com/securities/equities/K71U">here</a> for the company's StockFacts page. 
For the six months ended 30 June 2020 financial results, click <a href="https://links.sgx.com/FileOpen/Keppel%20REIT%202Q20%20Financial%20Results.ashx?App=Announcement&amp;FileID=624206">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="///C:/Users/tanje/Desktop/Working%20Files/kopi-C/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    KeppelREIT-CEO


As far back as he can remember, the twin touchstones of Paul Tham’s life have been wisdom and learning.  
Growing up, a familiar mantra was one expounded by the Book of Proverbs in the Bible – “Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding”.  
“My godfather taught me the importance of wisdom and understanding,” the CEO of the manager of SGX-listed Keppel REIT recalled. “Both are tied to two key skills – the willingness to learn, as well as the ability to learn continuously – and involve lots of hard work.”  
Driven by a passion to build and create, Tham began his career as a structural engineer in New York, after graduating with a Bachelor of Science degree in Civil &amp; Environmental Engineering from Cornell University. From for-profit buildings, he moved to non-profit work, which included the construction of school and church buildings.  
“I was picking up different skills every day,” recalled Tham, who also holds a Masters in Business Administration from Singapore Management University.  
“In one of the volunteer projects to build a school in upstate New York, we ended up doing most of the construction work ourselves – driving forklifts and operating small excavators. That was one of the most satisfying projects I was involved in.”  
His next stop – Bain &amp; Company. In his role as management consultant, Tham worked with multinational companies in Asia Pacific on a wide range of functions, including financial performance management and growth strategies. There, he experienced a steep learning curve.  
“Management consulting teaches you to learn continuously. You’re working on new projects, reading research reports, and asking questions all the time. You have to work hard to pick up knowledge on new industries and markets constantly,” he added.  
“And the fastest way to learn is to tap on the expertise and experience of others. The advantage is immediate – you gain wisdom from someone else’s experience and learning, which you can then apply to your own life and work.”  
In 2014, Tham joined Keppel Corporation’s Group Strategy &amp; Development unit, where he played a key role in the formation of Keppel Capital, eventually becoming Keppel Capital’s Chief Financial Officer. The 38-year-old was appointed Deputy Chief Executive Officer of the manager of Keppel REIT in 2018, and assumed his current appointment as CEO a year later.  Portfolio Optimisation  
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts across the region. It has the objective of generating stable income and long-term growth for unitholders by owning and investing in a portfolio of quality income-producing commercial real estate and real estate-related assets in Singapore and pan-Asia.  
The REIT has assets under management of approximately S$8 billion in Singapore, the key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul in South Korea.  
Keppel REIT is sponsored by Keppel Land Ltd, and managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital – Asia’s premier asset manager with a diversified, global portfolio in real estate, infrastructure and data centre properties.  
During his two years in Keppel REIT, Tham has implemented key strategies to put the REIT on a steady growth trajectory.  
The first is portfolio optimisation, which allows the REIT to achieve long-term sustainable returns for its unitholders. This includes capturing value through the divestment of lower yielding assets, which in turn increases the manager’s financial flexibility to fund growth through reinvestments, continue its unit buyback programme, distribute capital gains, or pare down debt.  
“Portfolio optimisation for us is really to improve income resilience and portfolio yield. Over the last two years, we’ve divested about S$1.1 billion worth of assets,” Tham said, pointing to the paring of a 20% stake in Ocean Financial Centre in December 2018, the purchase of Seoul’s T Tower in May 2019 – marking the REIT’s first foray into South Korea – and the sale of Bugis Junction Towers last November.  
“The focus is to enhance DPU, and if you look at our recent results, it seems to be working, with Keppel REIT seeing the first year-on-year increase in DPU in 2019 after five years of decline,” he noted, referring to distributions per unit, a metric closely watched by unitholders.  
For the year ended 31 December 2019, Keppel REIT’s DPU edged higher to 5.58 Singapore cents from 5.56 cents the previous year. Between 2013 and 2018, its DPU had registered year-on-year declines.  
The second prong of Tham’s strategy involves boosting the REIT’s capital efficiency by managing both debt and equity. In mid-2018, Keppel REIT became the first REIT in Singapore to run a DPU-accretive, unit buyback program. As at end-2019, the REIT had purchased and cancelled 95.3 million units.  
“We’ve seen the benefits in our first-half 2020 financial results, where distributable income was largely similar, but DPU rose due to a smaller unit base.”  
The REIT has also reduced its overall cost of debt. “We’ve restructured some of our loans, launched convertible bonds, all in an effort to push down borrowing cost,” he added.  
As at 30 June 2020, all the REIT’s 2020 loans have been refinanced. All-in interest rate was also lower at 2.48% per annum versus 2.86% for the same period last year, while aggregate leverage was 36.3%, with a weighted average term to maturity of 3.6 years. Interest cover stood at 3.5 times, with 79% of its borrowings pegged to fixed rates.  Resilient and Stable  
Looking ahead, Keppel REIT will remain a Singapore-centric REIT, Tham said. About 80% of its assets under management (AUM) is in Singapore’s prime Central Business District (CBD).  
“There will be a shift over time as we raise our overseas exposure, such as in Australia and South Korea, but it will be marginal, for example, lifting it to 25%, or even 30%, from 20%.”  
And an overseas footprint has boosted resilience. “Investing in assets across Australia and South Korea enhances our ability to deliver sustainable returns over time through changing property cycles in these different markets,” he said.  
Australian leases, which tend to stretch five to 10 years versus Singapore’s three to five years, also provide added support. “These longer leases with annual rental escalations offer more stability, and increase the REIT’s ability to grow DPU, even if one market is experiencing a downcycle,” he added.  
Meanwhile, the coronavirus outbreak has created headwinds and offered meaningful lessons, Tham noted.  
“COVID-19 has been challenging for retail and hospitality assets, but for an office landlord like us with a small retail component, there’s been minimal impact,” he said. “Nonetheless, there’s a fair amount of uncertainty due to the global recession and rising geopolitical tensions, so our main focus is proactive engagement with our tenants.”  
At one end of the spectrum, technology-related tenants are still expanding, with their growth fuelled by digitalisation trends that accelerated in the wake of the pandemic. At the other end, hospitality and travel-related businesses are struggling.  
“From a leasing standpoint, we try to accommodate their requirements as much as possible – making sure additional space is available for those who need it, and being flexible on lease negotiations with others to retain tenants in our buildings.”  
As at 30 June 2020, Keppel REIT’s tenant support measures stood at an estimated S$12.5 million. These include the full pass-through of property tax rebates and cash grants from the Singapore government. It has also allowed S$1.6 million of rents to be deferred.  
Its portfolio performance remains bolstered by a high committed occupancy rate of 98.6%, as well as long weighted average lease expiry of about 4.6 years and 6.5 years for the overall portfolio and top 10 tenants respectively. For the first six months of 2020, the REIT had a tenant retention rate of 71%.  Focus on Future-Proofing   
Looking ahead, future-proofing the REIT’s commercial spaces is key, Tham said.  
“We need to ensure our buildings have the best-in-class infrastructure, such as improving indoor air quality with advanced filtration systems, boosting standards of cleanliness, and using technology to reduce manpower requirements and human interactions,” he added.  
This can be seen from its robot – RoboGuard – that patrols the premises of Ocean Financial Centre to enforce safe-distancing measures.  
“We’re also harnessing technology and automation for other key areas, such as lifts, turnstiles and toilets, and exploring the use of contactless doors within our buildings.”  
Longer term, how tenants use their office space will also evolve, and Keppel REIT needs to stay ahead of such emerging trends, Tham said.  
“Physical offices will remain a necessity, although the form and functions of the office will evolve. Many firms will likely incorporate work-from-home protocols in their future planning. And employees and tenants will want more flexibility from their office space going forward,” he added.  
“Some companies may need less space, but many functions will still require space for social interaction, client engagements and collaborations, especially if you’re a customer-facing business or in the creative industry.”  
There may also be a reversal of densification. “Space for each employee may be increased to incorporate social distancing within an office layout, reversing the trend of higher density over the last two decades,” he added.  
The resulting impact on office demand, therefore, will likely be a measured one, as tenants re-assess their needs along with the terms of their existing leases, which are typically three to five years long.  
“It will become more important to have the ‘right’ office space. If companies reduce their footprint, they will be able to pay more for Grade A premium space, and demand top-notch infrastructure – buildings that are well-networked, well-located, with high hygiene standards,” Tham pointed out.  
In tandem with these considerations, the repositioning of assets has emerged, and will continue to gain momentum. “At the end of the day, owning the right assets will be instrumental to landlords surviving, and thriving,” he added.  
There’s also the potential for supply deferment, as ongoing new projects may be delayed by social distancing restrictions at construction sites. “If demand for commercial buildings moves down slightly, but at the same time, supply moves down as well, net-net, the sector could remain relatively stable over time.”  
Despite the evolving industry, Tham sleeps like a log. “Having three young kids at home means I can fall asleep in a heartbeat – nothing keeps me awake!” laughed the father of two boys and a girl, aged 10 months to nine years.  
“But seriously, to be able to stay worry-free, all the credit goes to my team – they’re doing a really great job,” he said. “Over the years, I have learnt more from them than they from me.”   Keppel REIT  
Keppel REIT listed on SGX in April 2006. It is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts pan‐Asia. Keppel REIT’s objective is to generate stable income and long‐term growth for unitholders by owning and investing in a portfolio of quality income‐producing commercial real estate and real estate‐related assets in Singapore and pan‐Asia. The REIT has assets under management of approximately S$8 billion in Singapore, key Australian cities of Sydney, Melbourne, Brisbane and Perth, as well as Seoul, South Korea. Keppel REIT is sponsored by Keppel Land Ltd, one of Asia's leading property companies. It is managed by Keppel REIT Management Ltd, a wholly owned subsidiary of Keppel Capital Holdings Pte Ltd. Keppel Capital is a premier asset manager in Asia with a diversified portfolio in real estate, infrastructure and data centre properties in key global markets.

 
The company website is: www.keppelreit.com.  
Click here for the company's StockFacts page.  
For the six months ended 30 June 2020 financial results, click here.  
 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.



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Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.

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