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

CDL Hospitality Trusts / Equity Bottom-Up

<ul><li>REIT Watch - S-Reits rebound amid less hawkish rates expectations The FTSE EPRA Nareit Developed Index gained close to 4 per cent last week while Singapore’s iEdge S-Reit Index booked its strongest week this year with 6 per cent returns.</li><li>Outperforming S-Reits for the week include Manulife US Reit, Keppel DC Reit, Aims Apac Reit, Keppel Pacific Oak US Reit, and CDL Hospitality Trusts.</li></ul>

REIT Watch - S-Reits rebound amid less hawkish rates expectations The FTSE EPRA Nareit Developed Index gained close to 4 per cent last week while Singapore’s iEdge S-Reit Index booked its strongest week this year with 6 per cent returns.Outperforming S-Reits for the week include Manulife US Reit, Keppel DC Reit, Aims Apac Reit, Keppel Pacific Oak US Reit, and CDL Hospitality Trusts.

REIT Watch - S-REITs rebound amidst less hawkish rates expectations

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Under revised terms, <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp (SMM SP)</a> will issue fewer shares to <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel (KEP SP)</a>. It's now a takeover rather than Scheme. Keppel will deliver more shares to shareholders, keeping less.  </li>
<li>Stay cautiously positive on <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> until the stock starts trading as if those who bought on momentum look like they are getting out. </li>
<li>With investors chucking in the towel and the HSI touching a thirteen-year low, it's time for some old-school perspective applying Benjamin Graham's Net Nets</li>
</ul>


Under revised terms, Sembcorp (SMM SP) will issue fewer shares to Keppel (KEP SP). It's now a takeover rather than Scheme. Keppel will deliver more shares to shareholders, keeping less.  
Stay cautiously positive on Socionext (6526 JP) until the stock starts trading as if those who bought on momentum look like they are getting out. 
With investors chucking in the towel and the HSI touching a thirteen-year low, it's time for some old-school perspective applying Benjamin Graham's Net Nets


Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>The agreed equity value exchange ratio between Keppel O&amp;M and <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> was revised from 56%:44% to 54%:46%. </li>
<li>For <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> shareholders, the revised terms will lower the overall value but in a shorter deal completion, higher EPS accretion and higher in-specie distribution of SMM shares.</li>
<li>The deal is expected to close by the end of the year. Our revised Keppel SoTP valuation is S$8.17 per share, which is 23% above the last close.</li>
</ul>


The agreed equity value exchange ratio between Keppel O&amp;M and Sembcorp Marine (SMM SP) was revised from 56%:44% to 54%:46%. 
For Keppel Corp (KEP SP) shareholders, the revised terms will lower the overall value but in a shorter deal completion, higher EPS accretion and higher in-specie distribution of SMM shares.
The deal is expected to close by the end of the year. Our revised Keppel SoTP valuation is S$8.17 per share, which is 23% above the last close.


Keppel: Keppel O&M and Sembcorp Marine’s Revised Terms

<ul><li>Increasing number of real estate plays among director acquisitions Overall, institutions were net buyers of Singapore stocks for the five sessions ending Oct 6, with more than S$110 million of net inflows, following the S$200 million of net inflows for the preceding five sessions.</li><li>On Sep 28, Yanlord Land Group Independent Non-Executive Director Hong Pian Tee acquired 100,000 shares at 97.0 cents per share.</li></ul>

Increasing number of real estate plays among director acquisitions Overall, institutions were net buyers of Singapore stocks for the five sessions ending Oct 6, with more than S$110 million of net inflows, following the S$200 million of net inflows for the preceding five sessions.On Sep 28, Yanlord Land Group Independent Non-Executive Director Hong Pian Tee acquired 100,000 shares at 97.0 cents per share.

Increasing Number of Real Estate Plays Among Director Acquisitions 

<ul>
<li>
<a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1" rel="noopener">21Vianet Group (VNET US)</a> disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).</li>
<li>The data centre industry continues to be a hotbed for M&amp;A. <a href="https://www.bloomberg.com/news/articles/2022-07-27/mbk-partners-is-said-to-weigh-rival-bid-for-chinese-data-center-firm-vnet" target="_blank" rel="noopener">Bloomberg reported</a> on 27 July that MBK Partners is mulling an offer for VNET. </li>
<li>The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares</li>
</ul>



21Vianet Group (VNET US) disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).
The data centre industry continues to be a hotbed for M&amp;A. Bloomberg reported on 27 July that MBK Partners is mulling an offer for VNET. 
The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares


VNET’s Opportunistic US$8.20 Bid from the Founder

Singapore

Keppel DC REIT is Asia's first pure-play data centre REIT listed on the Singapore Exchange. Keppel DC REIT's investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets.

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Keppel DC REIT (KDCREIT SP)

REIT Watch - S-REITs rebound amidst less hawkish rates expectations

REIT Watch - S-Reits rebound amid less hawkish rates expectations The FTSE EPRA Nareit Developed Index gained close to 4 per cent last week while...

Singapore Exchange Ltd (SGX)

Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Keppel: Keppel O&M and Sembcorp Marine’s Revised Terms

Revised terms are an acceptable compromise for KEP shareholders - lower the overall value but result in a shorter deal completion, higher EPS...

Arun George

Increasing Number of Real Estate Plays Among Director Acquisitions

Increasing number of real estate plays among director acquisitions Overall, institutions were net buyers of Singapore stocks for the five sessions...

Singapore Exchange Ltd (SGX)

VNET’s Opportunistic US$8.20 Bid from the Founder

The offer is unattractive. Nevertheless, with the data centre M&A activity levels remaining elevated, the current mispricing of the shares will...

Arun George

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