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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In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust. 
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions. 
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/s-reits-recent-acquisitions-further-entrench-diversity">read </a>the original version.
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    Recent SREIT


In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust.  
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions.  
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits' recent acquisitions further entrench diversity

Bond market data and technology, BondEvalue

BondEvalue

Bond market data and technology

BondEvalue is a Singapore-based Fintech that specializes in bond market data and technology. The company's information services business offers bond market data on hard-currency corporate & sovereign bonds across Asia, Middle East, Europe and the Americas. The data, which includes bond prices, yields, news and analytics, is offered to end investors via interactive Mobile and Web Apps. Investors can sign up for a free trial of the service either via the company's website (https://bondevalue.com) or by downloading the BondEvalue Mobile App (http://onelink.to/wej7jq). BondEvalue is also developing an electronic bond exchange, BondbloX in Singapore that allows investors to trade bonds electronically in smaller sizes (US$1,000 or equivalent). For more information, visit https://www.bondblox.com/

Bond Market Data and Technology

Credit

US markets ended the day mixed with the S&amp;P down 0.2% and Nasdaq up 0.1%. Materials and Industrials, down 1.2% and 0.7% dragged the index while Utlities, Consumer Discretionary and Healthcare, were up 0.8%, 0.3% and 0.2% providing support. HSBC’s Q2 profit topped forecasts (details below). General Motors and Alibaba will be reporting earnings later this week. The CAC, FTSE and DAX were up 1%, 0.7% and 0.2%. Saudi TASI and UAE’s ADX were up 0.8% and 0.2% respectively. Brazil’s Bovespa gained 0.6%. Asia Pacific stocks opened in the red – HSI, Nikkei, Singapore’s STI and Shanghai were down 0.8%, 0.6%, 0.4% and 0.1%. US 10Y yields dipped to 4bp to 1.19%.

Ping An, Kasikornbank, Mapletree Launch Bonds; Macro; Rating Changes; New Issues; Talking Heads; ...

Yoma Strategic Holdings / Equity Bottom-Up

Key Singapore Market Moves and Flows in July

Mapletree Industrial Trust / Equity Bottom-Up

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 <div class='content-caption'>SREITs leaders index</div>
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In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge S-Reit index, widely regarded as one of S-Reits' barometers, and a narrower subset of it, the iEdge S-Reit Leaders Index.

The iEdge S-Reit Leaders Index is a narrow, tradable, adjusted free-float market capitalisation weighted index that measures the performance of the most liquid trusts in Singapore. Constituents must be listed on SGX and classified under Reits as defined by the Factset Revere Business Industry Classification System. The trust must also have free float of at least 20 per cent and a free float market capitalisation of at least S$500 million.

All eligible trusts are screened for liquidity at the semi-annual rebalancing in March and September. To enter the iEdge S-Reit Leaders Index, eligible trusts must trade at least US$500,000 in daily turnover and a 0.10 per cent daily trading velocity of the free float market capitalisation.

To maintain an existing place, constituents must maintain US$400,000 in daily turnover and a 0.08 per cent daily trading velocity of the free float market capitalisation. 
Following Lendlease Global Commercial REIT’s (LREIT) addition in March 2021, there are currently 27 constituents in the iEdge S-REIT Leaders Index. 
LReit has a diversified portfolio comprising of a leasehold interest in, 313@somerset, a prime retail property located in Singapore and a freehold interest in Sky Complex, which comprises three grade-A office buildings located in Milan.

In October 2020, LReit acquired a 5.0 per cent stake in Lendlease Asian Retail Investment Fund 3, which indirectly holds a 75.0 per cent interest in Jem, an integrated office and retail development in Singapore.

Comparing total returns, the iEdge S-Reit Leaders Index (-0.9 per cent), proved to be more resilient than the broader iEdge S-Reit Index (-2.6 per cent) and the FTSE EPRA/Nareit Global Reits Index (-12.0 per cent) last year.

Though the iEdge S-Reit Leaders Index (+4.0 per cent) lagged the global benchmark (+25.1 per cent) in 2021 year-to-date, it outperformed in the long term. The five-year total returns of the iEdge S-Reit Leaders Index came in at 60.6 per cent versus FTSE EPRA/Nareit Global Reit Index's 28.2 per cent. This was mostly led by S-Reits with data centre, industrial, and healthcare assets. 
The constituents with the highest five-year total returns include: Keppel DC REIT (+175.6 per cent), Mapletree Logistics Trust (+168.0 per cent), ParkwayLife REIT (+133.2 per cent), Mapletree Industrial Trust (+123.9 per cent) and Frasers Logistics and Commercial Trust (+113.8 per cent). Together, the five trusts make up approximately 36 per cent of the overall index weightage.

Products tracking the iEdge S-Reit Leaders Index include the SGX iEdge S-Reit Leaders Index Futures and the Syfe Reit+ portfolio. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/iedge-s-reit-indices-barometers-for-s-reits">read </a>the original version.
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    SREITs leaders index


In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge S-Reit index, widely regarded as one of S-Reits' barometers, and a narrower subset of it, the iEdge S-Reit Leaders Index.

The iEdge S-Reit Leaders Index is a narrow, tradable, adjusted free-float market capitalisation weighted index that measures the performance of the most liquid trusts in Singapore. Constituents must be listed on SGX and classified under Reits as defined by the Factset Revere Business Industry Classification System. The trust must also have free float of at least 20 per cent and a free float market capitalisation of at least S$500 million.

All eligible trusts are screened for liquidity at the semi-annual rebalancing in March and September. To enter the iEdge S-Reit Leaders Index, eligible trusts must trade at least US$500,000 in daily turnover and a 0.10 per cent daily trading velocity of the free float market capitalisation.

To maintain an existing place, constituents must maintain US$400,000 in daily turnover and a 0.08 per cent daily trading velocity of the free float market capitalisation.  
Following Lendlease Global Commercial REIT’s (LREIT) addition in March 2021, there are currently 27 constituents in the iEdge S-REIT Leaders Index.  
LReit has a diversified portfolio comprising of a leasehold interest in, 313@somerset, a prime retail property located in Singapore and a freehold interest in Sky Complex, which comprises three grade-A office buildings located in Milan.

In October 2020, LReit acquired a 5.0 per cent stake in Lendlease Asian Retail Investment Fund 3, which indirectly holds a 75.0 per cent interest in Jem, an integrated office and retail development in Singapore.

Comparing total returns, the iEdge S-Reit Leaders Index (-0.9 per cent), proved to be more resilient than the broader iEdge S-Reit Index (-2.6 per cent) and the FTSE EPRA/Nareit Global Reits Index (-12.0 per cent) last year.

Though the iEdge S-Reit Leaders Index (+4.0 per cent) lagged the global benchmark (+25.1 per cent) in 2021 year-to-date, it outperformed in the long term. The five-year total returns of the iEdge S-Reit Leaders Index came in at 60.6 per cent versus FTSE EPRA/Nareit Global Reit Index's 28.2 per cent. This was mostly led by S-Reits with data centre, industrial, and healthcare assets.  
The constituents with the highest five-year total returns include: Keppel DC REIT (+175.6 per cent), Mapletree Logistics Trust (+168.0 per cent), ParkwayLife REIT (+133.2 per cent), Mapletree Industrial Trust (+123.9 per cent) and Frasers Logistics and Commercial Trust (+113.8 per cent). Together, the five trusts make up approximately 36 per cent of the overall index weightage.

Products tracking the iEdge S-Reit Leaders Index include the SGX iEdge S-Reit Leaders Index Futures and the Syfe Reit+ portfolio.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - iEdge S-Reit Indices: barometers for S-Reits

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 363.047px;"> </td><td style="width: 362.953px;">MLT</td></tr><tr><td style="width: 363.047px;">Period</td><td style="width: 362.953px;">1Q22</td></tr><tr><td style="width: 363.047px;">Gross Revenue (S$ m)</td><td style="width: 362.953px;">163.7 (+23.7% YoY)</td></tr><tr><td style="width: 363.047px;">NPI (S$ m)</td><td style="width: 362.953px;">144.2 (+21.3% YoY)</td></tr><tr><td style="width: 363.047px;">DPU (S$ c)</td><td style="width: 362.953px;">2.161 (+5.7% YoY)</td></tr><tr><td style="width: 363.047px;">NAV per Unit (S$)</td><td style="width: 362.953px;">1.32</td></tr><tr><td style="width: 363.047px;">P/B (x)</td><td style="width: 362.953px;">1.59</td></tr><tr><td style="width: 363.047px;">Occupancy (%)</td><td style="width: 362.953px;">97.8</td></tr><tr><td style="width: 363.047px;">Reversion (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">Gearing (%)</td><td style="width: 362.953px;">38.2</td></tr><tr><td style="width: 363.047px;">Cost of Debt (%)</td><td style="width: 362.953px;">2.2</td></tr><tr><td style="width: 363.047px;">1 Yr Fwd Yield (%)</td><td style="width: 362.953px;">4.14</td></tr><tr><td style="width: 363.047px;">Debt Hedged (%)</td><td style="width: 362.953px;">75%</td></tr><tr><td style="width: 363.047px;">Target Price</td><td style="width: 362.953px;">NA</td></tr><tr><td style="width: 363.047px;">Rating</td><td style="width: 362.953px;">NA</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) MLTPeriod1Q22Gross Revenue (S$ m)163.7 (+23.7% YoY)NPI (S$ m)144.2 (+21.3% YoY)DPU (S$ c)2.161 (+5.7% YoY)NAV per Unit (S$)1.32P/B (x)1.59Occupancy (%)97.8Reversion (%)2.2Gearing (%)38.2Cost of Debt (%)2.21 Yr Fwd Yield (%)4.14Debt Hedged (%)75%Target PriceNARatingNA

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

Singapore

Mapletree Logistics Trust is an Asia-focused logistics real estate investment trust. The Company invests in a diversified portfolio of income-producing real estate which is used for logistics purposes.

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Mapletree Logistics Trust (MLT SP)

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In Singapore, the suite of iEdge S-Reit Indices measures the performance of Reits listed on SGX. The suite comprises the iEdge...

Singapore Exchange Ltd (SGX)

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SCCM Asia Research

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