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

Mapletree Pan Asia Commercial Trust / Equity Bottom-Up

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<html><body>Singapore's retail sales increased 8.7 per cent in March 2022 on a year-on-year basis, a reversal from the 3.5 per cent decrease in February 2022, according to the Singapore Department of Statistics (SingStat). 
Within the retail trade sector, most industries recorded year-on-year sales growth in March 2022. 
Listed on the SGX are 7 S-Reits which have significant exposure to Singapore-based retail assets. 
All seven S-Reits have announced their financial results or business updates this reporting season and they are: CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Lendlease Global Commercial Reit, Mapletree Commercial Trust, SPH Reit, Starhill Global Reit and Suntec Reit. 
CapitaLand Integrated Commercial Trust’s (CICT) net property income (NPI) from its retail assets grew 0.6 per cent year on year to S$101.8 million in Q1 2022. 
Its retail occupancy maintained at 96.6 per cent as at Mar 31, 2022 while tenant retention rate is 91 per cent in Q1 2022. 
Frasers Centrepoint Trust (FCT) reported that its retail portfolio occupancy improved from 97.2 per cent last quarter to 97.8 per cent. 
It noted that shopper traffic has improved to around 65 per cent of pre-Covid levels during the January to March 2022 period while tenants’ sales have maintained at above pre-Covid levels since Oct 2021. 
Lendlease Global Commercial Reit (LReit) noted that its retail portfolio saw strong occupancy rate, maintaining above 99 per cent, with a healthy tenant retention rate of 71.1 per cent 
The Reit completed its capital fundraising exercise to acquire 100 per cent of Jem mall in April 2022. LReit is also confident that 313@somerset will benefit from the re-opening trajectory in Singapore. 
Mapletree Commercial Trust (MCT) saw healthy performance at VivoCity mall, which had a 99.2 per cent committed occupancy as at Mar 31, 2022. 
It noted that, in tandem with easing Covid-19 measures, tenant sales kept a steady recovery momentum with fourth quarter FY21/22 tenant sales rebounding by 10.3 per cent on a year-on-year basis, reaching pre-Covid levels. 
SPH Reit’s Singapore retail assets maintained an occupancy rate of 99.1 per cent as at Feb 28, 2022 and noted that overall tenant sales for the Singapore assets increased 2 per cent year on year for H1 FY2022. 
Starhill Global Reit’s Singapore retail occupancy rates remained at 98.9 per cent as at Mar 31, 2022. Shopper traffic and tenant sales at Wisma Atria increased 11.7 per cent and 18.2 per cent year on year respectively during the quarter. 
Suntec Reit reported 13.9 per cent year-on-year growth in Q1 2022 gross revenue, partly contributed by higher income from Suntec City Office and Suntec City Mall. 
The Reit believes that the easing of Covid-19 pandemic restrictions and the reopening of the economy will boost the recovery of footfall as well as tenant sales and that mall occupancy will likely remain stable at above 95 per cent. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/tenant-sales-back-at-pre-covid-levels-for-retail-s-reits"> read </a>the original version.</body></html>


      
    
    SREIT

Singapore's retail sales increased 8.7 per cent in March 2022 on a year-on-year basis, a reversal from the 3.5 per cent decrease in February 2022, according to the Singapore Department of Statistics (SingStat).  
Within the retail trade sector, most industries recorded year-on-year sales growth in March 2022.  
Listed on the SGX are 7 S-Reits which have significant exposure to Singapore-based retail assets.  
All seven S-Reits have announced their financial results or business updates this reporting season and they are: CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Lendlease Global Commercial Reit, Mapletree Commercial Trust, SPH Reit, Starhill Global Reit and Suntec Reit.  
CapitaLand Integrated Commercial Trust’s (CICT) net property income (NPI) from its retail assets grew 0.6 per cent year on year to S$101.8 million in Q1 2022.  
Its retail occupancy maintained at 96.6 per cent as at Mar 31, 2022 while tenant retention rate is 91 per cent in Q1 2022.  
Frasers Centrepoint Trust (FCT) reported that its retail portfolio occupancy improved from 97.2 per cent last quarter to 97.8 per cent.  
It noted that shopper traffic has improved to around 65 per cent of pre-Covid levels during the January to March 2022 period while tenants’ sales have maintained at above pre-Covid levels since Oct 2021.  
Lendlease Global Commercial Reit (LReit) noted that its retail portfolio saw strong occupancy rate, maintaining above 99 per cent, with a healthy tenant retention rate of 71.1 per cent  
The Reit completed its capital fundraising exercise to acquire 100 per cent of Jem mall in April 2022. LReit is also confident that 313@somerset will benefit from the re-opening trajectory in Singapore.  
Mapletree Commercial Trust (MCT) saw healthy performance at VivoCity mall, which had a 99.2 per cent committed occupancy as at Mar 31, 2022.  
It noted that, in tandem with easing Covid-19 measures, tenant sales kept a steady recovery momentum with fourth quarter FY21/22 tenant sales rebounding by 10.3 per cent on a year-on-year basis, reaching pre-Covid levels.  
SPH Reit’s Singapore retail assets maintained an occupancy rate of 99.1 per cent as at Feb 28, 2022 and noted that overall tenant sales for the Singapore assets increased 2 per cent year on year for H1 FY2022.  
Starhill Global Reit’s Singapore retail occupancy rates remained at 98.9 per cent as at Mar 31, 2022. Shopper traffic and tenant sales at Wisma Atria increased 11.7 per cent and 18.2 per cent year on year respectively during the quarter.  
Suntec Reit reported 13.9 per cent year-on-year growth in Q1 2022 gross revenue, partly contributed by higher income from Suntec City Office and Suntec City Mall.  
The Reit believes that the easing of Covid-19 pandemic restrictions and the reopening of the economy will boost the recovery of footfall as well as tenant sales and that mall occupancy will likely remain stable at above 95 per cent.  REIT Watch is a weekly column on The Business Times, read the original version.


REIT Watch - Tenant sales back at pre-Covid levels for Retail S-Reits

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.

Event-Driven

Mapletree North Asia Commercial Trust / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106:1" rel="noopener">Mapletree Commercial Trust (MCT SP)</a>’s EGM, <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127:1" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a>/MNACT’s EGM and trust scheme meeting will take place on 23 May. The effective date is 8 August.</li>
<li>The IFA considers the scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement. </li>
<li>For a 17 August payment, the gross and annualised spread of the cash-only consideration (including permitted clean-up DPU) is 1.6% and 5.6%, respectively. </li>
</ul>



Mapletree Commercial Trust (MCT SP)’s EGM, Mapletree North Asia Commercial Trust (MAGIC SP)/MNACT’s EGM and trust scheme meeting will take place on 23 May. The effective date is 8 August.
The IFA considers the scheme consideration to be fair. We think that IFA’s valuation approach is broadly sound with some areas for improvement. 
For a 17 August payment, the gross and annualised spread of the cash-only consideration (including permitted clean-up DPU) is 1.6% and 5.6%, respectively. 


MNACT's Scheme Meeting on 23 May, IFA Opinion

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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li><a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> 3Q22 Business Updates – Occupancy holding up strong; AEI works at Wisma Completed</li><li><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> 4Q22 DPU +5.0% YoY; Healthy reversions and higher DPU and NAV due to acquisitions</li><li><a href="https://www.smartkarma.com/entities/cdl-hospitality-trusts" target="_blank" data-smartkarma-citation="entities:936" rel="noopener">CDL Hospitality Trusts (CDREIT SP)</a> 1Q22 Business Updates – Recovery story intact with SG portfolio leading the way</li></ul>

Starhill Global REIT (SGREIT SP) 3Q22 Business Updates – Occupancy holding up strong; AEI works at Wisma CompletedMapletree Logistics Trust (MLT SP) 4Q22 DPU +5.0% YoY; Healthy reversions and higher DPU and NAV due to acquisitionsCDL Hospitality Trusts (CDREIT SP) 1Q22 Business Updates – Recovery story intact with SG portfolio leading the way

ASEAN Builder's Scoop (29Apr22) - SGREIT Robust Occupancy

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>There has been a lot of positive talk about Singapore's reopening but also an equal number of skeptics. </li>
<li>Companies covered are <a href="https://www.smartkarma.com/entities/sats-ltd" target="_blank" data-smartkarma-citation="entities:19962:1" rel="noopener">SATS (SATS SP)</a> , <a href="https://www.smartkarma.com/entities/singapore-airlines-ltd" target="_blank" data-smartkarma-citation="entities:74:1" rel="noopener">Singapore Airlines (SIA SP)</a> , <a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a>, and retail REITs in Singapore. </li>
<li>There is some removal of regulations that support the reopening theme such as testing removal upon landing in SG, PET efficiency for the nightlife scene,  and reduction of safe-distancing ambassadors. </li>
</ul>


There has been a lot of positive talk about Singapore's reopening but also an equal number of skeptics. 
Companies covered are SATS (SATS SP) , Singapore Airlines (SIA SP) , Comfortdelgro Corp (CD SP), and retail REITs in Singapore. 
There is some removal of regulations that support the reopening theme such as testing removal upon landing in SG, PET efficiency for the nightlife scene,  and reduction of safe-distancing ambassadors. 


Far East Hospitality Trust / Equity Bottom-Up

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Singapore announced the easing of Covid-19 measures on March 24 as the country takes a "decisive but measured step forward" towards living with Covid-19.

With the risk of outdoor transmission significantly lower, it will soon be optional to wear masks outdoors in Singapore while the maximum group size for social gatherings as well as dining in will double from 5 to 10. Certain large-scale social gatherings are also permitted to resume.

Office spaces are expected to be filled up again, as up to 75 per cent of those who can work from home are now allowed to return to their workplaces, up from 50 per cent previously. 
Cross-border travel is also expected to ease substantially from Apr 1, as travellers no longer have to take designated vaccinated travel lanes (VTL) to enter Singapore quarantine-free. 
Such moves will help to "reconnect Singapore with the world" and "give a much-needed boost to businesses, particularly the tourism sector, and help Singapore reclaim its position as a business and aviation hub" said Prime Minister Lee Hsien Loong during his speech. 
Following the announcement, the Straits Times Index (STI) gained 1.1 per cent during Thursday's (Mar 24) trading session, driven by a rally in aviation, transport, tourism and retail-related stocks. 
Similarly, S-Reits recorded gains, with the iEdge S-Reit Index increasing 1 per cent in the trading session, led by trusts with significant exposure to Singapore related retail, hospitality, and office assets.

Hospitality S-Reits gained 3.5 per cent while retail S-Reits gained 1.5 per cent. More notably, hospitality and retail S-Reits saw a surge in trading activities on Thursday with S$27.4 million and S$21.4 million in traded value respectively.

This represents over 211 per cent and 58 per cent increases respectively, against their 3-month average daily traded value. 
Diversified S-REITs also gained an average of 1.8 per cent over Thursday, led by trusts (Lendlease Global Commercial REIT, OUE Commercial REIT and Suntec REIT) with substantial exposure to the retail and office segments in Singapore. 
Lendlease Global Commercial Reit (LReit), which owns prime retail properties in Singapore and grade-A office buildings in Milan, was the top performer for the day with over 7 per cent gains. 
In February, LReit proposed to acquire the remaining interest in JEM mall for close to S$2 billion. 
LReit expects the acquisition to further boost the Reit's portfolio income diversification and provide approximately 10.5 per cent distribution per unit (DPU) accretion upon completion. 
Post-acquisition, LReit's exposure to the resilient suburban retail sector is expected to increase from 16.3 per cent to 46.8 per cent and its Singapore-centric asset base to be close to 88 per cent of its total portfolio value. 
CDL Hospitality Trusts (CDLHT), which owns hotel properties across Asia Pacific and Europe, rose 6 per cent over the trading day following the announcement of easing travel restrictions. 
CDLHT's Singapore portfolio (approximately 64.9 per cent by total portfolio valuation) continued to be impacted by the absence of major meetings, incentives, conferences, and exhibitions (MICE) events, large wedding banquets and social functions in FY 2021.

The trust remains optimistic in Singapore's commitment to reopening and returning to normalcy. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a><a href="https://www.businesstimes.com.sg/companies-markets/retail-hotel-office-s-reits-gain-with-relaxed-covid-rules-0">read</a><a href="https://www.businesstimes.com.sg/companies-markets/pure-play-china-s-reits-record-strong-2021-growth-0"> </a>the original version.
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    Top 10 performing SREITs


Singapore announced the easing of Covid-19 measures on March 24 as the country takes a "decisive but measured step forward" towards living with Covid-19.

With the risk of outdoor transmission significantly lower, it will soon be optional to wear masks outdoors in Singapore while the maximum group size for social gatherings as well as dining in will double from 5 to 10. Certain large-scale social gatherings are also permitted to resume.

Office spaces are expected to be filled up again, as up to 75 per cent of those who can work from home are now allowed to return to their workplaces, up from 50 per cent previously.  
Cross-border travel is also expected to ease substantially from Apr 1, as travellers no longer have to take designated vaccinated travel lanes (VTL) to enter Singapore quarantine-free.  
Such moves will help to "reconnect Singapore with the world" and "give a much-needed boost to businesses, particularly the tourism sector, and help Singapore reclaim its position as a business and aviation hub" said Prime Minister Lee Hsien Loong during his speech.  
Following the announcement, the Straits Times Index (STI) gained 1.1 per cent during Thursday's (Mar 24) trading session, driven by a rally in aviation, transport, tourism and retail-related stocks.  
Similarly, S-Reits recorded gains, with the iEdge S-Reit Index increasing 1 per cent in the trading session, led by trusts with significant exposure to Singapore related retail, hospitality, and office assets.

Hospitality S-Reits gained 3.5 per cent while retail S-Reits gained 1.5 per cent. More notably, hospitality and retail S-Reits saw a surge in trading activities on Thursday with S$27.4 million and S$21.4 million in traded value respectively.

This represents over 211 per cent and 58 per cent increases respectively, against their 3-month average daily traded value.  
Diversified S-REITs also gained an average of 1.8 per cent over Thursday, led by trusts (Lendlease Global Commercial REIT, OUE Commercial REIT and Suntec REIT) with substantial exposure to the retail and office segments in Singapore.  
Lendlease Global Commercial Reit (LReit), which owns prime retail properties in Singapore and grade-A office buildings in Milan, was the top performer for the day with over 7 per cent gains.  
In February, LReit proposed to acquire the remaining interest in JEM mall for close to S$2 billion.  
LReit expects the acquisition to further boost the Reit's portfolio income diversification and provide approximately 10.5 per cent distribution per unit (DPU) accretion upon completion.  
Post-acquisition, LReit's exposure to the resilient suburban retail sector is expected to increase from 16.3 per cent to 46.8 per cent and its Singapore-centric asset base to be close to 88 per cent of its total portfolio value.  
CDL Hospitality Trusts (CDLHT), which owns hotel properties across Asia Pacific and Europe, rose 6 per cent over the trading day following the announcement of easing travel restrictions.  
CDLHT's Singapore portfolio (approximately 64.9 per cent by total portfolio valuation) continued to be impacted by the absence of major meetings, incentives, conferences, and exhibitions (MICE) events, large wedding banquets and social functions in FY 2021.

The trust remains optimistic in Singapore's commitment to reopening and returning to normalcy.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Retail, hotel, office S-Reits gain with relaxed Covid rules

Singapore

Starhill Global REIT is a real estate investment trust.  The trust invests in retail and office buildings in Singapore and overseas.

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Starhill Global REIT (SGREIT SP)

REIT Watch - Tenant sales back at pre-Covid levels for Retail S-Reits

Singapore's retail sales increased 8.7 per cent in March 2022 on a year-on-year basis, a reversal from the 3.5 per cent decrease...

Singapore Exchange Ltd (SGX)

MNACT's Scheme Meeting on 23 May, IFA Opinion

The IFA considers the scheme consideration to be fair. For a 17 August payment, the annualised spread of the cash-only consideration (including...

Arun George

ASEAN Builder's Scoop (29Apr22) - SGREIT Robust Occupancy

MLT boosted by acquisitions; CDREIT SG portfolio leading the way; ART lacklustre in SG, CN; FHT improvements across mrkts; ELITE 7.5+% GBP yield;...

SCCM Asia Research

Singapore Travel: Back to Live!

The reopening in Singapore is real and nearer to the pre-COVID-19 condition or back to normalcy. Tourism-related names such as SATS, SIA,...

Henry Soediarko

REIT Watch - Retail, hotel, office S-Reits gain with relaxed Covid rules

Singapore announced the easing of Covid-19 measures on March 24 as the country takes a "decisive but measured step forward"...

Singapore Exchange Ltd (SGX)

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