In this briefing:
- Keppel Infrastructure Trust Placement – Scaled Down but Large Deal; Very Well Flagged Deal
- UOB – Driving Bad Loans
- Best World (BEST SP): BT Article, Franchise and KOL
1. Keppel Infrastructure Trust Placement – Scaled Down but Large Deal; Very Well Flagged Deal
Keppel Infrastructure Trust (KIT SP) plans to raise US$450m via an equity placement and non-renounacable preferential offering. Its sponsor, Keppel Corp Ltd (KEP SP) will subscribe in the placement and the preferential offering to maintain its 18.2% stake.
KIT announced the acquisition of IXOM in Nov 2018 and has been talking about the need to issue equity ever since. Its earlier presentations seem to indicate a preference for raising a large sum via an equity issuance. Furthermore, despite the smaller raise the accretion to DPU is probably only marginal.
2. UOB – Driving Bad Loans
It’s easy to miss. Headline bad loans are down. But United Overseas Bank (UOB SP) saw a surge in newly defaulted loans during 2H18 compared with 1H18. The bank’s Pillar 3 disclosure reveals this all too clearly, and it goes to true underlying credit metrics. Write-offs flatter figures or loan reschedulings, and high figures here can lead one to believe that companies and consumers are finding it easier to service their loans. This though may not be true. And it may be one of the most important considerations when analyzing any bank.
3. Best World (BEST SP): BT Article, Franchise and KOL
Best World International (BEST SP) share price has been hammered due to the recent article in Business Times, although the company has addressed them one by one. The annual meeting that recently took place in their office in Singapore shed some light on the seemingly “new but not so new” franchise business model in China. The company also has started to engage Key Opinion Leaders (KOL) aka social media influencers as part of their social selling campaign.
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