SPH REIT will be the first to kick off the latest quarterly reporting season for S-REITs on 11-Jul with the release of its fiscal third quarter results ended 31 May 2019. Keppel REIT will announce its results next Monday, followed by Keppel DC REIT, CapitaLand Commercial Trust, Soilbuild Business Space REIT and First REIT in the same week.
To help S-REITs better compete against private capital and their foreign peers when making asset acquisitions, the MAS has indicated it is considering raising the current leverage limit of 45%. Currently, the 34 S-REITs average a debt-to-asset ratio of about 34%-35%. Based on indicative data extracted from their latest published financial statements and/or annual reports, these REITs may have the capacity to take on additional working capital of approximately S$8.3 billion and S$15.4 billion, if they boosted leverage ratios to 40% and 45% respectively. Among the 34 REITs, Parkway Life REIT has the lowest all-in debt cost.
Among the 11 SGX listed retail REITs, the 5 best performers in the 2019 YTD were: Lippo Malls Indonesia Retail Trust (+37.2%), Mapletree North Asia Commercial Trust (+32.0%), Sasseur REIT (+31.7%), Frasers Centrepoint Trust (+30.3%) and Fortune REIT (+26.2%).
1H19 total returns of the 30 most actively traded manufacturers were more consistent than recent years, with a median 21% total return, 24 gainers & six decliners, combined net institutional inflows of S$264 million; with Memtech, Jadason & Hi-P Int, the strongest performing of the 30. Manufacturers YZJ, Venture, Sing Tech Eng, AEM & Sembcorp Marine were also amidst Singapore’s 30 most active stocks by turnover for 1H19.
Among SGX’s 44 trusts, 4 are US-focused – Manulife US REIT and Keppel-KBS US REIT own, manage and operate office properties across various states, while ARA US Hospitality Trust and Eagle Hospitality Trust each manage a portfolio of hotels spanning key metropolitan areas in the world’s largest economy.
In June 2019, 25 primary-listed stocks on SGX repurchased close to 40 million shares with a total consideration of S$55 million. Buyback consideration was led by OCBC & DBS. 7 stocks commenced new buybacks in the month of June 2019: Boustead Singapore, Telechoice International, KSH Holdings, CDW Holding, Goodland Group, Global Palm Resources Holdings and Straco Corporation.
Singapore REITs was the top net buy sector in 6M2019, drawing net institutional inflows of S$396.3 million over the period. In June, S-REITs was the top net buy sector, attracting inflows of S$223.1 million, with CapitaLand Commercial Trust topping the net buy list. Among the 10 commercial REITs, six own Singapore office assets. In Jan-June 2019, the three best performers among the six were: Mapletree Commercial Trust (+29.9%), CapitaLand Commercial Trust (+26.9%) and Frasers Commercial Trust (+26.0%).
In May 2019, Communication Services was the top net buy sector on SGX, attracting institutional inflows of S$135.8 million. May’s net inflow also reversed total outflows of S$205.5 million from the sector over the first 4M of the year. Singtel was the top net buy stock in the month of May, garnering the highest institutional inflow of S$127.0 million.
SGX lists more than 20 transport-related stocks, which include companies that provide air, road, rail and sea transport, as well as businesses that supply ancillary services to transport providers. Among these, there are six pure-play transportation services stocks with a market cap of above S$200 million – Singapore Airlines, ComfortDelGro, Pan Ocean, SBS Transit, COSCO Shipping International, and PACC Offshore Services.
Singapore’s three most actively traded stocks that reside outside of the STI and represent the Maritime, O&G and Fuel Trading Sectors, are Sembcorp Marine, Rex International and China Aviation Oil Singapore. The three stocks averaged 16% total returns in the 2019 YTD. Whilst Rex International is a Catalist-listed stock that sits outside the top 300 Singapore stocks by market capitalisation, its daily turnover over the first 5M of 2019 placed the independent exploration and production oil company just outside the top 50 stocks by trading turnover.
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