SGX Market Updates

Manulife US REIT & Prime US REIT Led Singapore’s USD Stocks in Early 2020


PUBLISHED ON |

18 February 2020

  • The US Dollar Index has returned to Oct 2019 highs, with a 2.9% gain in the 2020 YTD, and the USD/SGD appreciating 3.4%. The US is expected to be the strongest growing G7 economy in 2020, while the Fed is expected to keep rates on hold in 1H20. 

  • Singapore’s 10 most traded USD denominated stocks have contributed 5% to daily stock market turnover in early 2020, while averaging 4.1% returns. By comparison, the median return of the 5,000 largest capitalised stocks in the US have averaged 4.3% returns.

  • Singapore’s strongest performing USD stocks in the 2020 YTD were Prime US REIT and Manulife US REIT. Manulife US REIT reported its FY19 NPI grew 22% y-o-y, whilst Prime US REIT raised US$120 million in a 4.8x subscribed private placement to fund its maiden acquisition.




The US Dollar Index has returned to Oct 2019 highs, with a 2.9% gain in the 2020 year-to-date, moving from 96.39 at the end of 2019, to 99.19 going into the Asia market open on 18 February. At the same time, the USD/SGD has appreciated 3.4% since the end of 2019.

The US is expected to be the strongest growing G7 economy in 2020, while the US Federal Reserve is expected to keep rates on hold in 1H20. The theme of a strong US consumer economy, and an immediate hold by the Federal Reserve on low interest rates to accommodate trade-related growth (and now facilitate 2% inflation) has continued into 2020. Federal Reserve Chair Jerome Powell testified noted last week that while fundamental household spending remained solid in the US, business investment and exports were weak, largely reflecting sluggish growth abroad and trade developments.



Singapore’s Most Traded USD Stocks in-line with US-listed Peers in 2020 YTD

Singapore’s 10 most traded USD denominated stocks have contributed 5% to daily stock market turnover in early 2020, while averaging 4.1% total returns. The 10 stocks include as many as 4 STI stocks – Jardine Matheson, Jardine Strategic, HongkongLand, and Dairy Farm International. The 10 USD stocks, ranked by highest turnover in the 2020 year-to-date are tabled below.

Stock SGX
Code
Mkt Cap
S$M
2020 Average
Daily Turnover
S$M
Net Insti Flow
2020 YTD
S$M
2018
Total
Return (S$)
%
2019
Total
Return (S$)
%
2020 YTD
Total
Return (S$) %
JARDINE MATHESON HLDGS   J36 59,474 17.4 6 20 -19 8
HONGKONG LAND HOLDINGS   H78 17,881 15.2 -3 -6 -7 -2
JARDINE STRATEGIC HLDGS   J37 48,729 11.6 4 -5 -17 7
MANULIFE US REIT BTOU 2,288 7.4 9 -7 40 10
DAIRY FARM INTL HLDGS   D01 10,093 6.4 -7 20 -36 -3
KEPPEL PACIFIC OAK US REIT CMOU 1,034 2.7 -2 -24 39 7
EAGLE HOSPITALITY TRUST LIW 641 1.7 -6 N/A -33 1
PRIME US REIT OXMU 1,375 1.4 2 N/A 10 15
HUTCHISON PORT HOLDINGS TRUST NS8U 1,900 1.1 3 -35 -25 -2
ARA US HOSPITALITY TRUST XZL 674 0.5 7 N/A -1 2
Average     -5 -5 4

Source: SGX StockFacts, Bloomberg  Thomson Reuters (Data as of 17 February 2020). Other stocks traded in USD (in order of highest turner in 2020 YTD) include Tianjin Zhongxin Pharmaceutical Group, Mandarin Oriental, Elec & Eltek Int Co.



By comparison, the 5,000 largest stocks by market value listed in the United States have generated a median 4.3% total return in the 2020 year to date. More than half of these stocks maintain a market value that is within the range of Singapore’s 10 most actively traded USD stocks. These US-listed peers by market value have generated a median 4.7% total return in SGD terms in the 2020 year-to-date. 

The moves of the US Dollar are just one of many drivers that can impact the above 10 stocks. These 10 stocks represent different Sectors and operate across different countries. Between the end of 2017 and 2019, the US Dollar Index appreciated 4.6%, with a marginal gain of 0.7% for the USD/SGD rate.

Half of the 10 stocks tabled above, have recently reported their earnings.

  • On 21 Jan, Keppel Pacific Oak US REIT reported its gross revenue and net property income for FY19 (ending 31 Dec) grew 31.4% to US$122.9 million and 31.8% to US$74.8 million respectively, driven mainly by positive rental reversion of 14.3% for the whole portfolio. Click here for more.

  • On 5 Feb, Manulife US REIT reported its gross revenue and net property income for FY19 (ending 31 Dec) grew 23.0% to US$177.9 million and 22.2% to US$110.8 million respectively, largely due to contributions from Centerpointe and Capitol that were acquired in FY19, and first full-year contributions for FY19 from Penn and Phipps that were acquired in FY18. Click here for more.

  • On 10 Feb, Hutchison Port Holdings reported FY19 (ending 31 Dec) revenue declined 3.1% to HK$11.1 billion with total operating profit at HK$3.4 billion 3.4% below last year. In the accompanying presentation, the Manager of the trust noted that the overall trend in outbound cargoes to the US was weak in 2019 and declined by 9% when compared to 2018. The drop was enlarged to 19% in 4Q19 due to a high base volume in 4Q18 caused by the frontloading of US cargoes prior to the expected tariffs hike in 2019. On the other hand, outbound cargoes to the EU was above FY18 by 4%. Click here for more.

  • On 12 Feb, Prime US REIT reported gross revenue and net property income for its FY19 [19 July 2019 listing date to 31 Dec 2019] outperformed forecasts by 2.2% and 2.9% to US$60.7 million and US$40.2 million respectively. The outperformance of IPO forecasts was driven by higher rental income and recoveries income. Click here for more. Prime US REIT has also subsequently raised US$120 million in a 4.8x subscribed private placement intended to fund Prime US REIT’s maiden acquisition of Park Tower in Sacramento, California for a purchase price of US$165.5 million. Click here for more details.

  • On 17 Feb, Eagle Hospitality Trust reported for its FY19 [24 May 2019 Listing Date to 31 Dec 2019] revenue at US$51.6 million was 10.1% below forecast and net property income at US$42.9 million was 7.0% below forecast. The forecasts were derived from the seasonal forecast for 2Q19, based on the Forecast Period 2019 as disclosed in the Eagle Hospitality Trust Prospectus. Click here for more.

ARA US Hospitality Trust will announce its FY19 earnings on prior to tomorrow’s market open (19 Feb). The relevant four Jardine companies will report FY19 results on 5 March.







This article is provided by SGX My Gateway.



SGX My Gateway

SGX's investor education portal with market, product and investment information and events. Sign up now at sgx.com/mygateway to receive our investment updates and economic calendar.

This document is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Singapore Exchange Limited (“SGX”) to any registration or licensing requirement. This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document is for general circulation only. It does not address the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Use of and/or reliance on this document is entirely at the reader’s own risk. Further information on this investment product may be obtained from www.sgx.com. Investment products are subject to significant investment risks, including the possible loss of the principal amount invested. Past performance of investment products is not indicative of their future performance. Examples provided are for illustrative purposes only. While each of SGX and its affiliates (collectively, the SGX Group Companies) have taken reasonable care to ensure the accuracy and completeness of the information provided, each of the SGX Group Companies disclaims any and all guarantees, representations and warranties, expressed or implied, in relation to this document and shall not be responsible or liable (whether under contract, tort (including negligence) or otherwise) for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind, including without limitation loss of profit, loss of reputation and loss of opportunity) suffered or incurred by any person due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information, or arising from and/or in connection with this document. The information in this document may have been obtained via third party sources and which have not been independently verified by any SGX Group Company. No SGX Group Company endorses or shall be liable for the content of information provided by third parties. The SGX Group Companies may deal in investment products in the usual course of their business, and may be on the opposite side of any trades. SGX is an exempt financial adviser under the Financial Advisers Act (Cap. 110) of Singapore. The information in this document is subject to change without notice. This document shall not be reproduced, republished, uploaded, linked, posted, transmitted, adapted, copied, translated, modified, edited or otherwise displayed or distributed in any manner without SGX’s prior written consent.












Stock / REIT Search

Advertisement

Advertisement