Smart Look At The Week Ahead: Singapore REITs On Show

2020-07-08     thesmartinvestor
Smart Look At The Week Ahead: Singapore REITs On Show

The Singapore earnings season slips into second gear next week with six Straits Times Index (SGX: ^STI) set to report quarterly numbers. Four of those companies are REITs.

In October, Mapletree Logistics Trust (SGX: M44U) posted a 3% rise in second-quarter distribution per unit on higher gross revenue at its Hong Kong properties. The REIT has also raised $250 million through a private placement to buy two properties in Vietnam and four in China.

CapitaLand Commercial Trust (SGX: C61U) only managed to tread water in the third quarter. Higher rental revenue at Asia Square Tower 2 and Gallileo was offset by increased operating expenses at Six Battery Road.

But stronger contribution from VivoCity and Mapletree Business City boosted performance at Mapletree Commercial Trust (SGX: N2IU). The REIT has also strengthened its foothold in the Alexandra precinct with the acquisition of Mapletree Business City (Phase 2).

Performance was even better at CapitaLand Mall Trust (SGX: C38U), thanks to the re-opening of Funan and consolidation at Westgate. However, Lot One Shoppers’ Mall was a drag due to renovation works.

Keppel Corporation (SGX: BN4) posted a 60% jump in third-quarter revenue. But it was not enough to offset the absence of gains from en bloc sales in China and Vietnam a year ago. Consequently, profit fell by nearly a-third.

Can Singapore Exchange (SGX: S68) possibly improve on its first-quarter report card? In October, SGX posted a 25% jump in quarterly profits on higher demand for its suite of investment and risk-management tools. It was the best quarterly performance for a decade.

On the economic front, America will be remembering Martin Luther King Jr day on Monday. So, markets will be closed.

China will announce its latest benchmark lending rate, the loan prime rate (LPR) ahead of a quiet period for the country as activity slows for Chinese New Year celebrations. The LPR is expected to be cut from 4.15% to 4.05% to address China’s slowing economy.

The European Central Bank will also announce its latest interest rate decision. It is expected to keep its key rate unchanged at 0%. Meanwhile, the Bank of Japan could keep interest rates unchanged at -0.1%. But Bank Negara Malaysia could cut its overnight policy rate from 3% to 2.75%.

And finally, Singapore’s inflation rate could have been largely unchanged in December. Core inflation could have inched up from 0.6% to 0.7%, whilst the headline rate could have crept lower from 0.6% to 0.5%.

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Disclosure: David Kuo owns shares in CCT, CMT, MCT and SGX.

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