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Monday, April 16, 2007
Wednesday, May 31, 2006
REIT Yield - Merrill Lynch
Extracts fm ML Report dated 30-May-06 (click on the tables for a bigger picture),
Share price performance
The Singapore REIT sector has experienced average share price declines of -5% over the past month which is better than Singapore developers -10% and the Straits Times Index at -7%. The best performing REIT has been Ascott Residential Trust (ACTRF,– – –,1.14) and the worst has been Mapletree Logistics Trust (XHWAF,B-1-7,S$0.92).
Stable interest rate outlook
10 year government bond yields appear to have stabilized in both the US (circa 5.0%) and Singapore (3.50%) with the yield around 1.50% which compares to the five year historical average of 1.18%. We maintain our view that 10 year bond yields are peaking and that the US 10 year bond yield should decline in 2007.
Undemanding yield gaps
The Singapore REIT sector has an average FY06E DPU yield of 5.3% which compares with the Singapore government 10 year bond yield (risk free rate) of 3.50%. The yield gap of 1.80% is undemanding when viewed globally where REITs have traditionally traded at between 1.0% and 2.0% above their respective risk free benchmarks.
Preferred picks
Our preferred picks within the sector are Prime REIT (XHWAF,B-1-7,S$0.92), Suntec REIT (XHWAF,B-1-7,S$0.92) and Ascendas REIT (XHWAF,B-1-7,S$0.92). While we remain positive on the outlook for both CapitaMall Trust (XHWAF,B-1-7, S$0.92) and CapitaCommercial Trust (XHWAF,B-1-7,S$0.92) the pending capital raising could hold back the stocks.
Share price performance
The Singapore REIT sector has experienced average share price declines of -5% over the past month which is better than Singapore developers -10% and the Straits Times Index at -7%. The best performing REIT has been Ascott Residential Trust (ACTRF,– – –,1.14) and the worst has been Mapletree Logistics Trust (XHWAF,B-1-7,S$0.92).
Stable interest rate outlook
10 year government bond yields appear to have stabilized in both the US (circa 5.0%) and Singapore (3.50%) with the yield around 1.50% which compares to the five year historical average of 1.18%. We maintain our view that 10 year bond yields are peaking and that the US 10 year bond yield should decline in 2007.
Undemanding yield gaps
The Singapore REIT sector has an average FY06E DPU yield of 5.3% which compares with the Singapore government 10 year bond yield (risk free rate) of 3.50%. The yield gap of 1.80% is undemanding when viewed globally where REITs have traditionally traded at between 1.0% and 2.0% above their respective risk free benchmarks.
Preferred picks
Our preferred picks within the sector are Prime REIT (XHWAF,B-1-7,S$0.92), Suntec REIT (XHWAF,B-1-7,S$0.92) and Ascendas REIT (XHWAF,B-1-7,S$0.92). While we remain positive on the outlook for both CapitaMall Trust (XHWAF,B-1-7, S$0.92) and CapitaCommercial Trust (XHWAF,B-1-7,S$0.92) the pending capital raising could hold back the stocks.
Wednesday, January 04, 2006
2005 Performance of STI
STI was at 2070.15 on 3 Jan 2005 and closed 2,347.34 on 30 Dec 2005. An increase of 13.4% for year 2005. 2005 is also a year that this blog was set up to record all the news of the share and IPO that interest us. Ever since the blog was setup, I found that my trading activities has increase compared to the rest of the years. News and discussion really increase the trading activities and furthermore, we have more discussion on shares among three of us. Let hope Year 2006 continue to see improvement in Singapore stock market. I think there will be election in Singapore in Year 2006 and project like IR and Singapore trying to increase the tourism activities in Singapore. Let hope STI continue to improve it performance.
Thursday, December 22, 2005
STI @ 2323.66
STI closed at 2300.25 at end of Nov and it has been rising to 2323.66 when it closed today. Year 2005 is coming to a end and let hope STI continuing it run till end of the year and mantain its stream till next year. There are around eight IPOs that close application this month and only two that interest us is Genting and SP Ausnet. Genting managed to rise around 8% during the first day of debut but SP Ausnet is still below its IPO since the day it has started trading this month. For more posting regarding these two IPOs, you can track the news at this forum.
A Merry Christmas and a Happy New Year to you. Thank for the support.
Tuesday, November 29, 2005
K-Reit
Today Keppel Land has announced that it will be launching a new REIT in the first quarter of 2006. The new REIT will be called K-Reit. Initially, the properties that K-Reit own will be Keppel Land's office properties, which are Keppel Towers, GE Tower, Bugis Junction Towers and KepLand's 44% share of the space at Prudential Tower. This REIT counter will be focusing on Office and it nearest competition will be CCT which is trading at around 4.9% yield. At the present moment, no information is provided by Keppel Land on the yield of K-REIT. I think we can use CCT as a minimum benchmark as K-REIT will be very similar to CCT. There will be no IPO for this REIT counter as Keppel Land intends to distribute 200 shares of K-REIT for every 1000 shares of Keppel Land held. The only way to get a hold of this new REIT is either buying Keppel Land share at open market or buy the REIT counter when it started trading in 1Q06.
Maybe this is a good way to launch REIT now as the current market sentiment to REIT IPO is not that great as PRIME REIT is trading below IPO price now and the rest of the REIT counters has drop around 15%. Anyway, all these will only happen when Keppel Land shareholder approve the deal.
Let see how the event unfold.
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