| UOB KAYHIAN | CIMB |
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Banking – Singapore Unwinding QE – Implications For Banks The FED will commence balance sheet normalisation in a predictable manner in late- 17 and has disclosed the mechanism to gradually reduce reinvestment of principal repayments for treasury and mortgage-backed securities that have matured. We postulate that normalisation of the size of central banks’ balance sheets downward would lead to normalisation of valuations for banks upward. Maintain OVERWEIGHT.
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CapitaLand Robust showing in China ■ We found robust leasing activities amid high take-up rates for the newly-opened CAPL properties in China. ■ The company’s China properties have strong recurrent income generation with good longer-term visibility, in our view. ■ CAPL is gaining traction in its asset light retail management contract activities. ■ Maintain Add with an unchanged TP of S$4.19.
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| OCBC | |
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SG Hospitality: Minimum stay duration revised
URA announced last Friday that the minimum stay duration for private residential properties has been lowered from six months to three months, with immediate effect. Stay durations of less than three consecutive months continue to be disallowed. While we expect the impact on Singapore serviced residences (SRs) to be minimal in the short-term, we expect a greater shift away from SRs in the longer term as home owners adjust to the new regulations and companies continue to give their employees more flexibility in choosing their own housing arrangements. Out of the REITs under our coverage, both Far East Hospitality Trust (FEHT) and Ascott Residence Trust (ART) have SRs in Singapore. Within the hospitality sector, our top pick remains OUE Hospitality Trust [BUY; FV: S$0.75]. As trading for its ex-rights units has started, we maintain HOLD on CDL Hospitality Trusts [HOLD; FV: S$1.48]. Do refer to the latest S-REITs Tracker for a summary of our individual REIT ratings and useful metrics across the various REIT sub-sectors. Given the recent compression in yields, we maintain NEUTRAL on the hospitality sector.
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| RHB | DBS GROUP RESEARCH |
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Singapore Retailing Too Many Malls In Singapore? Singapore’s retail market is facing significant challenges, with overall retail sales growth falling into a YoY decline in 1Q17. Retail occupancy and rent have also been on a declining trend since 2015, while the significant capacity coming onstream over the next few years would likely exacerbate the problem. Many market watchers are asking the valid question of whether there is too much shopping mall space in Singapore. We believe the underlying issue is not the amount of space, but what mall owners and retailers have to do in order to revive the retail scene in Singapore.
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Del Monte |
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