City Developments Successful tender for Amber Park enbloc site
■ CDL and Hong Realty have made a successful bid for Amber Park at S$906.7m.
■ This replenishes CDL’s Singapore land inventory, adding a potential 800 condo units.
■ We maintain our Add call with a target price of S$12.54. Successful bid for Amber Park
● CDL and Hong Realty, the private real estate arm of the Hong Leong Group, have won the Amber Park enbloc tender. The tender was keenly contested, attracting eight submissions.
● The price of S$906.7m works out to be S$1,515psf ppr. CDL will take 80% of the project while Hong Realty will take the remaining 20%. At this price level, this will be the largest freehold collective sale by dollar value in Singapore to date.
Sembcorp Industries (SCI SP) 1:
Shockingly High Spot Electricity Prices Herald Potential 3Q17 Profit For India
Spot electricity prices in India reached a record high of Rs5.1/kWh in 3Q17 on a conflux of supply factors. With losses from SGPL likely to shrink by 30-40%, SCI could see India report a 3Q17 profit. While electricity prices have corrected to c.Rs3.4/kWh, it could remain elevated on structural factors. SGPL is estimated to break even at c.Rs3.5/kWh, and a turnaround in its India operations could happen sooner than expected. Maintain BUY with a target price of S$3.57.
Singapore REITs: Another strong PMI performance
Singapore’s manufacturing and electronics Purchasing Managers’ Index (PMI) continued their robust momentum, coming in at 52.0 and 53.6 for the month of Sep, representing MoM increases of 0.2 and 0.4 points, respectively. This also represented the 13th and 14th consecutive month of expansion, respectively. Similarly, we saw last week another month of strong industrial production in Singapore for Aug, with YoY growth of 19.1% registered. This was higher than the street’s expectations for an increase of 16.0%. This trend has also been observed in the Eurozone, with the manufacturing PMI of 58.1 in Sep at the highest level since Feb 2011. We believe these data points augur well for the sentiment of industrial REITs, although this would be partly offset by continued supply pressures in Singapore in the near-term which would weigh on rental reversion figures. Maintain NEUTRAL on the broader S-REITs sector. We like Frasers Logistics & Industrial Trust [BUY; FV: S$1.22] and Mapletree Logistics Trust [BUY; FV: S$1.35] within the industrial REITs space.
Oro Negro contracts called off
SMM terminates three jackup contracts with Oro Negro
Minimal impact on P&L; provisions for these unit made in 4Q15; 20% deposit will be forfeited by yard
Re-rating catalyst: oil price recovery, jackup sale, contract wins
Reiterate BUY; TP S$2.30
Check out our compilation of Target Prices