| PHILLIP SECURITIES | CIMB SECURITIES |
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Singapore REITs First rate hike in 2018 and the implications for S-REITs SINGAPORE | REAL ESTATE (REIT) | UPDATE
As widely expected, The Federal Reserve, raised rates by 25 basis points to 1.75% last week, while maintaining its forecast for three rate hikes total for 2018. Even as the Fed upgraded its outlook for the economy, it expects near term inflation in 2018 to remain benign, with both core and headline inflation projection coming in at 1.9%. The news was largely shrugged off in terms of its impact on REITs with the FTSE S-REIT Index down a marginal -0.2% the day after the rate hike. Nonetheless, since the turn of the year, the S-REIT sector looks to be pricing in some of these headwinds from the macro front this year, with the FTSREI down -5.4% YTD vs the STI’s +0.1%. We highlight some of the queries investors may have at this juncture in face of the impending further rate hikes.
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ComfortDelGro Uber agrees to sell SEA business; CD tie-up in the air
■ Grab announced today it had acquired Uber Technologies’ Southeast Asia business. ■ Uber app to be phased out in SEA. Pursuant to this, we believe it is highly likely that its proposed tie-up with Uber could be renegotiated. ■ Many scenarios could pan out. Maintain Hold and TP pending further information from CD or the government.
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| UOB KAYHIAN | DBS VICKERS |
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M1 (M1 SP) Diversifying And Expanding Across Broader Horizon
M1’s mainstay mobile business faces stiff competition from the impending entry of TPG Telecom as the fourth mobile player in 2H18. Thus, diversification to newer pastures has taken on greater urgency. Management plans to expand into corporate ICT and digital services, eg managed infrastructure, cyber security, smart nation solutions, cloud computing and data analytics. Margins for these solutions are lower and would drag overall margins lower as well. Maintain SELL. Target: S$1.60.
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City Developments The Tapestry, standing tall for CDL
315 units at The Tapestry sold, 70% of 450 launched units at an “early bird” ASP of S$1,310 psf; a strong take-up in our view Smaller units (1-2 bedders) were popular; on average, sizes were less than 700 sqft, implying total quantum of S$700k to S$1m per unit Buyers were largely residents, 76% Singaporeans while 24% were PRs and foreigners Strong sales at both New Futura and now The Tapestry bodes well for CDL and is an encouraging sign for the residential market as more property launches come onstream. Interesting launches include two Woodleigh sites, Shunfu Ville, Stirling Road, and two Serangoon sites
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Check out our compilation of Target Prices
