MAYBANK KIM ENG |
CGS CIMB |
Singapore Banks Defensive in 2020
Stable fees & NIM upside sets the stage for 2020E 10-years ago, trading & investment securities contributed over half of non-interest income (NI) for Singapore banks. By 9M19, this has shrunk to 44%, with fee income taking its place. This post-GFC structural change should improve visibility of NI going forward. Add to this an extra layer of stability with fee origination largely being driven by wealth management and retail. The sector’s increasing retail focus on both interest & noninterest income should keep credit charges in better check than wholesale heavy banking systems regionally, we believe. Together with the potential for NIM upside surprise from flat interest rates in 2020E, we remain Positive on the sector with UOB and DBS as preferred picks.
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Property Devt & Invt Good buying interest in Nov
■ Active Nov sales with city fringe and suburban projects accounting for the bulk of volume sales. ■ Expect transaction volumes to hold steady going into 2020 with ample supply in the launch pipeline. ■ Maintain sector Overweight. Our top picks are CAPL, UOL and CIT.
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RHB |
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Centurion Corp (CENT SP) Archer House Acquisition a Boon To Earnings
Maintain NEUTRAL with a new DCF-based TP of SGD0.47 from SGD0.43, 8% upside with c.5% yield. The purchase price of GBP15.1m (SGD26.98m) for the proposed acquisition of a 177-bed student accommodation will bring the total number of beds under management to 65,133, including 6,433 being purpose-built student accommodation, with 2,852 in the UK student housing portfolio. As such, we lift our forecasts by 2-5% for FY20-22 with the inclusion of the beds.
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Check out our compilation of Target Prices