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Singapore Strategy Sep wrap-up: Singapore in 5
■ FSSTI closed Sep at 3,086.7pts, up 31.65pts (1.04%), despite a resurgence in Covid-19 cases, necessitating a reimposition of tighter restrictions. ■ We keep our end-2021F FSSTI target at 3,496, based on +0.5 s.d. above 12- year mean of 15.2x P/E. ■ Our top picks are: CIT, ST, SPHREIT, WIL, HRNET, KMLY, AREIT, STE, SATS, UOB, CD, YZJSGD, CSE, AZTECH, Q&M.
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Banks A subdued August
■ System loans contracted 0.2% mom in Aug 21 as a 0.7% mom shrinkage in regional loans more than offset the 0.2% mom rise in domestic credit growth. ■ Deposits rose 0.7% mom in Aug 21, driven almost equally by S$ and FCY. Liquidity conditions stayed ample with 84% LDR. FD growth outpaced CASA. ■ Reiterate Neutral. SG banks’ immediate exposure to Evergrande appears limited at the current juncture. Expedited Fed rate hikes are a key catalyst.
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UOB KAYHIAN |
MAYBANK KIM ENG |
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REITs – Singapore S-REITs Bi-Weekly Updates (16-30 Sep 21)
We expect the surge in daily COVID-19 cases to peak in October and stabilise thereafter. Thus, we advocate accumulating reopening plays during this month of heightened uncertainty and volatility. BUY hospitality REITs ART (Target: S$1.16) and FEHT (Target: S$0.71). BUY retail REITs FCT (Target: S$3.06) and LREIT (Target: S$1.01). Maintain OVERWEIGHT.
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ELITE Commercial REIT (ELITE SP) Sizing Up
Approaching the billion-dollar AUM mark ELITE Commercial REIT (ELITE) has been sizing up rapidly, with its AUM growing 65.2% to GBP515.3m (SGD955m) after completing its maiden portfolio acquisition earlier this year. Meanwhile, its sponsor has another GBP150m portfolio in the horizon. Management is now focused on addressing the size (market cap: USD400m) and liquidity (6m ADTV: GBP275k) of the REIT, as well as the 63.7% lease break potential in 2023/2028 and GBP94/125m of debt expiring in 2023/2024. ELITE trades at an attractive yield of 8.1% (consensus FY21E) and its upcoming rental review on 1st Apr 2022 serves as a key catalyst.
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Check out our compilation of Target Prices
