In this week’s edition of our 4 Stocks This Week, we look at four stocks that we think have interesting stories. We always welcome readers to reach out to us, via our Facebook page or email, to let us know if you think there are other interesting stocks. This will also help other readers to get more relevant information.
Coming from a macro perspective, we look at the Morgan Stanley Capital International (MSCI) All-Country World Index (AWCI) as a proxy of how the world’s economy is faring. After reaching an all-time high last week, the index came down slightly this week but ended off approximately where it started on Monday (6 March 2017).
At home, the Straits Times Index (STI) hovered at its 52-weeks highs. On Wednesday (8 March 2017), it hit the peak of $3.14529 before hitting a patch of volatility in the market depressed by oil prices plunging by close to 5% on Thursday (9 March 2017), and buoyed again on Friday (10 March 2017), when the government announced plans to ease property curbs.
Overall, the STI has delivered a return of 8.8% and 15.2% since the start of the year and in the past 52-weeks respectively.
# 1 City Developments Limited
City Developments Limited (CDL), is one of Singapore’s largest real estate companies with a portfolio of residential, commercial, hospitality and retail space presence in over 26 countries including China, UK, US, Japan, Australia and many more.
This week, CDL’s share price jumped close to 5.4% from $9.630 on Monday (6 March 2017) to $10.150 on Friday (10 March 2017). There was seemingly no reason other than the government easing certain property cooling measures.
These included shortening the Seller’s Stamp Duty (SSD) from four years to three as well as reducing the amount they have to pay by 4% each year. In addition, the Total Debt Servicing Ratio (TDSR) will also be scrapped for any loans falling below 50% of the property value according to the Loan-To-Valuation (LTV) calculations.
The jump in share price was not just contained to CDL, with many Singapore’s real estate related stocks also notching robust gains.
The easing of property curbs may stimulate more demand, however, there still remains very tight restrictions. Any property buyer should still consider the remaining restrictions and not be persuaded by this easing or anyone telling them that this is a good sign of more easing to come.
City Developments share price chart (1-week)
Source: Yahoo! Finance/ Google Finance
# 2 Kimly Ltd
Kimly Ltd launched its Initial Public Offering (IPO) on Wednesday (8 March 2017), becoming Singapore’s first traditional coffee shop operator to do so. Priced at $0.25 cents, this widely anticipated IPO is valued at about $288.7 million.
Kimly has close to 500 stalls in 64 outlets across the island offering affordable food and beverage. According to tis Executive Director, Vincent Chia, the business is highly resilient, operating stably in good and bad economic situations as well as having a strong cash flow from its operations.
Also Read: Why Do Older Singaporeans (Who Never Bought Stocks) Have SingTel Shares In Their CPF Account?
The $40.4 million raised during the IPO will be used mainly for acquisitions and joint ventures as well as expanding its own brand. It also has plans to expand its central kitchen in an effort to improve output capacity, efficiency and productivity. The central kitchen will also play a vital role in ensuring quality of its products.
With the offer closing at 12pm on Thursday (16 March 2017), anyone seeking to buy its shares can do so via ATMs locally.
# 3 Silverlake Axis Ltd
Technological products, systems and solutions provider to major financial institutions in South East Asia, Silverlake Axis, recently announced that it is considering acquiring the other businesses of its current Executive Chairman.
This news is material as the company came under fire in 2015 where some major accusations were hurled at the company, which led to it suffering a significant dip in its share prices. The company tried to repair the damage, but is still feeling lingering effects of the poison pen targeted at how its Executive Chairman was profiting, from shareholders in the company, by separately owning private companies in the same business.
This announcement should hopefully quell shareholders’ desire for the company to merge all related businesses for transparency.
On an unrelated note, the company also announce that it would continue paring down its stake in Shenzhen Stock Exchange-listed Global InfoTech in line with local regulations.
In terms of share price, Silverlake Axis has increased nearly 2.7% from $0.56 on Monday (6 march 2017 to $0.575 on Friday (10 March 2017). Over a longer horizon, the company has returned close to 8.5% since the start of the year and 2.3% over a 52-week period.
Silverlake Axis share price chart (1-week)
Source: Yahoo! Finance/ Google Finance
# 4 MapleTree Industrial Trust
Mapletree Industrial Trust (MINT) has over 85 mainly industrial properties in Singapore. With a core focus in industrial properties in Singapore, the trust has been able to roll out good strategies and making use of its insights to keep its occupancy rates at stable levels above the 90% mark, even as the industrial property segment in Singapore has come under pressure.
Further, MINT is now showing significant strides in accessing another portion of the industrial property market with its third data centre project. Expected to be completed in 2018, the data centre will also be fully occupied by a client for an initial 10-year period.
DBS has also released a “Buy” call on the REIT, putting its 12-month forecasted price at $1.90.
In this past week, MINT has lost 0.9%, starting at $1.685 on Monday (6 March 2017) and ending at $1.670 on Friday (10 March 2017). Looking further back, MINT has returned 1.5% since the beginning of the year, and 14.8% if we base it on the past 52-weeks.
Also Read: How REITs In Singapore Performed In 2016
MapleTree Industrial Trust share price chart (1-week)
4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.
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