Singapore Pre-Market Friday: Trade, property shares, Noble likely in focus

Singapore 50 dollar bill

Singapore’s market has a positive lead from Wall Street, with some signs that trade tensions may ease, and solid economic data from the city-state, but some jitters remain in the background.

Before the market open, preliminary data showed that Singapore’s economy grew 4.3 percent on-year in the first quarter, and above the fourth-quarter’s 3.6 percent. The Monetary Authority of Singapore also adjusted the slope of its policy band to a modest appreciation for the Singapore dollar, up from zero percent previously.

Wall Street got a boost after U.S. President Trump retreated from his threats to launch missiles at Syria in response to an alleged chemical weapons attack on civilians by the regime of Syrian President Bashar al-Assad. On Wednesday, Trump threatened on Twitter, “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming.”

That had sent markets scurrying into risk-off mode, with analysts concerned the conflict could escalate badly. But then on Thursday, U.S. time, Trump retreated, saying in a bizarrely contradictory statement on Twitter, “Never said when an attack on Syria would take place. Could be very soon or not so soon at all.”

Analysts said that reassured the market.

“For the time being, no news is good news for the markets who have welcomed the president’s convoluted comments,” Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said in a note early Friday. But she pointed to reports that the White House has eight targets in mind for a strike on Syria.

Additionally, Trump showed signs he may be retreating from his protectionist agenda, which sparked market fears he was recklessly pursuing a trade war with China, the U.S. president said that could be averted if the mainland lowers tariffs. To be sure, Trump’s reported statements also appeared to indicate he believed that Chinese President Xi Jinping’s Boao Forum speech on Tuesday, which largely repeated previous, sometimes-unfulfilled, pledges on reducing tariffs and opening sectors on the mainland, was a “negotiation.”

In another sign Trump may be caving on his protectionist rhetoric, he said was considering rejoining the Trans-Pacific Partnership, a trade pact he once scorned as a “disaster.”

Wall Street rallied on Thursday, with the Dow Jones Industrial Average rising 1.21 percent to 24,483.05, the S&P 500 up 0.83 percent at 2663.99 and the tech-heavy Nasdaq, which has been hit recently by trade-war fears, adding 1.01 percent to 7140.246.

But after the market close, the Wall Street Journal reported, citing officials familiar with the strategy, that the Trump administration is confident the hard-line approach with China was working and was planning to raise the pressure on the mainland.

That may have weighed on U.S. futures, which were indicating that Wall Street would fall later in the global day.

Yanlord, Hongkong Land and other property shares

Another large collective sale could boost sentiment for Singapore’s property developers, as well as the companies involved in the deal.

Singapore-listed Yanlord said Asia Radiant, which is its joint venture with Hongkong Land subsidiary MCL Land, made the winning bid of S$906.9 million for the collective sale of the Tulip Garden development in Singapore. The site could yield as many as 670 prime residential units, the company said in an SGX filing after the market close on Thursday. Real-estate services provider Colliers said Tulip Garden currently has 162 apartment and maisonettes units and two shop units.

Chinese property developer Yanlord said this was its first foray into the Singapore market.

Colliers said this was Singapore’s second-largest collective sale this year and that the bid came in more than 20 percent higher than the owners’ reserve price.

“The healthy demand for and firmer prices of residential sites reflect the optimism and rising confidence among developers of a more definitive recovery in the Singapore property market,” Tang Wei Leng, managing director at Colliers, said in a note on Thursday. “Large plots in prime central locations are rare and Tulip Garden provides an opportunity for the developer to capitalise on the upturn in the high-end homes segment. For the whole of 2018, we estimate that prices could rise by 10 percent in the Core Central Region.”

Manulife U.S. REIT

Manulife U.S. REIT said it acquired two properties in the U.S. for a total purchase price of US$387 million. One was for a property at 1750 Pennsylvania Avenue in Washington, DC, a location near the White House. The second, Phipps Tower, was located in Atlanta, Georgia. Both buildings had high occupancy of more than 97 percent each and were expected to increase the dividend per unit by 1.4 percent, the statement made early on Friday said.

ComfortDelGro

ComfortDelGro said it will buy Tullamarine Bus Lines, a family-owned bus company, for A$32.2 million to expand its presence in the Victoria, Australia market. TBL operates seven bus routes under contract with Public Transport Victoria and operates contracted school services as well as a small taxi management business called Cabways, the Singapore taxi operator said in a statement after the market close on Thursday. The deal will be completed via ComfortDelGro’s CDC Victoria subsidiary, which operates 81 public bus services in the suburbs of Melbourne and in Ballarat and Geelong, as well as charter services; it has a fleet of nearly 500 buses, the statement said.

Noble

Noble crossed the 75 percent threshold of creditor claims agreeing to its restructuring agreement, the beleaguered commodity trader said in an SGX filing late on Thursday. The controversial deal required 75 percent agreement by value of the debt to take effect. But the deal hasn’t passed all its hurdles: At least 50 percent of shareholders must also approve it and some of the largest are adamant in their opposition. The company has said if the deal isn’t approved, it would begin insolvency proceedings.

In a separate filing, Noble said on Friday before the market open that it would hold a special general meeting on April 30, after its annual general meeting, to pass a resolution for a vessel disposal

Silverlake Axis

Silverlake Axis said it landed a contract for core banking services from Malaysia Building Society Bhd. (MBSB), an Islamic bank in Malaysia and an existing customer. MBSB recently acquired Asian Finance Bank and it has been transferring its shariah compliant assets and liabilities to AFB, rebranding it as MBSB Bank, Silverlake said in a statement after the market close on Thursday. The Singapore-listed company will be handling post-merger systems integration, it said. The contract was expected to contribute to Silverlake’s results positively this financial year and in subsequent years, the statement said, but it added that due to a confidentiality clause in the contract, it couldn’t provide further details.

Lian Beng

Lian Beng said that for its fiscal nine-month of 2018, its profit to shareholders was S$16.87 million, down 20.6 percent on-year. It said in an SGX filing late Thursday that its revenue fell 6.2 percent on-year in the period, mainly on a decrease in construction segment revenue, offset by better revenue in investment holding and ready-mixed concrete segments. Other operating income rose 65.9 percent to S$17.1 million mainly on a gain from selling an investment property in Australia, while other operating expenses fell nearly 40 percent to S$6.8 million, mainly on a foreign-exchange gain.

But the construction company pointed to a buoyant outlook for Singapore’s construction demand this year and said it was “cautiously optimistic” on the outlook for the next 12 months. “The construction sector is cyclical and there are bound to be ups and downs,” Ong Pang Aik, the company’s executive chairman, said in the statement.

He also pointed to his company’s plan to spin off SLB Development in a Catalist IPO this month.

Ezion

Ezion is in talks with state-owned conglomerate China Merchants over a joint venture deal that could involve asset injections, the Business Times reported on Friday.