Singapore Pre-Market Wednesday: Ascott Residence Trust, First REIT, Midas

Ceramic cats at DaisoCeramic cats at Daiso

This article was originally published at 8:34 A.M. SGT on Wednesday; it has since been updated. 

Singapore’s shares will begin trade on Wednesday with a solidly positive lead from Wall Street after earnings from key players, including Netflix and Goldman Sachs.

The Dow Jones Industrial Average ended Tuesday up 0.87 percent, the S&P 500 tacked on 1.07 percent and the Nasdaq gained 1.74 percent. In Japan, the Nikkei was also trading up 0.79 percent at 8:18 A.M. SGT.

Netflix shares climbed more than 9 percent to a record high close of US$336.06 after handily beating analyst forecasts for subscriber growth; that also helped to boost shares of Amazon. Goldman Sachs also reported forecast-beating earnings, but its shares closed lower. Reuters attributed the fall to analyst concerns over volatility in the investment bank’s core businesses.

Stephen Innes, head of Asia-Pacific trading at OANDA, said the market sentiment was calming after recent trade fears spurred ructions.

“The absence of geopolitical escalations (for now) has helped market sentiment steady as traders work familiar themes with little inference. But outside of earnings-inspirited gains in equities, global markets remain incredibly uncommitted,” he said in a note on Wednesday.

“Indeed, it’s a breath of fresh air as traders turn focus to data and corporate profits, yet remain cautious knowing stock markets are only one presidential tweet away from upsetting the apple cart,” he added.

There were signs that fears of a trade war between China and the U.S. won’t be going away anytime soon. China’s around 178 percent duty on sorghum imports from the U.S. is expected to take effect soon, a retaliatory move that was in response to one of U.S. President Trump’s first trade salvos, tariffs imposed on imports of solar panels and washing machines, Bloomberg reported on Wednesday.

Ascott Residence Trust

Ascott Residence Trust reported that its distribution for the first quarter of 2018 rose 16 percent to S$29.2 million, with a distribution per unit at 1.28 Singapore cents after adjusting for one-off items, up 9 percent over the year-earlier period’s DPU, which was restated for a rights issue. Revenue was up 1 percent on-year at S$112.8 million.

That was below Daiwa’s forecasts, published on Monday, for revenue of S$125.7 million and a DPU of 1.54 Singapore cents.

Bob Tan, Ascott Residence Trust Management Ltd.’s chairman, said in an SGX filing on Wednesday that in January, the REIT divested two serviced residences in Shanghai and Xi’an at 69 percent above property valuation with a net gain of S$51.6 million. Beh Siew Kim, ARTML’s CEO, added in the statement that revenue per available room (RevPAU) rose 20 percent in Belgium, 16 percent in China, 7 percent in the United Kingdom and 4 percent in Indonesia.

First REIT

First REIT reported a 0.5 percent on-year rise in DPU to 2.15 Singapore cents for the first quarter of 2018, according to an SGX filing on Tuesday after the market close by the REIT’s manager Bowsprit Capital. Revenue rose 5.8 percent to S$28.7 million on contributions from Siloam Hospitals Buton & Lippo Plaza Buton and Siloam Hospitals Yogyakarta, which were acquired in the fourth quarter of 2017. Existing properties in Indonesia and Singapore also saw higher revenue, the statement said.

Keppel T&T

Keppel T&T reported first quarter revenue rose 5.1 percent on-year to S$42.81 million, while earnings per share fell 15 percent on-year to 1.7 Singapore cents. Profit attributable to shareholders fell 16.3 percent on-year to S$9.43 million, the company said in a filing to the stock exchange after the market close.

Midas

Jilin, China branches of China Development Bank and the Export-Import Bank of China told Midas’ subsidiary Jilin Midas Light Alloy that police from the Economic Crimes Investigation Unit were investigating the company’s former executive chairman, Chen Wei Ping, Midas said in a statement to SGX on Tuesday. It said that Chen was suspected of involvement in fraud related to loans. Shenton Wire was unable to contact Chen for comment.

According to the statement the two banks requested JMLA provide explanations within five days of March 30 of Chen’s involvement in the loans, the group’s financial condition, repayment plans for past-due loans and the bankruptcy progress of project guarantor, Jilin Midas Aluminium Industries. Chen was still executive chairman at the time, but didn’t declare to the board that he was assisting the police investigation, the statement said.

Midas shares have been suspended while the company is under investigation in Singapore.