Singapore Pre-Market Wednesday: Noble, Mapletree Commercial, Frasers Centrepoint

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Singapore shares may open on the back foot on Wednesday after Wall Street suffered a selloff overnight, hit by a combination of rising bond yields and earnings disappointments.

Earnings results from STI-component Venture are due on Wednesday; its share price has tumbled recently amid concerns about its customers.

The Dow Jones Industrial Average ended Tuesday down 1.74 percent, the S&P 500 was off 1.34 percent and the Nasdaq dropped 1.70 percent. Futures for the three indexes have nosed a tad up.

Japan’s market also opened lower on Wednesday, trading down 0.80 percent at 8:02 A.M. SGT.

That was after the 10-year U.S. Treasury yield briefly pushed over the key technical and psychological level of 3 percent, marking up a four-year high; at 8:10 A.M. SGT, the yield was at 2.99 percent, according to Bloomberg data.

The dollar index, which measures the greenback against a basket of currencies, was at 90.775 at 8:02 A.M. SGT, up from around 90.32 at the start of the week.

Fears of higher yields

“While all of today’s U.S. economic reports beat expectations with confidence rising in the month of April and new home sales increasing in March, there’s concern that the rise in yields poses a threat to the recovery in stocks and the economy,” Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, said in a note late on Tuesday, U.S. time.

Also weighing on stocks in the U.S., Caterpillar’s earnings for the first quarter beat estimates, but management said the results were the “high watermark” for the year, Reuters reported, noting that the company was facing a profit margin squeeze as the Trump administration’s new tariffs on steel imports would raise costs.

Earnings woes

The tech stocks weren’t immune to the selloff. Shares of Google parent Alphabet tumbled on Tuesday after climbing costs caused its biggest ever decline in gross margins, Reuters reported, noting that helped push down other key technology “FAANG” plays, including Amazon, Facebook, Netflix and Apple.

Analysts said market sentiment was taking a hit.

“There has been a sense of post-earnings pessimism permeating the markets suggesting this is about as good as it is going to get,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Wednesday. “The sudden surge in U.S. yields had already been weighing on equity sentiment, but when you factor in the skid in technology stocks and Caterpillar less than reassuring outlook, it makes for a very rough day on the trading floor.”

Mapletree Commercial Trust

Mapletree Commercial Trust reported its net property income for its fiscal fourth quarter rose 1.2 percent on-year to S$84.29 million and its distribution per unit (DPU) was up 0.4 percent on-year at 2.27 Singapore cents, which the manager attributed to higher contributions from VivoCity, Mapletree Business City and Merrill Lynch HarbourFront.

For the full fiscal year, net property income rose 15.9 percent to S$338.85 million and the DPU was up 4.9 percent at 9.04 Singapore cents, according to a filing with SGX after the market close on Tuesday.

Frasers Centrepoint Trust

Frasers Centrepoint Trust reported its fiscal second quarter net property income rose 6.9 percent on-year to S$34.79 million, while its DPU was up 2.0 percent at 3.04 Singapore cents.

Growth was mainly driven by Northpoint City, which saw a 31.7 percent on-year increase in revenue on “significantly” improved occupancy after the completion of asset enhancement works, according to a filing to the SGX from the REIT manager before the market open on Wednesday.

In the quarter, 37 leases accounting for 6.2 percent of the suburban mall operator’s net lettable area were renewed with an average rental reversion of positive 9.1 percent, the filing said.

Suntec REIT

Suntec REIT reported net property income for the first quarter rose 1.9 percent on-year to S$62.99 million, while its DPU was up 0.3 percent at 2.433 Singapore cents.j

That was relatively in line with Daiwa’s forecast for DPU of 2.43 cents and net property income of S$62.7 million.

The Singapore office portfolio reached committed occupancy of 99.5 percent, while the Singapore retail portfolio occupancy was at 98.6 percent at the end of the quarter, according to the filing to SGX on Wednesday before the market open.

Noble

The saga over troubled commodity trader Noble’s restructuring continued, with Chairman Paul Brough writing his second letter in a week to stakeholders.

In the letter, which was filed to SGX on Wednesday before the market open, he highlighted similar points as his previous letter, reminding shareholders that if the proposed restructuring isn’t completed, they will receive nothing. He added that while major shareholder Goldilocks said it has an alternative restructuring plan, it hasn’t delivered it and it hasn’t shown that it is “credible.”

Brough also said that Noble’s rejection of Goldilocks’ notice to put forward an alternate slate of directors was “in no way an act of bad faith,” as the board could not exercise discretion on following Bermuda law.

“Goldilocks’ actions are destroying value for you and are putting the completion of a demonstrably fair deal at risk,” he said.

On Monday, Goldilocks had said in a statement: “This act of utmost bad faith by Noble is calculated to intentionally damage Goldilocks and all other shareholders.”

Silverlake Axis

Silverlake Axis landed a new core banking contract with a large banking institution in Southeast Asia, the company said in a filing to SGX on Tuesday after the market close. The bank is “undertaking a comprehensive programme to modernise its existing core banking legacy systems,” the filing said, adding the first phase was rolling out the bank’s ATM switch, retail payments platform and mobile banking.

The contract was scheduled to be implemented within 15 months and was expected to contribute positively to Silverlake’s results in the current and successive financial years, it said. Due to confidentiality clauses in the contract, no further details could be provided, it said.