Singapore Pre-Market Tuesday: Keppel Corp, Keppel DC REIT, Bumitama Agri

A Singapore 10-dollar note Photo by Leslie Shaffer

Singapore shares will start trade on Tuesday with a generally positive lead from Wall Street, although geopolitical rumblings over Iran may dampen sentiment.

“U.S. equities finished mostly higher, but off their tops as energy shares started to take profits following a Presidential Tweet promising to announce his decision on the Iranian nuclear deal Tuesday at 14:00 EST,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Tuesday.

WTI retreated from three-year highs, and equities appear to have echoed that weakness. Despite the strong U.S. economic fundamentals within a Goldilocks zone, there seems to be no escaping geopolitical uncertainty that continues to run at peak levels,” he added.

The Dow Jones Industrial Average ended Monday up 0.39 percent, the S&P 500 tacked on 0.35 percent and the Nasdaq gained 0.77 percent. Futures for the three indexes were nosing down a tad early Tuesday.

Japanese shares opened a tad in the red, with the Nikkei 225 off 0.14 percent at 8:02 A.M. SGT.

Futures for WTI crude were down 0.93 percent at US$70.07 at 8:09 A.M. SGT Tuesday, while Brent was off 0.76 percent at US$75.59, according to Bloomberg data. Innes said reinstating the U.S. sanctions against Iran will “rocket” oil prices higher.

The dollar index, which measures the greenback against a basket of currencies, was at 92.6890 at 8:08 A.M. SGT, off a high of around 92.974, which Reuters said was its highest since December.

“Another series of EU economic data missed its mark toppling the EUR/USD to a new year-to-date low at 1.1896 before recovering to close flat for the New York session,” Innes said. “The softer run of European economic data has some thinking the ECB will kick the can down the road and delay the end of their bond purchase program.”

The euro was fetching US$1.1930 at 8:37 A.M. SGT.

Keppel Corp.

Keppel Corp. said that Da Di Investment and Shanghai Merryfield Land, both indirect subsidiaries held through Keppel Land China, entered into a deal to sell their respective 80 percent and 20 percent stakes in Keppel Bay Property Development (Shenyang), or KBPDS.

The stakes will be sold to Shenyang Vanke Property Development for a total consideration of around 503 million yuan, or around S$105 million, Keppel said in a filing to SGX after the market close on Monday. It said it expected to recognize a gain of around S$31 million from the divestment.

Keppel Corp. has an effective 99.8 percent interest in KBPDS, held indirectly through Keppel Land China, the filing said.

“The divestment is in line with Keppel Land’s strategy to recycle assets to seek higher returns and rebalance its portfolio to focus on selected high-growth cities in China,” the filing said. The deal is expected to be completed by June, it said.

The divestment could help to plump the company’s earnings; for the first quarter, Keppel reported profit after tax and minority interests (PATMI) of S$337.5 million.

Keppel DC REIT

Keppel DC REIT said that its joint bookrunners and underwriters, Citi and DBS, have closed the book on orders for its private placement.

The private placement was over two times covered and found strong participation from new and existing institutional, accredited and other investors, the REIT manager said in a filing to SGX before the market open on Tuesday.

DBS Treasury Investments unit was allocated 1.354 million new units under the placement, the filing said.

On Monday, the REIT said it was buying a 99 percent stake in Kingsland Data Centre for S$295.1 million, to be funded in part via a private placement of 224.0 million new units in the REIT. The new units will be issued at S$1.353 each, a discount of about 4.9 percent to the volume weighted average price of the unit’s price on May 4, the REIT said.

The REIT units were halted on Monday and Keppel DC REIT requested the halt be lifted on Tuesday before the market open.

Bumitama Agri

Bumitama Agri reported first-quarter net profit fell 15.1 percent on-year to 273.63 billion rupiah on revenue of 1.908 trillion rupiah, down 9.1 percent on-year.

“The decrease was mainly due to lower sales price of palm products, higher general and administrative expense, higher finance cost and
foreign exchange loss,” the company said in a filing to SGX before the market open on Tuesday.

It said the net foreign-exchange loss of 16 billion rupiah in the quarter was mainly on translation losses on U.S. dollar denominated borrowings in the rupiah financial statements as the rupiah fell against the greenback.

“With increasing demand from the growing domestic and emerging markets as well as slower pace of new plantings globally arising from adoption of sustainability policy which avoids deforestation and exploiting communities, the long term fundamentals of the palm oil industry
remain positive,” the company said in its outlook.

“The group anticipates improvement in its production volume in 2018 due to continued yield recovery, implementation of best management practices and contribution from newly matured plantations,” it added.

Frasers Logistics & Industrial Trust

Frasers Logistics & Industrial Trust posted fiscal second quarter adjusted net property income of A$33.41 million, up 8.1 percent on-year. Distribution per unit (DPU) was 1.81 Australian cents, up 3.4 percent on-year, boosted by an increase in distributable income and a higher hedged exchange rate, the manager said in a filing to SGX after the market close on Monday.

The REIT has 61 industrial and logistics assets in Australia, concentrated in the major industrial markets, including Sydney, Melbourne and Brisbane.

“Above-average take up levels have been observed across the three major cities, driven by occupier demand from third-party logistics, retail goods and ecommerce,” the REIT manager said in its outlook statement. “The strong demand has been further well supported by government infrastructure spending and strong population growth, particularly in New South Wales and Victoria.”

After the end of the quarter, the REIT announced it planned to buy 17 logistics facilities in Germany and 4 in the Netherlands for a consideration of around 316.2 million euros, or around S$972.8 million.