Comprehensive Analysis on Singapore’s Financial Market Companies

Broker Name: Lim & Tan Securities

Date of Report: 23 December 2024

OUE REIT: Strategic Divestment of Lippo Plaza

OUE REIT has entered into an agreement to divest its entire equity interest in Lippo Realty (Shanghai) Limited, which owns a significant share of Lippo Plaza in Shanghai. The sale, valued at RMB1,917.0 million, aligns with OUE REIT’s strategy to optimize its portfolio. The divestment is expected to strengthen income resilience and provide a sustainable return to unitholders. CEO Mr. Han Khim Siew emphasizes the removal of non-core assets and the focus on Singapore-based properties post-divestment.

The divestment is projected to conclude by the end of 2024, with net proceeds estimated at S\$318.2 million. These funds will enhance OUE REIT’s financial flexibility, enabling debt reduction and potential acquisition of higher-yielding assets. The divestment is seen positively, given the challenging market conditions in China.

SingPost: Whistleblowing Incident and Its Aftermath

SingPost recently dealt with a whistleblowing report concerning its international e-commerce logistics parcels business. Allegations pointed to manual entries of delivery status codes meant to avoid contractual penalties. An internal investigation led to the termination of three managers involved and a settlement with the affected customer.

The company’s employment of senior executives, including the Group Chief Executive Officer, was also terminated following the investigation. Despite the turmoil, SingPost maintains that the incident will not materially impact its business or ongoing sale of its Australian operations. With a market cap of S\$1.26 billion, SingPost trades at a 20x forward PE and 1.1x P/B ratio, offering a dividend yield of 3%.

FSSTI Stock Selection and Institutional Movements

The financial report highlights significant institutional activities, with OCBC, Singtel, and UOB among the top net buys. In contrast, DBS and CapitaLand Investment saw substantial net sells. The shifts indicate strategic moves by institutional investors, potentially signaling trends and confidence levels in these stocks.

Market Observations: European and Asian Economic Dynamics

The report also delves into broader market trends, highlighting the European Central Bank’s need to adjust policy rates amid domestic economic slowdowns. In Asia, China’s property sector shows signs of stabilization, with home prices falling at a slower pace as government measures take effect.

Dividend Announcements

Several companies announced dividends, including Frasers Property and Thai Beverage, providing investors with timely returns. These announcements reflect companies’ financial health and their commitment to rewarding shareholders.

SGX Watch-List and Future Outlook

The report lists 33 companies under the SGX Watch-List, indicating potential risks or underperformance. This watch-list serves as a crucial tool for investors to monitor companies that may face regulatory challenges or operational difficulties.

Conclusion

The detailed analysis provided by Lim & Tan Securities offers a comprehensive overview of the Singapore financial market, highlighting strategic corporate moves, market trends, and investment opportunities. Investors are advised to remain vigilant and consider these insights when making future investment decisions.