Maybank Research Pte. Ltd.
Market Shaping News Update
Grab’s GXS Bank Acquires Validus Capital to Expand SME Financing
Maybank Research Pte. Ltd. has released an update on Grab’s acquisition of Validus Capital, stating that the deal is expected to be all-cash and valued at USD25-40m. This acquisition will boost GXS Bank’s reach to larger SMEs and expand Grab’s SME clientele.
Key Highlights:
Grab’s GXS Bank acquired Validus Capital to expand SME financing in Singapore.
The deal is expected to be all-cash and valued at USD25-40m.
This acquisition will increase GXS’s reach to larger SMEs and enhance Grab’s SME offerings.
SATS’ Wholly-Owned Subsidiary Secures Cargo Handling Contract with Emirates SkyCargo
In a positive development for SATS, their wholly-owned subsidiary, Worldwide Flight Services (WFS), has secured a new five-year cargo handling contract with Emirates SkyCargo at Frankfurt Airport. The agreement is part of their collaboration with Emirates, with SATS and WFS now providing gateway services at 21 stations across the airline’s global network.
Key Highlights:
SATS’ WFS has been awarded a new cargo handling contract with Emirates SkyCargo at Frankfurt Airport.
The contract serves as a critical gateway in Emirates’ European network, handling over 1,400 tonnes of weekly cargo capacity.
Lum Chang’s Subsidiary Secures Contract Worth SGD29.14m
Lum Chang’s subsidiary has secured a contract worth SGD29.14m for additions and alterations to an existing four-storey commercial development at 291 New Bridge Road. The contract was awarded by Shaw Brothers to Lum Chang Interior and has a project timeline of approximately 18 months.
Key Highlights:
Lum Chang’s subsidiary secured a SGD29.14m contract for commercial development work.
The scope of work includes design, retrofitting, and building works for a mall, retail units, and carpark.
ComfortDelGro – A Shelter from the Tariff Storm
The US has imposed tariffs, which are expected to have a significant impact on global trade and economic growth. ComfortDelGro is seen as a defensive pick amid tariff turbulence, with a budget-friendly service offering like GrabHitch and SharedSaver expected to cushion its growth.
Key Highlights:
ComfortDelGro is expected to be insulated from US tariffs due to its budget-friendly services.
The company has a compelling 6% yield and a target price of SGD1.64.
Singapore Airlines (SIA) Group Sees March Passenger Traffic Decline
SIA Group’s passenger traffic declined by 0.8% YoY in March, while passenger capacity rose by 2.7%. The group’s passenger load factor (PLF) came in at 84.7%, down 3 ppts YoY.
Key Highlights:
SIA Group’s passenger traffic declined by 0.8% YoY in March.
Passenger load factor (PLF) decreased to 84.7% with SIA and Scoot posting monthly PLFs of 84.1% and 87.2% respectively.
Cargo carriage increased by 7.6% YoY.
Market Overview and Recommendations
The market outlook remains neutral, with several stocks being recommended for their defensive qualities and growth potential.
Top Equity Ideas:
Grab: Insulated from US tariffs with no direct exposure, making it a top defensive pick amid tariff turbulence.
ComfortDelGro: A shelter from the tariff storm with a compelling 6% yield.
Sector Outlook
Singapore Banks: The central doctrine of the US tariffs has increased risks from weaker global growth and disruptions to North-South supply chain relocations.
DBS, UOB, and OCBC: Hold recommendations due to limited catalysts and increasing asset quality risks.
Upcoming Events
Several key events are scheduled to take place in the near future, including the release of various economic indicators and company results.
Important Disclosures and Analyst Certifications
This research report is prepared for general circulation and for information purposes only.
It should not be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein.
Investors should note that values of such securities may fluctuate, and each security’s price or value may rise or fall.
Definition of Ratings
Maybank IBG Research uses the following rating system:
Buy: Return expected to be above 10% in the next 12 months (including dividends)
Hold: Return expected to be between 0% and 10% in the next 12 months (including dividends)
Sell: Return expected to be below 0% in the next 12 months (including dividends)
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Market Trends and Analysis
Singapore Daily Newsletter: Top equity ideas and market updates.
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