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Stocks In Focus SG (Asiasons, LionGold, CCT, Ascott REIT) – 21/10/13
Asiasons, LionGold, Probably Still A Go For Traders
Trading volume is possibly expected to pour in for penny stocks such as Asiasons Capital and LionGold Corporation as these two counters will have their trading restrictions lifted by the Singapore Exchange (SGX) today. Asiasons and LionGold have both seen strong run-ups in their stock prices this year until a suspension on trading on these counters were issued by the SGX on 4 October as a result of large falls. On 6 October, SGX banned investors from contra trading and short-selling them. As trading for these counters have stabilised, SGX said on 18 October that it would lift the restrictions on such counters. LionGold was trading above 70 cents since January 2011 before reaching a high of $1.755 on 27 August, 2013. LionGold shares closed at 15.3 cents on 18 October 2013. Asiasons was also trading above 30 cents since May 2012 till a high of $2.68 was hit on 24 September 2013. Asiasons closed at 12.8 cents on 18 October 2013.
Significance: A brokerage house mentioned that there are some fundamentals in both Asiasons and LionGold, which could underpin their rise, and that an accumulation for such counters might possibly be seen this week. Some traders also quipped that other small caps, which suffered “collateral damage” over the past trading week could also regain some ground.
DPU 2.04 Cents Maintained; CCT
Distribution per unit of 2.04 cents for 3Q13 has been clocked by CapitaCommercial Trust (CCT), while distributable income increased 1.6 percent year-on-year, to $58.8 million, compared to that of $57.9 million a year ago. This increase in distributable income was seen despite the cessation of One George Street’s yield protection income. Rather, the lower interest expenses, and distribution of tax exempt 1H13 distributable income received from Quill Capita Trust helped push its distributable income up. An overall portfolio occupancy rate of 97.6 percent was achieved as of 30 September, 2013. In 3Q13, CCT have signed new leases and renewals of about 347,000 square feet of which 42 percent are new leases. Leasing activities for its properties at Six Battery Road and One George Street have been brisk and occupancy is expected to continue to strengthen from 3Q13’s levels of 97.9 percent and 94.2 percent. Capital Tower’s committed occupancy rate, currently at 97.1 percent is likely to see it reach 100 percent in 4Q13 upon the completion of a lease negotiation for about 40,000 square feet by one of CapitaLand’s business unit.
Significance: Barclays Research expressed that it remains positive on the office sector in Singapore as rents have reached an inflection point in 1Q13 and views CCT as a beneficiary of the below average prime office supply in 2013 to 2015 when development of its CapitaGreen completes. Barclays Research maintained its price target of $1.87 for CCT.
Ascott REIT To Sell Serviced Residence Property In China Worth Rmb628m
Ascott Residence Trust (Ascott REIT) through its wholly owned subsidiary, Somerset FG has commenced the launch of a strata sale where the firm has the intention to enter into sale and purchase agreements with separate individuals for the disposal of 81 units in Somerset Grand Fortune Garden. The property, a serviced residence property located in Beijing, was valued at Rmb628 million (approximately $128.1 million), has 221 units in total. The 81 units occupy a gross floor area of 15,780 square meters and has a remaining lease period of 55 years. According to the unaudited financial statements of Ascott REIT, the book value of the 81 units in Somerset Grand Fortune Garden is recorded at $48.2 million, as at 30 June 2013, and the sale will translate to a $79.9 million premium over book value. The sale proceeds will subsequently be used to finance future acquisitions. If the divestment had occurred in its last fiscal year, it would have increased Ascott REIT’s distribution and net asset value per unit to $0.0891 and $1.38 respectively, up from $0.0876 and $1.35.
Significance: In view of the increased difficulty in managing the property after commencement of a separate strata sales of 100 units of Somerset Grand Fortune Garden by a third party owner earlier on, the manager of Ascott REIT has decided on the divestment. However, the divestment is also an opportunity for Ascott REIT to lock in returns from the property as well as to restructure its portfolio by re-investing the net sales proceeds into higher yielding assets.
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