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Stocks In Focus SG (SG PMI, CDL Hospitality Trusts, Tiong Seng Hldgs) – 04/12/13
Singapore’s PMI Above 50 But Below Expectations
• The purchasing managers’ index (PMI) in Singapore for November came in at 50.8, dipping 0.4 as compared to October. The readings fell short of seven median forecasts of 51.4 percent. The decrease was mainly attributed to dips in orders and output.
• Despite the decline in PMI, readings above 50 indicate that the manufacturing sector remains in expansion mode. This also represents the ninth time since the manufacturing sector has expanded.
• Singapore was not the only country who saw a pullback in PMI, Indonesia along with Vietnam have also registered a slight pullback in PMI.
Significance: In view of the stronger PMI readings from the North Americas and European economies, Singapore’s manufacturing sector is poised to perform better as it moves forward.
CDL Hospitality Trust Acquires Luxury Resort In Maldives
• CDL Hospitality Real Estate Investment Trust (CDLHT) has purchased a luxury resort, the Jumeirah Dhevanafushi which is located in Meradhoo Island, Gaafu Alifu Atoll, Republic of Maldives.
• The property was sold at US$59.6 million ($74.8 million) and will be fully financed with debt through the issuance of notes from its multicurrency medium term note programme. Upon completion of the acquisition. CDLHT’s debt to asset ratio is expected to be 30.6 percent.
• Opened in November 2011, the Jumeirah Dhevanafushi comes with 16 over-water villas and 19 beachfront villas with private pools, as well as a wide range of dining, leisure and spa options within the property. Two additional beachfront villas are expected to be completed in 2014 as part of the acquisition. Despite the ongoing re-development works, the property has raked in revenue per available room of US$754 in 9M13.
Significance: Along with the growing demand for tourism in Maldives, CDLHT is positioned to further benefit from Maldives’s buoyant hospitality sector as it strengthens its foothold with a second acquisition in Maldives in 2013. After the acquisition, on a pro-forma basis, distribution per cents would rise from $0.089 to $0.091, translating to a 0.2 percent increase in annualised distribution yield from 7.3 percent to 7.5 percent.
Tiong Seng Awarded $204.5m HDB Contract
• Tiong Seng Holdings via its subsidiary, Tiong Seng Contractors was awarded a $204.5 million contract from the Housing and Development Board (HDB).
• Under the contract, the company is required to construct 11 blocks of 14/16-storey residential buildings together with two blocks of multi-storey carparks, commercial/community facilities, precinct pavilion and an electrical substation at Woodlands Crescent and Woodlands Rise. The project is expected to be delivered progressively till FY16.
• Through the development of the Woodlands project, Tiong Seng will be applying its core competency of industry leading precast construction technology which could reduce the on-site labour requirement by as much as 30 percent.
Significance: This contract win will lift Tiong Seng’s order book to $1.3 billion and is a testament of the company’s construction capabilities, while it continues to strengthen its presence in the construction of public housing.
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