4 Quotes That Vividly Describe How Singapore’s Retail Might Never Be the Same Again
- Original Post from The Motley Fool Sg

Singapore’s retail scene may never be the same again.
It is not a secret that retailers in Singapore have been facing a tougher time over the past few years. There might be several reasons for this. To find out more details, I took time recently to dip into the annual reports of major retailers in Singapore. I wanted to figure out what the retail scene in Singapore looks like from the eyes of the major players.
What I found were some vivid descriptions of the challenges that retailers face.
1. The shift to online shopping continues – click here
2. Few retail segments will be left untouched – click here
3. Bricks and clicks
Metro Holdings Ltd (SGX: M01) also believes that consumers are increasingly shopping online. In its latest annual report, the retailer said:
“Prospects of our Singapore retail operations remain challenging, as supply of new retail space continues to grow while consumers’ shopping behavior shifted increasingly towards online.”
The firm is also moving to embrace an omni-channel approach where customers can shop online, and collect it in-store:  
“With this understanding, Metro has undertaken to transform ourselves, both in developing fresh concepts to entice consumers with better shopping experience, as well as to develop an omni-channel marketing strategy to meet the evolving needs of our customers and support a complete online-to-offline (O2O) user experience.”  
4. Gone with the wind
The theme is clear – status quo will not work. Suntec Real Estate Investment Trust’s (SGX: T82U) chief executive of the manager, Chan Kong Leong, provided this statement during his SGX kopi-C interview:
“Gone are the days when all you have to do is open the store and customers will walk in to buy.”
Suntec REIT is the owner of Suntec City which has a major retail component. Chan added another interesting perspective on physical assets:
“The mall operates from 10am to 10pm. In other words, the asset sleeps when we do. But physical concrete doesn’t need rest, so the question is how do we raise utilisation rates during those periods?”
Increasingly, physical store retailers will have to figure out new ways to make full use of its existing assets, or risk being swept away by change.
$Metro(M01.SI) $SGX(S68.SI) $Suntec Reit(T82U.SI)

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3 Things You Need to Know About the Singapore Stock Market Today
- Original Post from The Motley Fool Sg

Hello, everyone. Here are three things about the local stock market and investing in general that you might be interested in today.
1. The Straits Times Index (SGX: ^STI) ended Tuesday at 3,543.2, inching down 0.1% or 5.1 points.
Venture Corporation Ltd (SGX: V03) lost the most ground in the 30-stock index as its shares tumbled 2.7% to S$21.17.
On the other hand, the biggest winner of the lot was Jardine Matheson Holdings Limited (SGX: J36); the conglomerate’s shares increased 3.1% to US$64.87.
2. The National Stock Exchange of India (NSE) has made an application in the Bombay High Court for an interim injunction on Singapore Exchange Limited’s (SGX: S68) new India equity derivative products. This was announced slightly after the stock market opened today.
The local bourse operator had earlier made public its plans to list the new derivative products in June 2018.
Singapore Exchange (SGX) said that it has full confidence in its legal position and “will vigorously defend this action”.
Michael Syn, the exchange’s head of derivatives, commented:
“SGX has a responsibility to provide risk management tools for our global clients and ensure there is no disruption to the marketplace. Our new India equity derivative products are essential to enable institutional investors to maintain their current portfolio risk exposure to the Indian capital markets. We have, from the onset, expressed to NSE that there is a need to maintain liquidity in the international India equity derivatives market, in order to connect international participants to GIFT IFSC. We remain open to working with NSE and other relevant stakeholders to develop a solution that meets the risk management needs of global market participants.”
For the day, SGX shares fell 2.1% to S$7.48.
3. The global rubber glove industry is expected to grow at a rate of 8% to 10% annually over the next few years. With several established rubber glove manufacturers listed in Singapore and Malaysia, what are some of the things to look out for when investing in such companies? Fellow Motley Fool contributor, Jeremy Chia, shares more here.
$STI(^STI.IN) $SGX(S68.SI)

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Institutional Investors Have Been Buying These 3 Stocks
- Original Post from The Motley Fool Sg

There are many ways to find investment ideas. Some useful methods are to screen for stocks or to look at a list of stocks near their 52-week lows to sieve out potential bargains. Studying what institutional investors have been buying or selling is another avenue.
Institutional investors are typically large investment organisations, such as hedge funds, mutual funds, unit trust companies, sovereign wealth funds, insurance companies and so on. These investors tend to possess vastly greater resources than individual investors like you and me when researching stocks. Hence, it may be useful to keep a close eye on what they are doing, as a way to generate ideas.
In this article, I will look at three Singapore stocks (among the top ten stocks) that have seen the highest net purchases in dollar value by institutional investors in for the week ended 27 April 2018. They are: Keppel Corporation Limited (SGX: BN4), Singapore Exchange Limited (SGX: S68), and Singapore Telecommunications Limited (SGX: Z74).

Source: Singapore Exchange; SGX Stock Facts
Keppel Corp is one of the Singapore stock market’s largest conglomerates. It has four major business segments: Offshore and Marine; Property; Infrastructure; and Investment. In the past few years, Keppel Corp has seen its business results deteriorate, mainly due to the decline in oil prices that started in 2014. Recently, however, the company has displayed signs of a turnaround in its business.
For 2018’s first quarter, Keppel Corp reported that its revenue was up by 17.8% year-on-year to S$1.47 billion. Its net profit attributable to shareholders did even better, rising by 33.7% year-on-year to S$337.5 million. Similarly, earnings per share was up 34% to 18.6 cents. The conglomerate’s growth was driven by strong performances in its Property and Infrastructure divisions.
In addition to the higher top line and bottom line, Keppel Corp improved its balance sheet; as of 31 March 2018, it had a net debt position of S$5.1 billion, down from S$7.1 billion a year ago. Moreover, the Offshore and Marine segment’s net order book (exclude Sete Brasil orders) grew on both a year-on-year and sequential basis. The net order book ended 2018’s first quarter at S$4.3 billion, up from S$3.5 billion at 2017’s first quarter, and from S$3.9 billion as of 31 December 2017.
On Keppel Corp’s prospects for the rest of the year, the company’s CEO, Loh Chin Hua said:
“Markets have been roiled in recent weeks by concerns over rising trade tensions between the US and China as well as the situation in the Middle East. However, the global economy continues to enjoy broad-based growth, with improved business sentiments in both advanced economies and emerging markets. Strong urbanisation trends continue to present many opportunities for the Keppel Group across our businesses.”
The next company on the list, Singapore Exchange, is a company many investors in Singapore are likely to be familiar with, since it actually runs the only stock exchange in town.
In a similar manner to Keppel Corp, Singapore Exchange also delivered a strong earnings update for the first quarter of 2018 (the quarter is the company’s third fiscal quarter).
In the quarter, Singapore Exchange experienced a 9.6% year-on-year increase in revenue to S$222.2 million, and a 21.0% jump in profit attributable to shareholders to S$100.5 million. As of 31 March 2018, the company had S$800.0 million in cash on the balance sheet and no debt; the balance sheet had strengthened from a year ago when there was S$739.4 million in cash and no debt. An interim dividend of S$0.05 per share was also declared, unchanged from a year ago,
Singapore Exchange’s chief executive, Loh Boon Chye, shared some comments on the performance in the earnings update:
“We achieved a strong set of results this quarter, with our net profit reaching a new 10-year record high and our revenues hitting their highest levels since we listed in 2000. We actively engaged liquidity providers and focused on outreach to investors, which contributed to increased activity in the securities market. Our marketing efforts, together with longer trading hours enabled by our new derivatives trading and clearing platform, added to an increase in global participation across products and trading sessions.”
On its future, this is what Singapore Exchange had to say:
“With improved global growth, more central banks are seen adopting tightening measures, which will lead to investors rebalancing their portfolios. We expect market activity to improve as investors seek avenues to manage their portfolio risk. Looking forward, we will continue to build on our multi-asset offering and increase our servicing and marketing efforts across our domestic and international client base. We will also strengthen our global network through strategic partnerships and alliances.”
Lastly, we have Singtel, the biggest operational telco in Singapore. Incumbents in the local telco market has come under significant pressure in recent times. And that’s before the fourth telco, the Australia-based TPG Telecom, launches its service here in the second half of 2018 after winning the bid for Singapore’s fourth telco license in December 2016.
In the first quarter of 2018 (Singtel’s fiscal fourth quarter), the telco delivered a mixed performance. Although operating revenue inched up by 0.4% year-on-year to S$4.33 billion, net profit was down by 19.0% to S$781 million. Even after stripping away one-time items, Singtel’s underlying net profit still declined by 17.9% year-on-year to S$807 million. The good thing is that Singtel’s free cash flow for the quarter had increased by 4.8% year-on-year to S$1.34 billion.
The telco also declared a final dividend of 10.7 cents per share (unchanged from a year ago) to bring the total ordinary dividend for its fiscal year to 17.5 cents (again unchanged from the previous year).
Looking ahead, Singtel expects the following:
1) Revenue growth in the “low single digit”;
2) No growth in EBITDA (earnings before interest, taxes, depreciation, and amortisation);
3) Capital expenditure of S$2.2 billion;
4) Free cash flow of around S$1.9 billion;
5) Dividends from regional associates of around S$1.4 billion;
6) To maintain its dividend at 17.5 cents per share for the next two financial years before reverting to a dividend policy of keeping its payout ratio to between 60% and 75% of its underlying net profit.
Looking at what institutional investors are doing could be a useful tool in your toolkit when sourcing for investment ideas. But do note that the information presented here is by no means a recommendation to take any action on the stocks mentioned. Instead, it should be viewed only as a useful starting point for further research.
$Keppel Corp(BN4.SI) $SGX(S68.SI) $SingTel(Z74.SI)

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What Investors Should Know About Suntec Real Estate Investment Trust’s Latest Earnings and Valuation
- Original Post from The Motley Fool Sg

Suntec Real Estate Investment Trust (SGX: T82U) is one of the largest REITs in Singapore and currently has interests in retail malls and offices in Singapore and Australia. Its portfolio includes Suntec City, a one-third interest in One Raffles Quay, commercial buildings in Australia, and more.
There are two things about the REIT that investors may want to know about right now: Its latest financial performance and valuation.
Financial performance
The table below shows important items from Suntec REIT’s income statement for the first quarter of 2018:

Source: Suntec REIT 2018 first quarter earnings presentation
We can see that the REIT enjoyed a decent quarter. There was low single-digit growth in gross revenue, net property income, distributable income, and distribution per unit. Suntec REIT attributed its higher gross revenue and net property income to higher contributions from Suntec Singapore and Suntec City Mall, which offset lower contributions from the office component of Suntec City.
As of 31 March 2018, Suntec REIT clocked in a gearing ratio of 35.2%, which is a safe distance from the regulatory gearing limit of 45%. Meanwhile, its occupancy rate stood at 99.1% and 98.4%, respectively, for its office and retail portfolios.
Valuation
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows Suntec REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.

Source: SGX Stock Facts
We can see that Suntec REIT has a lower PB ratio than the market, but a less attractive distribution yield.
$Suntec Reit(T82U.SI)

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Suntec Real Estate Investment Trust Reports Higher Distributions For The First Quarter of 2018
- Original Post from The Motley Fool Sg

Listed back in 2004, Suntec Real Estate Investment Trust (SGX:T82U) is one of the oldest REITs in the Singapore market. Its portfolio consists of commercial/retail real estate in Singapore and Australia, including its namesake, Suntec City, a 60.8% interest in Suntec Singapore Convention & Exhibition Center, and a one-third interest in One Raffles Quay, among others.
Last week, Suntec REIT released its results for the first quarter of 2018. Here are 10 important takeaways:
1. Gross revenue grew 2.6% from the same period a year ago to S$90.7 million, while net property income was up 1.9% to S$63.0 million.
2. Distributable income grew 4.8% to S$64.8 million and distribution per unit (DPU) inched up by 0.3% to 2.433 Singapore cents.
3. The growth in the REIT’s DPU was due to higher contributions from Suntec Singapore and Suntec City Mall that were partially offset by higher financing costs and lower income from joint ventures.
4. There was a 6.5% decline in income from joint ventures because of lower contributions from One Raffles Quay. The property had enjoyed a one-off gain in 2017’s first quarter that was absent in the reporting quarter.
5. As of 31 March 2018, Suntec REIT had total assets of S$9.2 billion and liabilities of S$3.5 billion. It therefore had net assets of S$5.6 billion, an improvement of 2.3% from 31 December 2017. However, its adjusted net asset value (NAV) per unit decreased by 1.8% to S$2.08.
6. With total debt of S$3.27 billion, the REIT had an aggregate leverage of 36.6% (including share of borrowings of joint ventures) at the end of 2018’s first quarter. As a reminder, REITs in Singapore have a regulatory leverage ceiling of 45%. The REIT also ended 2018’s first quarter with an all-in financing cost of 2.73%, interest cover of 3.8 times, and with 65% of its debt either on fixed rates, or hedged.
7. Suntec REIT’s office portfolio occupancy stood at 99.1% as of 31 March 2018, with the tenant retention rate at 88%. The office portfolio had a weighted average lease expiry (WALE) of 3.62 years, with only 9.0% of office leases expiring for the rest of 2018.
8. Meanwhile, the REIT’s retail portfolio had an occupancy rate of 98.4%, and a tenant retention rate of 71%. The retail segment had a WALE of 2.22 years, with 21.1% of net lettable area expiring later this year.
9. Suntec REIT’s Manager also gave an update on the REIT’s two major development projects. Firstly, 9 Penang Road in Singapore (formerly Parklane Mall) is in the process of building its steel super structure, and is scheduled to be completed by the end of 2019. Secondly, its development of Olderfleet, 477 Collins Street in Australia is also in progress; the property is scheduled for completion by mid-2020.
10. On Suntec REIT’s outlook, the REIT’s Manager said that they would continue to be proactive to maintain a high occupancy rate in the REIT’s portfolio, and strengthen its office proposition. On the REIT’s retail front, the Manager said that they would continue to enhance the shopping experience, increase asset utilisation, and strengthen key operational indicators such as occupancy, footfall, and tenant sales.
11. At the time of writing, units of Suntec REIT are trading hands at S$1.93 each. This translates to a price-to book ratio of 0.927, and an annualised distribution yield of 5.04%.
$Suntec Reit(T82U.SI)

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The Good And Bad That Investors Should Know About Singapore Exchange Limited’s Latest Quarterly Earnings
- Original Post from The Motley Fool Sg

Stock exchange operator Singapore Exchange Limited (SGX: S68) reported its third quarter earnings update for its fiscal year ending 30 June 2018 (FY2018) two weeks ago. There are both positive and negative takeaways that investors may want to learn about.
The positives
Firstly, Singapore Exchange’s total operating revenue grew by 10% year-on-year to S$222 million (the highest level since the company’s listing), driven by growth in its Equities and Fixed Income, and Derivatives segments. Similarly, Singapore Exchange’s quarterly net profit hit a 10-year high of S$100 million, up 21% year-on-year.
Secondly, the company’s operating expenses grew at a slower pace than revenue for the quarter. As a result, Singapore Exchange’s operating profit increased faster than revenue on a year-on-year basis, up by 15% to S$118 million.
Thirdly, operating cash flow for the reporting quarter jumped by 28.7% from S$101.4 million a year ago to S$130.4 million. The increase in Singapore Exchange’s profit was the main driver for the higher operating cash flow.
Last but not least, Singapore Exchange continued to maintain a strong balance sheet. As of 31 March 2018, the company had S$800 million in cash on the balance sheet with no debt.
The negatives
Singapore Exchange had delivered a positive overall performance for the quarter. Yet, there are two negative points that investors should know.
Firstly, the Post Trade Services  sub-segment of the Equities and Fixed income business saw its revenue decline by 11% year-on-year to S$25.6 million. Singapore Exchange attributed the decline to a change in the mix of securities settlements, and a lower number of contracts processed as brokers had migrated the function to their own back offices.
Next, the Market Data and Connectivity segment experienced a 2% fall in revenue to S$23.9 million as an 8% fall in revenue at the Market Data sub-segment (to S$10.0 million) was only partially offset by a 2% increase in the Connectivity sub-segment’s revenue (to S$13.9 million).
$SGX(S68.SI)

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