Month: November 2019

Crisis? What crisis? On 11 November 2019, DBS Group confounded investors by delivering a surprisingly better-than-expected 3^rd quarter financial results. Many investors had feared the worst for DBS Group share price due to the unfolding Hong Kong civil unrests, Singapore property cooling measures and the cuts in US Federal Reserves’ interest rates. Notwithstanding these challenges, the management navigated the storm relatively well and continued to post great results.

Question now is: will DBS Group share price recapture the height seen in 2018? Make no mistake, the slew of headwinds in 2019 had taken some shine off DBS Group share price as the market deals with the onslaught of uncertainties.

While DBS Group cannot control macro-economic conditions, the bank continued to power ahead with its business front. Compared to a year ago, total income for 3^rd quarter surged 13% to $3.82 billion while net profit stormed 15% to $1.63 billion. Interestingly, against the backdrop of declining US interest rates, DBS Group actually increased its Net Interest Margin (NIM) to 1.9% from 1.86% a year ago. Return on equity (ROE) also reached a high of 13.4%. Given such stellar results, where will DBS Group share price go from here?

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether DBS Group share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

DBS Group share price on ice and fire

According to a DBS Group article, Hong Kong millionaires are moving cash to Singapore. DBS private bankers were experiencing …

With an acronym like MUST, it seems like investing in Manulife US REIT will not go wrong. Indeed, the unit price had been surging from USD0.80 since the start of the year to the current USD0.94. Listed in May 2016, this REIT has a strong sponsor in Manulife Insurance Company, a leading Canada-based financial services group. Despite having a strong pedigree, it has not always been a bed of rose for this REIT.

Like many of its peers, Manulife US REIT unit price had been lacklustre in the initial year of listing. Looking back, the counter had been trading below its offering price of US0.83 per for most of 2016 and 2017. Then the unit price took on a life of its own when Temasek Holdings, through DBS Bank, increased its stake from 3.78% to 5.49% in July 2017. Subsequently, Manulife US REIT unit price enjoyed a splendid run, surging from US0.80 in July 2017 to hit a high of almost USD1.00 in February 2018. The bull run in unit price created plenty of wealth for unitholders.

However, in 2018, Manulife US REIT suffered a torrid run. This is because in that year, the US Federal Reserve raised interest rates by four times. Most REITs are heavily leveraged and Manulife US REIT is no exception. Therefore, the increase in interest rates meant higher interest expenses and affected the outlook for REITs’ growth. It didn’t help that the trade war between USA and China reached a peak in 2018. Being a pure-play US office REIT, Manulife US REIT was located at the epicentre and its unit price was hit left, right and centre.

To compound matters further, Manulife US REIT launched a preferential offering of USD0.865 per unit through issuance of 227,935,981 new units in June 2018. All these events combined …

What a calamity. Singtel share price looks set for a roller-coaster ride following a shocking 2^nd quarter loss amounting to $674 million. Yes, that’s right. It is net loss of $674 million, vis-à-vis $661 million of net profit recorded in 2QFY2019. The mind-blowing loss was attributed to Airtel’s exceptional item.

The latest result came on the back of an eighth consecutive quarter of declining profits/losses. Question now is: where would Singtel share price go from here?

I have been a big fan of Singtel for years but I could not recall the last time in which Singtel recorded such massive losses. To be honest I am totally speechless by the latest results. Given the latest development, there is a high possibility of Singtel share price reaching my entry price of $2.60 in the coming days.

According to Singtel’s media release, the telco’s subsidiary, Airtel was hit by an adverse Indian court ruling in relation to definition of “adjusted gross revenue” (AGR) for the Indian telco industry. Singtel share of the provision amounted to a whopping pre-tax $1.93 billion. The explosive loss would surely cause confidence in Singtel share price to be shaken.

Apart from the Airtel’s exception item, operating revenue also fell to $4.15 billion in 2QFY2020 from $4.2 billion in 2QFY2019. This is definitely one of the worst Singtel quarterly results, if not the worst, I have ever seen. In view of this, expect plenty of volatility for Singtel share price in the coming weeks.

Singtel share price faces destiny

Could Airtel really be the last straw that broke the camel’s back? I don’t know. This is because in 2018, I wrote an article, “Will Singtel share price be rocked by commercial disputes?” In that article, I shared that Singtel’s overseas adventure came at a price …

It’s official. 3QFY2019 results for OCBC showed that the Hong Kong protests did not rupture its businesses nor impact its growth. On the contrary, OCBC Hong Kong actually reported an 11% increase in net profit on year-on-year basis. In this regard, many investors must be able to sleep better at night. But is OCBC share price really out of the woods?

Despite taming the menacing fallout from the Hong Kong protests, there are signs that OCBC share price have peaked. In today’s context, it is unlikely that OCBC share price will hit the giddy high of $13.80 in 2018. The latest financial results revealed some hits and misses for the venerable bank. In this article, lets delve into the quality of OCBC 3^rd quarter earnings and the potential outlook for OCBC share price.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether OCBC share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

OCBC share price at cross-roads

In the stock market, confidence means everything. This is especially for bank stocks. In this regard, OCBC share price is currently facing headwinds caused by the cautious market sentiments and slowing Singapore economy.

While the unfolding Hong Kong protests had not inflicted any collateral damages to OCBC’s business momentum in Hong Kong, net profit declined 6% to $1.17 billion for 3QFY2019. The net profit was slightly higher than UOB’s $1.12 billion. But then again, OCBC had a lower net interest income of $1.6 billion and lower net interest …

Will unit price of Eagle Hospitality Trust blow up in pieces? Investors of Eagle Hospitality Trust look set for plenty of sleepless nights following more stunning revelations, which came straight after The Queen Mary fiasco. This time round, the management’s response to SGX queries on 1 November raised more concerns than assurance to investors. Why is that so?

Eagle Hospitality Trust initial asset portfolio consists of 18 properties, out of which 12 properties were owned by the Sponsor under its USHI Portfolio. The other 6 properties were from the ASAP6 Portfolio in which the properties were purchased from “third party ASAP6 Portfolio vendors”. The latest issue centred around the ASAP6 portfolio, and the information could provide a plausible rationale for the massive sell-offs by the big boys in recent months.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether Eagle Hospitality Trust unit price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Eagle Hospitality Trust massive sell-downs explained

In the prospectus, the identity of the “third party ASAP6 Portfolio vendors” was not revealed. Following SGX’s query, it was revealed that Eagle Hospitality Trust acquired the “ASAP6 Portfolio from the Sponsor which had acquired the ASAP6 Portfolio from ASAP prior to the Listing Date”. Although ASAP is not related to the sponsor nor Eagle Hospitality Trust, the owners of ASAP emerged as the largest unitholders of Eagle Hospitality Trust after IPO.

While I can agree that there is 100% no potential conflict of interest between the related parties, the …

What a bad start for a REIT that barely got listed for six months! Debut in SGX only in May 2019, US pure-play REIT is facing some sort of crisis lately. At the centre of the storm is an astonishing article by The Edge Singapore revealing toxic inspection reports and a letter from the City of Long Beach to Urban Commons, sponsor of Eagle Hospitality Trust. In that letter, it was alleged that Urban Commons failed to meet obligations under The Queen Mary ground lease to make certain repairs required under the lease agreement.

The Queen Mary is one of the 18 properties held by Eagle Hospitality Trust, with valuation of USD159.4 million. Only Holiday Inn Resort Orlando Suites Waterpark, with valuation of USD162.8 million, carries a higher valuation. In this regard, The Queen Mary is one of the key assets of Eagle Hospitality Trust and the loss of this asset would likely have significant impact to Eagle Hospitality Trust.

Eagle Hospitality Trust in dark chapter

The 23 October article by The Edge Singapore spooked the hell out of investors and sent the unit price spiralling out of control. The counter fell from USD0.65 to USD0.55, prompting the manager to swiftly seek clarification with the sponsor. Subsequently, the latter confirmed that “they are not in default on The Queen Mary ground lease and that The Queen Mary remains safe and structurally sound”. It was also clarified that the letter from city of Long Beach is a formal request for information and not a notification for default.

On 28 October 2019, it was further confirmed that the total repair costs for The Queen Mary amounted to USD7 million and that Urban Commons will be responsible for costs involved. For sure, USD7 million is a small amount. Even if the sponsor is …