SG Wealth Builder

Sign up for only $19.99! COVID-19 has ravaged the entire global financial markets and upended numerous industries. To tackle the massive fallouts, US Federal Reserve pull out all stops to contain the explosive impacts of this unprecedented black swan event in modern days.  Arising from this interest rates has plummeted to abysmal levels yet again, leading to “cash is trash”. Against such backdrop, the interest rate of SGX Securities Borrowing and Lending (SBL) program could be lucrative.

How does SGX Securities Borrowing and Lending (SBL) work? In Singapore, investors can either lend their existing shares to brokerage firms or SGX. By lending out shares, they can earn interest fees. Conversely, investors can also borrow shares to do short-selling. In the course of doing so, you need to pay borrowing fees.

In this article, I will provide my insights on the pros and cons of lending shares to SGX Securities Borrowing and Lending (SBL) program. Something that needs to be highlighted is that this article will touch on only the lending program of SBL. As I am not into short-selling activities, the borrowing facility of the SBL is not covered in this article.

Disclaimer for this article: SGX did not pay me to write this article nor am I promoting SGX Securities Borrowing and Lending program.

Sign up for only $19.99! It is a battle that SIA cannot afford to lose. Currently, SIA share price is fighting for its life as COVID-19 completely razed air travel to the ground. With numerous airlines expected to file for bankruptcies in the coming months, many analysts claim that the aviation sector may never recover to the pre-crisis level. This is indeed the darkest chapter for SIA share price.

SIA share price faces brutal meltdown

SIA share price to rock or melt with Special Share?

SIA share price crashed into wall

SIA share price nearing 20-year low

SIA share price in crisis mode

For sure, the coming announcement of the full-year financial result and the mega rights issue will be a massive baptism of fire for SIA share price. Indeed, the next two weeks will be critical as the national carrier navigates through this crazy storm. In view of this, expect plenty of volatility for SIA share price.

The current crisis completely dwarfed previous crises such as the Asian Financial Crisis of 1998, the dotcom bust in 2000, 9/11 terrorist attacks of 2001, the SARS of 2003 and Great Financial Crisis of 2008. In each of those crises, SIA share price had always managed to bounce back in impressive form.

Sign up for only $19.99! What a roller coaster ride for investors! COVID-19 pandemic crisis had ignited one of the biggest equity sell-offs in modern history as investors fled for their lives. The Straits Times Index (STI) plunged by a terrifying 17% to reach the abysmal level of 2,208, a level last seen in June 2009. Being one of the leading lights of STI, OCBC share price was not spared from the carnage.

OCBC share price in devastating bloodbath

OCBC share price to increase three-fold in decade?

OCBC share price led to my first investment in decade

But what made this crisis so extra-ordinary is that it coincided with the oil slump. It is reported that OCBC, DBS and UOB collectively faced with loan exposure of $600 million to embattled oil trader, Hin Leong Trading. As a result, OCBC share price took a beating in recent days. As the double whammy crises unfold, expect plenty of volatility for OCBC share price.

Since 23 March 2020, OCBC share price had recovered from a low of $7.80 to reach the current $8.80 level. The recovery was due to improved market sentiments following the massive US’ two trillion dollar stimulus package. Nevertheless, I am hesitant to claim that OCBC share price has reached a bottom.

Note: This article has been edited to incorporate clarifications from KIT.

Sign up for only $19.99! Will Singapore’s largest infrastructure business trust, Keppel Infrastructure Trust (KIT share price), be the last man standing? Amid the violent upheaval in the stock market, it seems that KIT share price will fight to the very end.

On 10 March 2020, I wrote that KIT share price would be stung by the collapse of the oil price. Indeed, the following day, KIT share price collapsed from $0.51 to reach a crazy low of $0.36 on 19 March 2020. The meltdown prompted the management to conduct shares buyback to halt the collapse of KIT share price. By 3 April 2020, 4.75 million of KIT shares had been repurchased.

KIT share price safe haven from virus?

KIT share price to suffer same fate as Hyflux?

Previously, I have pointed out that KIT share price has a strong correlation with oil price because it owns one power-plant, Keppel Merlimau Cogen (KMC) Plant, which has been making huge losses since the start of the oil slump in 2014. For full-year 2019, losses before tax for KMC amounted to $40 million, an increase from $33.6 million in last year.

KIT management has clarified that oil price fluctuations has no bearing on the performance of the Keppel Merlimau Cogen (KMC) plant.

The unfolding COVID-19 has claimed the first S-Reit casualty in Eagle Hospitality Trust. Which will be the next one? In view of the plunging Lippo Malls share price over the course of last month, investors must be living in fear. Looking back, Lippo Malls share price was actually cruising along finely in 2019 with the strengthening of Indonesian rupiah until COVID-19 came along to mess things up.

Year-to-date, Lippo Malls share price plummeted by a whopping 52%, making it one of the worst SGX stocks to own. Apart from COVID-19, what could be the other dark forces behind the meltdown of Lippo Malls share price? In my view, besides macro factors, it is also important to pay attention to the business fundamentals because that will shape Lippo Malls share price even in the midst of market chaos.

Temasek Holdings lost its pants in Lippo Malls Indonesia Retail Trust?

Lippo Malls Indonesia Retail Trust in dark chapter

Nightmare of Lippo Malls Retail Trust

With effect from 1 April 2020, all of LMIR Trust’s portfolio of 23 retail malls and seven retail spaces will be temporarily closed except for essential services. The period of closure will be for a minimum of two weeks till 14 April 2020.

It seems that hell has a special place for SIAEC share price. The coronavirus outbreak imploded out of nowhere to cause the entire aviation industry to come to a grinding halt, leading global airlines to ground their fleets. The latest government order to close down workplaces (except for essential services) in Singapore will further roil SIAEC share price to no end.

SIAEC share price and ST Engineering in bizarre tale

SIAEC share price in bloodbath with Temasek Holdings

Year-to-date, SIAEC share price plunged by a staggering 44%. This made SIAEC share price one of the biggest falling stars among the SGX shares. Against this backdrop, investors must be having plenty of sleepless nights and wonder if SIAEC share price will recover from this nightmarish run. The coming full-year financial result will be a litmus test for SIAEC share price as the MRO stalwart navigates through this dark chapter of aviation.

The grounding of aircraft among global airlines will hurt SIAEC’s MRO business and dented SIAEC share price. From a technical point of view, when an aircraft is grounded, a large portion of the maintenance works which are based on interval of flight hours or flight cycles need not be carried out.

Crisis? What crisis? SGX share price laughed off talks of impending recession as it turned bullish amid the ongoing virus outbreak. Traditionally, SGX share price is not a safe haven against crises but volatility in the stock market is good for stock market operators like SGX because of the increased in revenue from clearing fees.

In fact, if you purchased 1000 shares of SGX shares in November 2000 and held it till now, the returns would be an incredible 588% based on current SGX share price of $9.22. I don’t know which stock that had generated so much returns for investors and is not affected by the current coronavirus.

Even more bizarrely, SGX share price actually benefitted from the ongoing crisis as market turnover for equities and exchange-traded funds jumped 44% and 245% respectively in February. The market volatility also saw increased interest in daily leverage certificates and structured warrants. The number of monthly active participants climbed 55% year-on-year, while the outstanding value of leveraged products held surged three-fold.

SGX share price in sparkling form after reporting highest profit in 11 years

Bonds to the rescue for SGX share price

Indeed, coronavirus had destroyed thousands of lives and upended various industries.

Is the worst over for SIA share price? In all honesty, I don’t know. At this point of writing, the number of people infected by COVID-19 stood at 784,000 and number of deaths amounted to 38,000. The epic USD2 trillion stimulus package by US government had provided some boost to the stock market. But whether this is a sustainable run or just a bull trap remains to be seen. In this regard, is this a false dawn for SIA share price?

SIA share price to rock or melt with Special Share?

SIA share price crashed into wall

SIA share price nearing 20-year low

SIA share price in crisis mode

Indeed, the devastating COVID-19 has brought the entire aviation industry to its knee and roiled SIA share price to no end. With border controls tightening around the whole world, the national carrier is forced to cut its flight capacity by a staggering 96%. In the early days, I predicted a V-shape recovery for SIA share price using 2003 SARS as point of reference. But it seems that I had grossly underestimated the impact of COVID-19.

With so many aircraft grounded, the airline could be facing cash flow issue in the coming months.

The unfolding coronavirus is a complete disaster out of nowhere. Not only has the virus rocked the global markets, it has also brought the entire aviation, hospitality and tourism sectors to a complete standstill. Being a player in the US hospitality sector, Eagle Hospitality Trust is not spared from the carnage. But what made the crisis at Eagle Hospitality Trust so extraordinary is that within a year of listing in SGX mainboard, this REIT had been dogged by various negative publicity.

Eagle Hospitality Trust to blow up in pieces?

Eagle Hospitality Trust to swim or sink with Temasek Holdings?

In November 2019, The Edge Singapore revealed 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.

Since that episode, the unit price of Eagle Hospitality Trust spiralled out of control, falling from USD0.70 to USD0.50. Amid the outbreak of the coronavirus, the unit price got bombed out to reach the abysmal level of USD0.14. But this is not all.

The once-in-a-century pandemic crisis has sparked a meltdown in SIA share price. Over the decades, SIA share price had endured the threats from Asia Financial Crisis (1997), 9/11 terrorist attacks (2001), SARS (2003) and the Great Financial Crisis of 2008). But the current COVID-19 crisis is unprecedented and provide a formidable challenge for the national carrier.

SIA share price crashed into wall

SIA share price nearing 20-year low

SIA share price in crisis mode

It seems that SIA share price is forced into a corner as various countries imposed travel restrictions and lockdowns to curb the spread of the virus. On 22 March 2020, Singapore government barred all short-term visitors from entering or transiting through Singapore. The latest measure will be the final nail in the coffin for SIA share price.

The slew of border control restrictions had led to SIA cutting flight capacity. At this point of writing, SIA Group had slashed 96% of its capacity till end April and grounded 138 of its parent and SilkAir aircraft. The latest development is pushing SIA share price to the edge of the cliff.

Given the grim outlook for SIA share price, will Singapore government intervene? Being the pride of our nation, Singapore Airlines is definitely a strategic asset that we cannot afford to lose.

Is this the beginning of the end for SIA share price? Amid the global coronavirus outbreak, SIA share price plummeted to new lows not seen even during the SARS period in 2003. During the SARS period, SIA had also cut flight capacity and put staff on no-pay leave. Even so, SIA share price did not drop below $8.00. Given that the number of Covid-19 infections have yet to peak, how low will SIA share price go?

In a reminder of how dreadful the situation is, Singapore budget airline, Jetstar Asia had grounded its entire fleet while Singapore Airlines cuts capacity by half. At Price/Book Value of just 0.65, SIA share price is currently trading way below its book value. But before you go bargain hunting, beware of catching a falling knife.

SIA share price nearing 20-year low

SIA share price in crisis mode

Amazingly, during the SARS of 2003, SIA still managed to clock in a decent amount of profits. But this time round, I expect SIA to book its first ever annual loss due to the rapid shut down of every major market by governments in a bid to stop the infection spread. Thus, expect a massive bout of meltdown in SIA share price, possibly to $2.00 in the coming days.

In my whole life, I have never seen such chaos in the financial market. No, not even during the Great Financial Crisis of 2008. In 2020, Dow Jones had collapsed from a high of almost 30,000 points to a low of 20,000 points within the span of only a month. Sure, Dow Jones had also collapsed by 7000 points but that was over a period of 16 months (from October 2007 to February 2009). Given the speed and magnitude of the correction, the current crisis of confidence is unprecedented. Against this background, even Singtel share price suffered nuclear meltdown.

Singtel share price to swim or sink with coronavirus?

Singtel share price in double trouble

Year-to-date, Singtel share price had tanked 25%. In fact, Singtel share price has reached my previous target entry price of $2.60. However, my view is that the market has not reached a bottom yet. With the unraveling virus outbreak, there is too much market fear at the moment. In this regard, there is high possibility that Singtel share price may even breach the $2.00 support level and reach a low of $1.50.

Of course, it will be a real nightmare if Singtel share price really plunge to $1.50 because that will wipe off billion dollar worth of valuation from Singtel share price.

On 15 March 2020, US Federal Reserves held a second emergency meeting to slash interest rates to near zero and announced quantitative easing measures to contain the fallout from the coronavirus.  The stunning move is expected to impact local bank stocks like UOB share price in the coming days.

All hell broke loose for all three local bank stocks as COVID-19 unleashed the biggest financial storm in more than a decade. As one of the Strait Times Index (STI) heavyweights, UOB share price is not spared from the bloodbath carnage. At the point of writing, UOB share price had plunged by a staggering 26% while DBS stock slipped 27% and OCBC shed 20% year-to-date.

UOB share price in royal rumble with DBS and OCBC

UOB share price fought back after bizarre plunge

Being the only family-owned and family-managed bank in Singapore, UOB is controlled by the Wee family. During the financial pandemic of Great Financial Crisis 2009, veteran banker Wee Cho Yaw was still at the helm. Now, his eldest son, Wee Ee Cheong is holding the fort. Will UOB share price be able to fight against the gravitational pull of the virus pandemic?

Amid the unfolding coronavirus, UOB management decided to press the panic button by launching a series of shares buyback activities.

2020 will go down in history as one of the most terrifying years for investors as the stock markets plunged into total chaos amid the coronavirus outbreak. DBS is the largest lender in Singapore, so investors will always examine DBS Group Holdings share price to gauge the health of the economy. But question now is: will the second stimulus package from Singapore government be timely enough to salvage the situation?

DBS Group share price in dark chapter with virus

DBS Group Holdings share price ambushed by coronavirus?

At the point of writing (12 March 2020), DBS Group Holdings share price had tumbled 23%, much higher than the 17% correction for OCBC share price. The huge correction of DBS Group Holdings provided clear signal that recession should be on the way for Singapore.

But of more chilling revelation is the stunning oil price war. As the biggest lender in Singapore, DBS bank has substantial exposure to the oil and gas sector. Due to this, DBS Group Holdings share price had plunged from a high of $21 in 2015 to an abysmal low of $13 in 2016, the peak of the oil slump.

Certainly, the operating climate had turned massively dark and sombre as World Health Organization finally declared coronavirus as pandemic on 12 March 2020.

9 March 2020 would be remembered as one of the darkest days in financial world as global stock markets plunged into chaos following Saudi Arabia’s oil price war against Russia. Being one of the leading lights of Straits Times Index (STI), OCBC share price was not spared from the carnage.

OCBC share price collapsed following the epic announcement of the oil fall-out, breaching the support level of $10.00. Prior to the correction, OCBC share price had been hovering between $10.50 to $11.00. As one of the largest lenders to the oil and gas companies in Singapore, the latest blow from the oil saga knocked the wind out of OCBC share price.

OCBC share price to increase three-fold in decade?

OCBC share price led to my first investment in decade

Question now is whether OCBC share price will fall to $7.00? The last time that OCBC was trading at $7.00 was only in 2016, the peak of the oil price slump of 2014. So the nightmare scenario of OCBC share price free falling to $7.00 could be a possibility in the coming months. This is especially so given that the latest oil price war came on the back of the unfolding coronavirus outbreak.

The coronavirus outbreak has roiled the stock market as investors run for their lives. For sure, numerous countries all over the world are facing the real prospect of drastic economy slow-down. Retrenchments will surge and consumer spending will turn cautious. Yet despite all these, people still need water and electricity to carry on their daily lives. Being the largest infrastructure business trust in Singapore, is Keppel Infrastructure Trust (KIT share price) immune to the virus?

Before investors get carried away and buy into KIT share price, it is important to understand the business fundamentals of the company first. As a matter of fact, KIT share price had been very resilient despite the wave of challenges it encountered in recent years. But investing in business trust requires a different approach as compared to buying shares. Beside entering at the right KIT share price, you need to assess the factors that may affect the distributions.

In 2018, KIT share price had been affected by the challenging electricity market and a dispute of its subsidiary, Basslink, with the Australian government agency Hydro Tasmania over a 2015 power outage. There were also much uncertainties relating to the operational performance at SingSpring Desalination Plant because of the developments at embattled Hyflux.

What a perfect storm for SIA share price! Amid the coronavirus outbreak, SIA share price plunged to $8.00, a level not seen during the dark days of the Great Financial Crisis in 2009. To put things into perspective, even during the SARS in 2003, the lowest point for SIA share price was $8.30. And that was 2003. If you factor in the inflation rate, the present SIA price reflected how badly the national carrier had been hit by this black swan event.

SIA share price in crisis mode

SIA share price in moment of madness

Will SIA share price plummet to $7.50, the level it was trading in 2001? That was the period when US suffered the 9/11 terrorism attacks. On the basis of the current run of SIA share price, it seems like so. The reason for the difference between 2003 and the current situation is that the China traveller market had become a major revenue contributor for the SIA Group. Given that China is at the epicentre of the outbreak, SIA’s business is impacted for sure.

Another reason why SIA share price is in for a huge bout of volatility is the fact that the coronavirus is much more infectious than SARS.

Having worked in the aviation sector for 15 years, I have covered many aviation companies listed in SGX extensively. The only exception is China Aviation Oil (CAO). This S-chip made the headlines for all the wrong reasons in 2004 when the former CEO made a stunning USD550 million loss in derivatives trading. Time flies. China Aviation Oil had recovered from that dark chapter and CAO share price went from strength to strength.

Not many S-chips were able to bounce back from corporate governance scandal on such scale. So investors must be counting their blessings that CAO share price did not fall into the abyss. Currently, China Aviation Oil even boasts former Minister of State, Teo Ser Luck, as one of its board members.

The reason for the swift recovery of CAO share price over the years was due to strong support from both China and Singapore government. CAO is Asia-Pacific’s largest physical jet fuel trader and commands a monopoly in imported jet fuel for China’s civil aviation industry. Because of this, a collapse of China Aviation Oil would be disruptive to China’s airline operations. In addition to this, Temasek Holdings had also shown support through an equity stake to halt the meltdown of CAO share price back then.

In the final week of February 2020, Genting Singapore share price finally caved in, falling from $0.87 to $0.82. The reason for the fall was of course due to the horror plunge of Dow Jones in that week. Being part of the STI, it is no surprise that Genting Singapore share price turned bearish. But what is astonishing to me is that this counter had remained quite resilient in the face of the numerous headwinds the company faced.

Prior to the outbreak of the coronavirus, Genting Singapore share price had been grappling with the surprise increase in higher casino tax by 2022 and 50% increase in casino entry levies for Singaporeans and PRs effective 4 April 2019.

It didn’t help that the trade war between US and China had lasted longer than expected. The fallout from the bitter war is the possibility of Chinese high-rollers unable to repay their gambling debts. As a result of the above two major headwinds, Genting Singapore share price fell from a high of $1.40 in late 2017 to the current $0.82 level. Despite the challenges, it appears to me that Genting Singapore share has found a strong support level at $0.80.

Looking back, OCBC share price had risen more than two-fold since 2009. But a series of unfortunate events had combined to knock the wind out of OCBC share price. Will the coronavirus prolong the suffering of investors? In my frank opinion, whilst there are significant challenges in the short-term, the long-term outlook for OCBC is still good.

As a bank stock, I have always maintained that OCBC share price is volatile even in peace times. So it is important for investors to set an entry and exit price. Previously, I have shared that I entered this counter at $11.00. Obviously with the onset of the virus, OCBC share price had turned bearish. But I am not losing sleep because I am convinced that I am investing in a great piece of business at a reasonable market price.

On 21 February 2020, the management released a set of excellent results for full year 2019. Net profit rose to a record of $4.87 billion. Net interest income increased 7% to a new high of $6.33 billion while net interest margin (NIM) rose to 1.77%. Return on equity (“ROE”) of 11.4% for FY19 was marginally below 11.5% in FY18.

Virus? What virus? Sheng Siong share price shrugged off all talks of coronavirus impacts on its stock by staging one of the most powerful rally in years. It certain seems that the sky is the limit for Sheng Siong share price.  The initial onset of the coronavirus saw Singaporeans scrambling and hoarding food items at supermarkets. The mad scramble sent Sheng Siong share price soaring like crazy. As of 20 February 2020, Sheng Siong share price smashed a record high of $1.32.

Given the bullish form of Sheng Siong share price, investors must be smiling to themselves. Since IPO in 2011, Sheng Siong share price had stormed from $0.33 to the current $1.30 level. Investors should be laughing all the way to the bank because of the huge capital appreciation and the consistent dividend pay outs.

Sheng Siong share price on super bull run!

Rampant Sheng Siong share price on magical run

To be frank, the supreme form of Sheng Siong share price confounded me. Previously, I had some reservations about investing in this counter because it was listed only in 2011 – the post Great Financial Crisis era. Due to this, there is a lack of track record on how Sheng Siong share price will perform during crisis times.

Is this the beginning of the end for DBS Group share price? On 13 February 2020, DBS Group finally unveiled it’s much anticipated fourth quarter results. Being the largest bank in Singapore, investors look to the bank’s FY2019 performance to gauge the outlook for DBS Group share price in FY2020. Many investors are also concerned whether the coronavirus outbreak will cast a dark shadow on DBS Group share price.

As the saying goes, past performance is not an indicator for the future. This is especially so, given that the latest financial result covers the performance of DBS Group until 31 December 2019 (the first reported case of coronavirus in Singapore was 23 January 2020). So investors will not be able to assess the impact of the coronavirus on DBS Group share price based on the latest financial result.

Good financial result for FY2019

In spite of the above, DBS Group recorded yet another stellar financial performance – full year net profit rose 14% to a record $6.39 billion. To celebrate the achievement, DBS Group proposed a final dividend of $0.33 per share. The annualised dividend will be $1.32 per share, representing an increase of 10%. The good news gave investors something to cheer about and lifted up the mood for DBS Group share price, which increased from $25.25 to $25.50.

With the onset of the coronavirus, many analysts claim that Singtel share is a defensive play because Singaporeans are likely to stay indoors and use data for communications. To this end, I do not dispute. However, as the saga unfolds, my opinion is that this virus could cause more harm than good for Singtel share price. The latest financial result appears to vindicate my thesis.

The third quarter result is bad. Revenue tanked to $4.3 billion from last year’s $4.6 billion while net profit declined 24% to $627 million. Although the result is disappointing, investors must have heaved a sigh of relief after the horror second quarter in which Singtel recorded its first ever quarterly loss because of the Indian Supreme Court’s hefty fine on its associate (Airtel). Singtel share price had slumped to $3.18 at one point but managed to recover much grounds in recent weeks.

The reason for the recovery of Singtel share price could be attributed to tariff hike by Airtel effective 1 December 2019. That move signalled the end of bitter mobile telco price war in India. Following that announcement, Singtel share price surged to stunning high of $3.46 on 2 December 2019.

What a calamity out of nowhere! DBS Group Holdings share price looks set for another bout of volatility with the unfolding coronavirus saga. Investors could be forgiven for punching the wall as this counter had barely emerged from the persistent Hong Kong riots when the coronavirus took the world by storm. Will the upcoming financial result be a cup of hot milo in the winter for investors?

As the bellwether of the economy, the banking sector is very susceptible to economy condition. It is still too early to judge whether this coronavirus will pose a short or long-term challenge for Singapore economy. But one thing for sure is that DBS Group Holdings share price will come under pressure in the coming months because of its significant exposure to the Hong Kong market, which had been roiled by the civil unrests, recession and the coronavirus.

In recent years, Hong Kong had emerged to be an important market for Singapore banks, particularly DBS Group and OCBC. The start of the Hong Kong protests in July 2019 saw DBS Group Holdings share price correcting to $24 by end of August 2019. Since then, DBS Group holdings recovered to rise to $26 in January 2020.

Crisis? What crisis? Keppel DC REIT share price shrugged off all talks of impending economic meltdown in Singapore to smash a high of $2.33. Since my last coverage in October 2019, Keppel DC REIT had a great run, surging from $2.00 to the current $2.33. Will this counter be another fairy-tale among the SGX stocks?

Amid the sea of red, Keppel DC REIT share price stood out from the rest of the pack and continued to be mightily bullish. In fact, Keppel DC REIT share price increased from $2.11 on 3 January 2020 to the current $2.33. It appears that not even a black swan event like the Wuhan virus can bring down Keppel DC REIT share price.

The shining Keppel DC REIT share price came on the back of an aggressive expansion of its portfolio assets. In 2019, the additions of Keppel DC Singapore 4 and DC1 increased the REIT’s assets under management to about $2.6 billion, an increase from $2.0 billion as at end-2018. Then in December 2019, Keppel DC REIT announced the acquisition of Kelsterbach Data Centre, which will be the REIT’s second data centre in Germany.

To be frank, the bullish form of Keppel DC REIT share price confounded me.

Is it really the right place and right time for Elite Commercial REIT? At a time when the whole world is firmly gripped by fear because of the Wuhan coronavirus, Elite Commercial REIT braved the storm to seek a listing on SGX mainboard. Notably, this IPO came after a slew of S-REIT listings in 2019, which included ARA US Hospitality, Eagle Hospitality Trust and Prime US REIT. Those were primarily US assets but Elite Commercial REIT differentiates itself as the first UK-focused S-REIT.

It seems that the management is determined to make the IPO a success. The public offering constitutes only 5,734,300 units while there is international placement of 108,981,000 units. In addition, 77,827,900 units are allocated to cornerstone investors. Understandably, given the current climate, such tactical allotment is needed to ensure that a successful IPO subscription.

The distribution yield is a mouth-watering 7.1% but whether this sort of distribution yield is sustainable is one big question mark given that the forecast is based on merely 15 months of financial results. The private trust investors were “unwilling to provide representations and warranties” for the latest three financial years of Elite Commercial Trust and had sought exemption from SGX.