Kim Heng IPO Ballot Results

Previous post: [OUE C-REIT IPO]

Kim Heng Offshore & Marine Holdings Ballot Results

Shares will start trading at 9am on 22 Jan 2014.
Results of the IPO as follow

• 5.8x oversubscribed
• 280x oversubscribed in offer (public) tranche
• 1x subscription for placement shares

Comments on latest OUE C-REIT IPO

We have a BUY call on the latest OUE C-REIT IPO with an eye for the long run (horizon). Expect volatility in prices as US tapering exercise goes into full swing and as OUE C-REIT begins negotiating renewal of rents. Read full article on healthtrading here.

IF YOU ARE UNDECIDED, SG IPO Statistics page will show you how the IPO demand and supply has been from 2012 onwards.

IF YOU WANT TO APPLY, do check out Guide to IPO Investing. The deadline is Noon 23 Jan! Hurry.

Lastly, do follow HealthyTrading on Twitter! We are live on Twitter! Follow to get updated financial news with a Singapore perspective for your investment and trading ideas.

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OUE Commercial REIT IPO

Previous post: [6 Week Temporary Debt Limit Increase]

OUE Commercial REIT IPO

Summary

• S$0.80/share offer price
• 866 million shares to be created
• 433 million: OUE
• 225 million: cornerstone investors - Wealthy Foundation Holdings, Mr Gordon Tang, Mdm Chen Huaidan, Mr Yang Dehe and RHB Asset Management Sdn Bhd
• 151.75 million: institutions
• 56.25 million: retail investors

• 6.8% 2014 yield forecast, 6.89% 2015 yield forecast (after income support)
• 23.3% discount to NAV of $1.043/share
• 41.2% gearing ratio
• Ba1 (Moody's) rating
• Prospectus on MAS website click here

Timeline

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Commentary

• Operating cashflow (based on FY2012) can provide up to ~6.5% yield without income support. For the first two years, if income support kicks in, payout will still be < 100% of cashflow. Else, expect OUE C-REIT to be paying out of their own pocket until rental yields improve
• Average P/B value of direct competitors (CapitaCommercial Trust, Frasers Commercial Trust, Keppel REIT, Suntec REIT) is 0.84 based on 14 Jan 2014 OCBC S-REITs tracker. This represents a rough theoretical upside of 10% for current OUE C-REIT P/B of 0.767.
• OUE Bayfront is a relatively new property with rental yields yet to stabilise. Income from it forms almost 70% of OUE C-REIT portfolio so expect some volatility in that sense. Singapore commercial rentals in the CBD has been improving so rental yields can have room to improve. Leases for Lippo Plaza are mostly due for renewal soon so there is some case for upward improvement in rental yields subject to stability of the property market in China
• OUE Downtown 2, LA US Bank Tower, One Raffles Place could also be injected into the trust. OUE C-REIT, upon listing, will have a market capitalization of around S$700 million - the smallest of C-REITs on the SGX (next smallest Frasers Commercial Trust has a market cap of S$840 million). Chances are OUE is warming the market to its properties but still unsure of the true demand given the start of US tapering exercise. Slowly, but surely, they will want to inject these properties into the C-REIT to unlock their value.

Overall - BUY OUE C-REIT only for the long run. Expect volatility in prices as US tapering exercise goes into full swing and as OUE C-REIT begins negotiating renewal of rents.

IF YOU ARE UNDECIDED, SG IPO Statistics page will show you how the IPO demand and supply has been from 2012 onwards.

IF YOU WANT TO APPLY, do check out Guide to IPO Investing. The deadline is Noon 23 Jan! Hurry.

Lastly, do follow HealthyTrading on Twitter! We are live on Twitter! Follow to get updated financial news with a Singapore perspective for your investment and trading ideas.

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6 Week Temporary Debt Limit Increase

[Previous post: Tough Business Conditions - NOL, Vard Holdings]

Debt-Ceiling Increased Temporarily

As of 1am Singapore time, the Dow and S&P 500 had rallied more than 1.5% to pare some of the heavy losses sustained over the past 2 weeks. Republicans agree to increase the debt ceiling for 6 weeks in an attempt to come to a compromise with Obama's administration.

The optimistic

• Equities will rally to pare losses over the last 2 weeks temporarily
• A debt deal is still plausible so there is a chance market will trend even higher after these 6 weeks
• Bond-buying program from Fed will even less likely be removed in this period
• Amid all the news, Janet Yellen has been nominated to take over Fed chairperson role. Hurray to stimulus.

The pessimistic

• Yet another 6 weeks of volatility in addition to Fed's inconclusive Sept meeting
• Economic data will start coming in after 2 weeks of delay
• Still a good chance of yet another shutdown

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STI
Expect the STI to rally back to 3260 level where it should face strong resistance. It represents a rise of 2.9% on current day's close. Thereafter, the realisation of the increased volatility and uncertainty over the next 6 weeks should set in and revert markets lower.

• MACD - is postive and trending upwards. Crossing signal line soon.
• RSI (25d) - rebounding off 50% towards 70%
• Cross 20 and 50DMA. Yet another slightly bullish sign, value of STI is seen overcoming the 50DMA and trending to the 20DMA.



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