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Stocks to watch: A-Reit, OUE H-T, OKP, China Star

Tuesday, August 2, 2016 - 09:09

AFTER oil weakness led a Wall Street retreat overnight, trading here is expected to stay muted, except for certain rotational plays.

Counters that may see some active trade on Tuesday morning include Ascendas Real Estate Investment Trust (A-Reit), OUE Hospitality Trust (OUE H-T), OKP and China Star Food Group.

Ascendas Real Estate Investment Trust: A-Reit said on Tuesday morning that its private placement of 64 million new units was over six times covered and priced at the top end of the price range at S$2.417 per new unit. This represents a 3.3 per cent discount to the volume weighted average price (VWAP) for trades done on Monday.

The private placement drew strong demand from new and existing institutional, accredited and other investors mainly from Asia and the United States, A-Reit added.

The gross proceeds of about S$154.7 million will mainly be used to partially fund the acquisitions of a business park property located in Sydney and a logistics property located in Melbourne, as well as to fund an asset enhancement of a high-specification property in Singapore.

OUE Hospitality Trust: OUE H-T on Monday reported a 39.5 per cent drop in distribution per stapled security (DPS) to 0.92 Singapore cent for its second quarter ended June 30, 2016. This compared with 1.52 cents that it paid out a year ago. The lower distributions were partly due to an enlarged unit base following a rights issue in April 2016, but also partly due to poorer performance from its hotels and mall.

The trust manager also announced that it had completed the acquisition of the extension to Crowne Plaza Changi Airport from its sponsor. The construction was completed in June and the hotel obtained its temporary occupation permit and began operations on Monday.

OKP: Engineering firm OKP reported lower revenue from its core businesses and a higher bill from the taxman, which cut into its earnings for the second quarter. Net profit fell 15.6 per cent to S$2.5 million, while revenue for the three months ended June 30 slipped 11.6 per cent from a year ago to S$24 million.

China Star: Recent market debutante China Star reported a 20.5 per cent slump in net profit to 21.81 million yuan (S$4.4 million) as higher operating expenses outweighed the 7.9 per cent growth in revenue to 123.5 million yuan. But the group said it remains optimistic about the business outlook for the sweet potato snack food industry in China despite increased competition. It also aims to tap overseas export markets.