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Stocks to watch: CMT, FCT, Soilbuild Reit, Keppel Corp
OTHER than news of potentially more monetary policy easing by the European Central Bank, an overnight recovery on Wall Street and crude oil prices, local investors can eschew the slew of earnings reports released.
Retail landlord CapitaLand Mall Trust (CMT) on Friday said it achieved a 0.7 per cent increase in distribution per unit (DPU) to 2.88 cents for the fourth quarter ended Dec 31, 2015, thanks to gains from the disposal of Rivervale Mall and higher rents achieved in most of its malls. This translated into an annualised yield of 5.83 cents based on Thursday's closing.
Lower property expenses boosted returns at Frasers Centrepoint Trust (FCT) and delivered a better DPU for its first quarter. On Thursday, FCT said 4.4 per cent to 2.87 cents, up from 2.75 cents a year earlier. Net property income for the first quarter climbed 2 per cent to S$33.5 million, thanks to a decline in property expenses due to lower utility tariff rates and fewer maintenance and repair works.
On the industrial property front, Soilbuild Business Space Reit said on Thursday its DPU for the fourth quarter rose 1.8 per cent to 1.614 Singapore cents, buoyed by higher income. Its DPU in the year-ago quarter stood at 1.585 Singapore cents. Net property income rose 17.1 per cent to S$17.5 million for the three months ended Dec 31, 2015, on the back of higher rental revenue, and as the gain in operating expenses was slower than that of revenue.
News of Keppel Corp making a S$230 million provision for the default risks tied to a US$4.9 billion rig construction contract with the financially-stricken Sete Brasil is expected to cause further selling pressures on the offshore marine sector. Keppel Corp said on Thursday its fourth-quarter net profit fell 44 per cent and its 2015 profit dropped to a five-year low as plunging oil prices hit demand for offshore rigs. The full-year net profit stood at S$1.525 billion, in line with the mean forecast of S$1.5 billion based on estimates by 20 analysts, according to Thomson Reuters data.
Both Keppel and rival Sembcorp Marine Ltd face the risk of clients asking for further delivery delays and cancellations, and of new orders drying up, as oil prices have fallen below US$30 a barrel for the first time in more than a decade.