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Stocks to watch: OCBC, Parkway Life Reit, Mapletree Commercial Trust

Thursday, October 27, 2016 - 09:05

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First to report its earnings among Singapore banks, Oversea-Chinese Banking Corp (OCBC) bucked a wide consensus that it may report a second consecutive quarterly profit decline by posting a 5 per cent rise in net profit after tax for the third quarter ended Sept 30, 2016 to S$943 million.

TWO opposing forces could be at work on investors' sentiment, with mixed corporate earnings results and dull economic growth forecasts doled out by the government this week on the one hand and strong September industrial output on the other.

Stocks that could see some active trading on Thursday trading include those that have released sturdy earnings reports.

First to report its earnings among Singapore banks, Oversea-Chinese Banking Corp (OCBC) bucked a wide consensus that it may report a second consecutive quarterly profit decline by posting a 5 per cent rise in net profit after tax for the third quarter ended Sept 30, 2016 to S$943 million.

This was underpinned by better non-interest income, particularly fees from wealth management and profit from life assurance. But its non-performing loans ratio inched up to 1.2 per cent as at Sept 30 from 0.9 per cent a year ago.

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Parkway Life Real Estate Investment Trust (PLife Reit) could be another counter to watch, despite its 8.8 per cent drop in distribution per unit (DPU) to 3.06 Singapore cents for the third quarter ended Sept 30. The decline was due to an absence of one-off distribution of divestment gain but there was improvement in underlying earnings.

Gross revenue for the period rose 8.2 per cent to S$28.1 million driven by contribution from one nursing home acquired on March 31, higher rent from the properties in Singapore and the appreciation of the yen. As a result, net property income grew 8 per cent to S$26.2 million.

Mapletree Commercial Trust (MCT), which owns the mall VivoCity, on Wednesday reported a 1.5 per cent rise in DPU to 2.05 Singapore cents for its fiscal second quarter ended Sept 30. It reported a 24.8 per cent jump in net property income to S$68.4 million mainly due to a fresh revenue contribution from Mapletree Business City (MBC) Phase 1 that it bought in August and positive contributions from VivoCity, Mapletree Anson and PSA Building.

In its "buy" call for MCT, Religare Institutional Research raised its target price for MCT to S$1.70 from S$1.64 as it factored in stronger-than-expected margins at MBC Phase 1 and rental reversions at VivoCity in its DPU forecast for fiscal 2017 and 2018.

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