Welcome again to our stock highlights segment where we highlight interesting corporate events or happenings in the stock market.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank Ltd, or UOB, one of Singapore’s three big banks, recently saw its share price scale to a new all-time high of S$32.80.
Over the past year, shares of the lender had climbed nearly 36%.
There are ample reasons for optimism.
With inflation in the US hitting a fresh four-decade high of 7.5%, it has given the Federal Reserve has even impetus to raise interest rates.
A total of three rate hikes are expected this year, starting next month, with three more to follow in 2023.
UOB had previously guided that a 0.25% increase in interest rates could lift its net interest margin by 0.03 to 0.04 percentage points.
The impending hikes are expected to benefit the bank’s bottom line and may even increase its ability to pay higher dividends.
Keppel Corporation Limited (SGX: BN4)
Keppel Corporation Limited’s bid to acquire Singapore Press Holdings Ltd (SGX: T39), or SPH, has hit a snag.
SPH has filed a notice to terminate Keppel’s takeover offer and let its shareholders vote on a rival offer from Cuscaden Peak, led by a consortium that includes Hotel Properties Limited (SGX: H15) and Temasek-linked entities.
As a result, Keppel will go ahead with arbitration proceedings against SPH to “enforce its rights” and seek various reliefs, including the reinstatement of its offer to be put to the vote by SPH’s shareholders.
Recall that Keppel had raised its offer to S$2.351 per SPH share from its original offer and that Cuscaden Peak had also raised its final offer to S$2.40 per share, which comprised S$1.602 in cash and 0.782 of an SPH REIT (SGX: SK6U) unit.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaSpring, a 51-storey integrated development located in the Central Business District (CBD), has announced the completion of its construction after obtaining its temporary occupation permit at the end of 2021.
Around 93% of the property’s workspace and retail net lettable area have been committed, with tenants moving in progressively since the fourth quarter of 2021 (4Q2021).
The skyscraper is the only Grade A office building in the CBD to be completed last year and boasts “green” features such as a green oasis and Singapore’s tallest urban farm.
CapitaSpring is jointly owned by CapitaLand Development, CapitaLand Integrated Commercial Trust, or CICT, and Mitsubishi Estate Co., Ltd.
The official completion of this iconic integrated development should provide a boost to CICT’s rental income for 2022.
Manulife US REIT (SGX: BTOU)
Manulife US REIT, or MUST, released its fiscal 2021 full year (FY2021) earnings recently.
Gross revenue fell by 4.7% year on year to US$185.1 million due to higher rental abatements, lower car park income, and lower rental income resulting from higher vacancies.
Note: Rental abatement refers to an agreement between a landlord and a tenant that provides a period of free rent.
Net property income declined by 5.4% year on year while distribution per unit decreased to US$0.0533 for FY2021, down 5.5% year on year.
At MUST’s last-traded unit price of US$0.65, its units offer a trailing distribution yield of 8.2%.
The US commercial REIT continues to enjoy high occupancy of 92.3% as of 31 December 2021.
Gearing stood at 42.8% with a cost of debt of 2.82%, down from 3.18% a year ago.
There’s good news for investors, though.
The US office market saw strong recovery momentum in 4Q2021, with higher leasing volume and base and net effective rents on the rise.
In the second half of 2021 (2H2021), visible improvements were also seen in MUST’s portfolio.
The portfolio enjoyed a longer weighted average lease expiry (WALE) for leases executed, while valuation turned positive for the first time since the onset of the pandemic.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.