Welcome to this week’s edition of top stock market highlights.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, announced that it is acquiring a 50% stake in ION Orchard Mall from its sponsor, CapitaLand Investment Limited (SGX: 9CI).
The agreed property value is S$1.85 billion, and the REIT will fork out around S$1.1 billion, including the purchase consideration and other transaction-related expenses.
The property is an eight-storey iconic premium mall located along Orchard Road with a net lettable area of around 623,600 square feet.
The mall is integrated with a 56-storey condominium, The Orchard Residences. It is also linked to two MRT lines (North-South and Thomson-East Coast) via ION Orchard Link, an underground pedestrian link with retail offerings.
ION Orchard offers a gross yield of ~7.1% based on the annualised gross revenue for the mall compared to its property value.
With this acquisition, retail will form 35% of CICT’s enlarged portfolio with its assets under management growing from S$24.5 billion to S$26.4 billion.
Management is confident of achieving higher occupancy for ION Orchard through active asset management.
The current occupancy is around 96% for the mall but management has a proactive toolkit that includes space reconfiguration and mall rejuvenation to improve the mall’s attractiveness.
Income investors may be pleased to know that the REIT’s distribution per unit for the first half of 2024 will increase by 0.9% from S$0.0543 to S$0.0548.
An equity fundraising exercise was announced where 171,730,000 private placement units will be issued at an issue price of S$2.04 per unit.
At the same time, there will be a preferential offer of 56 units for every 1,000 held at an issue price of S$2.007 per unit, with around 377,303,974 units issued to unitholders.
Post-acquisition, CICT’s leverage will remain stable, going from 39.8% to 39.9%.
Nvidia Corporation (NASDAQ: NVDA)
Bloomberg News reported that Nvidia was sent a subpoena by the US Department of Justice (DOJ) regarding the GPU manufacturer’s antitrust practices.
The report mentioned that the watchdog had sent legally-binding requests to Nvidia and that other companies had also received such subpoenas.
Officials there are concerned that Nvidia is making it tougher for customers to switch to other suppliers and is penalising buyers who do not use its artificial intelligence (AI) chips.
Competitors had complained to the DOJ that Nvidia had abused its market dominance, which triggered an investigation several months ago.
In a surprise twist, Nvidia said it had been in contact with the DOJ but had not been subpoenaed.
The company reiterated that its edge in the AI computing market is attributed to the superiority of its products and that customers can choose whichever solution suits them best.
The GPU maker is also happy to answer any questions that the regulator may have about its business.
Regulators are specifically targeting Nvidia’s purchase of RunAI back in April to determine if this tie-up will make it tougher for customers to switch away from Nvidia chips.
They are also digging into whether Nvidia gives preferential supply and pricing to customers who use its technology exclusively or buy its complete systems.
ComfortDelGro Corporation Ltd (SGX: C52)
ComfortDelGro Corporation, or CDG, announced that its Australian subsidiary, ComfortDelGro Corporation Australia Pty Ltd (CDC), was awarded three bus franchises.
This award is part of the Victorian Department of Transport and Planning’s Metropolitan Zero Emission Bus (ZEB) Franchises tender process.
The latest win helps CDC retain its existing contracts and adds new services across the west and northwest regions.
These additions represent a 30% growth in CDG’s Victoria Public Bus business.
CDC will end up serving 20% of Melbourne’s Metropolitan Network.
The three contracts are worth around A$1.6 billion (around S$1.4 billion) over a 10-year term commencing July 2025.
Under these new franchises, buses and depots are funded and will transition to full ZEB operations before the contract term begins.
360 buses will service 250 public bus and school routes.
With this win, CDG will manage more than 2,800 public buses and coaches across six states and will also operate Australia’s largest taxi network.
We have just revealed the top 7 US tech stocks poised for remarkable growth. In today’s fast-paced market, betting on these giants could mean more money in your pocket. With a focus on solid fundamentals and innovative prowess, these selections should earn a place in your portfolio. Click here to grab your FREE report now and start investing in the future, today.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Royston Yang does not own shares in any of the companies mentioned.
