Singapore
Wired Daily
Page 2
Singapore's factory output unexpectedly shrank 2.2% y-o-y
in August - its first contraction in four months - weighed
down by weaker demand for electronics exports and
transport engineering output. Market consensus forecast had
been for 1.1% growth, vs +2.5% in July. Pharmaceuticals
helped to cushion some of the decline, boosting biomedical
output growth to 13% y-o-y, just under July's 13.8%.
Stripping out biomedicals, industrial output fell a sharper
5.4% y-o-y. Electronics output fell a sharper 7.3% y-o-y
compared to the 5.3% fall in July, due to continued weak
export demand. Semiconductors, a key segment of the
cluster, produced 12.3% less than a year ago in August. Also
contracting sharply was the transport engineering cluster,
which fell 20.1% y-o-y as a 34.5% jump in the land
transport segment was more than offset by sharp dips in
other segments. Marine and offshore engineering output fell
27.2% as oil rig projects contributed less in August.
Prime retail rents on Orchard Road continued to moderate to
$37.66 psf per month in Q3 2012, while Orchard Road was
in revamp mode. Data from Jones Lang Lasalle (JLL) shows
rent stabilisation was slower because of weaker retail sales
and fewer visitor arrivals. However, the decline was mitigated
by healthy leasing activity among food and beverage
operators and the entry of new retail players. Despite
declining sales in key segments and fewer visitor arrivals,
suburban prime rents have remained most stable at $28.20
psf per month since Q3 2011. This is in line with our
expectations. We continue to like the suburban malls due to
the strong domestic consumption from large population
catchment at major housing estates supporting retail sale.
Hence, this should continue to support healthy rental
reversion at suburban mall. (Maintain BUY for Frasers
Centrepoint Trust, at TP S$1.93).
Although retail rents in Orchard/Scotts Road revealed
weakness, we observed that the slight rental decline of <5%
is largely concentrated on malls that are undergoing
renovation. Post renovation, rents should pick up again. As
reflected in Wisma Atria (owned by Starhill Global Reit),
occupancy strengthened from 95% to 99.5%, while
committed leases in the last 12 months have risen by 33%
on a blended basis post the completion of AEI works in June.
(Maintain BUY for Starhill Global Reit at TP: S$0.81).
STATS ChipPAC will be divesting its entire 25% stake in
Micro Assembly Technologies (MAT) for HK$80.8m. The
group expects to receive a gain on disposal of US$2m in the
current financial year. Proceeds from the divestment will go
into general working capital and will be redeployed in its
existing business.
Ryobi Kiso Holdings has recently secured contracts worth
approximately S$24m, bringing the total contract value
secured since beginning of the calendar year 2012 to over
S$132m.
Xpress Holdings will record a net loss for 4Q12 and may
record a consolidated loss for FY July 2012 due to higher bad
and doubtful debts provisions, in view of the prevailing weak
and uncertain global economic conditions and the weaker
China business environment.
Singapore corporate bond issuance hit a record high in the
third quarter of this year, and demand is expected to stay
strong. Singapore-based issuers borrowed US$12.2bn in the
three months ended September, preliminary data from
Thomson Reuters showed. That is the highest quarterly
volume on record, and more than treble the year-ago
amount. Year-to-date, issuance by Singapore-based
companies was US$26.9 bn, more than double the US$12.4
bn the same period in 2011 and an all-time high.
The government has put up two more 99-year leasehold
executive condominium (EC) sites at Sengkang
EastWay/Fernvale Link, and Pasir Ris Drive 3/Pasir Ris Rise for
sale. The first site at Sengkang West Way/Fernvale Link
(Parcel B) sits on a 151,779.6 sq ft plot, and has a maximum
gross floor area (GFA) of about 455,338.8 sq ft. It is expected
to yield 420 homes. The second site at Pasir Ris Drive 3/Pasir
Ris Rise has a site area of about 297,729.5 sq ft, and a
maximum GFA of 625,231.9 sq ft. It is envisaged to yield
about 590 homes.
Elsewhere, an industrial site at Yishun Avenue 9 drew a total
of five bids with a top offer of $31.7m or $100.48 psf ppr
from Soilbuild Group, slightly above market expectations.
US and European markets fell overnight as concerns
continued that the recent decisions by central banks (FED’s
QE3, ECB’s OMT) to revive their ailing economies may well
suffer from the law of diminishing returns. Germany, the
Netherlands and Finland said Spain should bear the cost of
problems in their banks, with the ESM assuming only a
limited burden in recapitalizations. The Bank of Spain said the
country’s economy has kept falling at a “significant pace”
during 3Q.
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MARKET WATCH 27 SEP 2012
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