Reports » Singapore

Singapore stock market and companies daily report (Dow Jones, Capitamall Trust,Suntec REIT’s,COSCO Corporation ) (July 23, 2010)

Contributed by Shares Investment

By Shares Investment

Dow Jones Up 2% On Strong Earnings; Banks Jump

Stocks logged their best day in two weeks on 22 Jul-10 as a strong batch of earnings reports revived optimism about the economic recovery. The Dow Jones Industrial Average jumped 201.77, or 2%, to close at 10,322.30. The S&P 500 and Nasdaq rose 2.3% and 2.7%, respectively. Financial stocks got a boost after a slew of regional banks delivered solid results. Existing-home sales gave the market an extra boost: Sales fell 5.1% in June after a 2.2% drop in May but that was much less than the 8.1% decline expected. And the US 30- and 15-year mortgage rates fell to fresh lows in the past week amid concerns about the economic recovery, according to a survey released by Freddie Mac. Oil prices rose more than US$2 to US$79.30 a barrel amid the prospect of bad weather disrupting production in the Gulf of Mexico. Gold prices briefly broke the US$1,200 level, before sliding to US$1,195.50 an ounce and the dollar tumbled against the euro.

CMT To Invest $150m At The Atrium

Capitamall Trust (CMT) posted a 7.5% yoy increase in 2Q10 distributable income and unveiled plans to invest about $150m in asset enhancement works at The Atrium @ Orchard. The amount is expected to be expended over a period of about two years. The first three levels of The Atrium will be converted to retail use and linked to Plaza Singapura to create a seamless shopping experience. A canopy will be built along the open plaza between the two properties to maximise their combined 170-metre-long frontage along Orchard Road. Technical plans for The Atrium’s spruce-up have yet to be finalised but CapitaMall Trust Management hopes to start work by early next year and complete them in 3Q12.

Significance: Apart from organic expansion, these activities are likely to significantly boost income for CMT from 2012 onwards. Meanwhile, following the acquisition of Clarke Quay in February, CMT is also exploring development projects, which are likely to give higher returns.

Suntec REIT’s 2Q10 DPU Falls 15% To 2.53 cents

Suntec REIT’s 2Q10 distribution income dropped 3.7% to $45.9m, while distribution per unit (DPU) fell 15.1% to 2.528 cents. Gross revenue for the quarter slipped 3.3% to $62.4m, due to lower office and retail revenue. Segmentally, gross office revenue fell 2.3%, mainly due to lower rental income from Suntec City offices, which contributed $27.4m. While gross retail revenue slid 4.1%, mainly due to lower rental income achieved for Suntec City Mall. Meanwhile, the Q2 results brought the REIT’s 1H10 distribution income to $91.3m, fell 2.9% yoy, and its gross revenue to $124.8m, down 3.5% from $129.4m. 1H10 DPU was 5.041 cents, a 14.5% drop year on year.

Significance: Suntec REIT’s office portfolio has been strengthening, despite a drop in its DPU, revenue and earnings yoy. The occupancy rates for all three office properties stand at 97.6%, higher than the industry average of 93.3%, and showing four quarters of straight growth and even in terms of the rentals.

COSCO Corp Secures Deal Worth US$500m

COSCO Corporation (S)’s 51% owned subsidiary Cosco Shipyard Group, has secured a contract worth more than US$500m to build a deepwater drillship. The turnkey EPC (engineering, procurement and construction) contract was awarded to Cosco Dalian Shipyard Co by Dalian Deepwater Development to build an advanced and versatile vessel of DP3 classification. This vessel is designed to drill wells in international oilfields with high efficiency and safety in harsh environments and at ultradeep water depths up to 10,000 ft (3,050 m) and drilling depths exceeding 30,000 ft (9,150 m). The contract with Dalian Deepwater Development came into effect on 20 Jul-10 and the vessel is expected to be delivered in the 3Q12.

Significance: Apart from the 11 contracts and four letters of intent signed earlier by Cosco (Dalian) Shipyard Co and Cosco (Guangdong) Shipyard Co to build 15 units of bulk carriers, this contract further strengthens Cosco’s shipbuilding execution track record and order books.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.