Reports » Singapore

Singapore stock market and companies daily report (Dynasty REIT, DeClout, Boustead Singapore) (October 25, 2012)

Contributed by Shares Investment

Dynasty REIT Suspends Plans For Listing
Dynasty Real Estate Investment Trust (REIT), sponsored by real-estate fund manager ARA Asset Management and backed by Hong Kong billionaire Li Ka-shing has suspended plans for its up to $956 million (US$778 million) yuan-denominated initial public offering, citing weak market conditions. Dynasty REIT would have been the second flotation denominated in the Chinese currency outside mainland China with an initial portfolio comprising three Chinese commercial properties in Shanghai, Nanjing and Dalian. Li, Asia’s richest man, and Singapore-listed ARA were also involved in the first offshore yuan IPO, last year’s US$1.6 billion offering in Hong Kong of Hui Xian REIT, which has stakes in Beijing office properties. However, ARA has suspended Dynasty REIT’s initial public offering (IPO) until further notice after consulting its bankers, the company said, adding that it may consider launching a China-focused REIT at a later date.
Significance: Despite the slew of IPOs in the market recently, concerns on the weak global growth remain rife, which ARA Asset noted could likely impede overall demand for Dynasty REIT and impair aftermarket performance, although it did received substantial support from institutional and retail investors.

DeClout Rises On Debut
DeClout closed at $0.28 on its first day of trading yesterday, realising a 12 percent gain over its IPO price of $0.25 apiece. Its shares opened at $0.295 and traded between $0.27 and $0.305 with more than 50 million shares changing hands, placing it amongst the most active stocks. A provider of next-generation technology services, Declout’s IT infrastructure services to companies include IT asset recovery, maintenance services, telecommunications and network solutions. The company has also started exploring a new core business – building and managing of industry-specific and customised vertical domain clouds (VDCs), which are platforms that various stakeholders can converge on to collaborate, communicate, interact and conduct business.
Significance: The IPO’s positive response, with all its offer shares fully placed, was “a strong vote of investor confidence in DeClout’s prospects and management’s ability to drive growth in in its core IT infrastructure services and unique VDCs”. The company is also confident in pioneering its VDCs model, which is expected to see adoption rate pick up in future.

Boustead Invests $20.1m In Beijing Tongzhou Project
Boustead Singapore has joined a joint venture with a consortium to develop a mixed-use project in Beijing’s Tongzhou district and will invest $20.1 million in the venture. This move marks Boustead’s first foray into commercial and retail developments in China, and the engineering services firm will finance the investment using its internal cash resources. Making up the consortium are Perennial Real Estate Holdings, Perennial China Retail, Ace Novel Developments and Imagine Properties amongst others. Boustead chairman and group chief executive officer Wong Fong Fui, in his personal capacity, will also invest $10.1 million through his controlled entity, Bright Assets Enterprises. The group intends to develop the Beijing Tongzhou Integrated Development (a predominantly-retail mixed-use asset comprising retail, office and residence components) in partnership with the subsidiary of a Beijing real estate developer worth around $500 million.
Significance: Boustead is of the view that the investment is an excellent opportunity for the company to expand its expertise and track record with its foray into China and with the Beijing government earmarking Tongzhou as a new central business district, Boustead will be able to ride on the benefits.