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Singapore stock market and companies daily report (SC Global, MGCCT, SMRT) (March 08, 2013)

Contributed by Shares Investment

SC Global To Delist On 11 March 2013
In the chapters leading to the privatisation bid by Simon Cheong, SC Global’s (SCG) chairman and chief executive officer, things have finally come to closing time. SCG will be delisted from the Singapore Exchange on 11 March 2013. The months leading to this privatisation has been nothing short of being eventful. Wheelock Properties (Wheelock), a substantial stakeholder of SCG previously was seen ramping up its stake in the luxury property developer via a series of purchases in the weeks leading up to the close of Cheong’s voluntary unconditional cash offer, which was launched on 5 December 2012 at $1.80 a share. Wheelock then surprised market watchers when it sold its entire 17.9 percent stake to Cheong, which then pushed his stake in SCG to above 90 percent, which effectively made way for the delisting as it would then have met the free float criteria of below 10 percent.
Significance: The delisting would allow SCG greater flexibility to manage its business while relieving it of public listing costs and requirements, including quarterly reporting. Also, the stock’s liquidity in the market is low and that SCG has not tapped capital markets in at least six years.

Mapletree Greater China Commercial Trust Debuts On a Solid Front
Mapletree Greater China Commercial Trust (MGCCT) debuted on the main board on 7 march 2013. Listed at $0.93, which was the top end of the marketed range for its initial public offering price, the counter was up some 11 percent at the time of closing, at $1.03. Overwhelming demand for the trust was seen in the take up rate of the largest real estate investment trust listing to date. MGCCT saw an over subscription of nearly 30 times with a total demand of about $19.9 billion. MGCCT was the 3rd most actively traded stock on 7 march 2013, with some 238.5 million units changing hands. Armed with an attractive yield, MGCCT had a projected yield of 5.6 percent for FY13 and 6.1 percent for FY14. This is higher than the average comparison of 5.05 percent for retail REITS, and 4.82 percent for office REITS listed on the Singapore exchange. MGCCT holds two mixed use office and retail assets; festival walk in Hong Kong’s Kowloon area and Gateway Plaza in Beijing. MGCCT is mapletree investment’s fourth REIT listing here in Singapore.
Significance: Ng, lead analyst at Securities Investors Association (Singapore) said that with MGCCT now closer to fair valuation to its peers after a strong first day, he doesn’t expect any more big jumps in the unit price in the near term and that prices should stabilise at current levels and probably move upwards slowly.

SMRT Beefs Up Salary Of Non Exec Staff
Pay packages of SMRT Corp’s (SMRT) for its non executive staff will see a bump up, as part of a revised agreement signed with the National Transport Workers’ Union (NTWU). This wage review will extend to staff in the front line, technicians and administrative officers. Approximately 90 percent of the 7000 employees will set to benefit from this scheme. Set to take effect progressively from 1 March 2013, the aggregate incremental cost of the revision to SMRT is estimated to be $10 million for the financial quarter ending 31 March 2013. This sum is made up of an approximately $5 million base salary revision and a one-off market adjustment of approximately $5 million. The cost of the revision has not taken into consideration possible adjustments available to SMRT under the government’s proposed Wage Credit Scheme. However, this new wage agreement does not include SMRT’s bus drivers, as they were given a “salary enhancement package” in 2012. Despite that, SMRT said it will give its bus drivers from China- who are on two-year contracts-the same performance incentives, annual wage supplement and annual year-end variable bonus that its bus drivers on permanent contracts are getting. These will however replace the ex-gratia and sign-on bonus that the Chines national drivers currently have.
Significance: Starting this month, the starting salaries and salary ranges for each employee grade will also be tweaked upwards. From the start of April 2013, there will also be a monthly productivity and performance incentive of up to $250. Despite the increased cost pressure SMRT has to shoulder, this might be mitigated effectively by the Wage Credit System introduced by the government.