Forensic Analyst

Jason Yap, CFA

Forensic Accounting

On 10 September 2021, <a href="https://www.smartkarma.com/entities/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57:1" rel="noopener">City Developments (CIT SP)</a> announced plans to exit Sincere Property ("SP") through a series of transactions including, amongst others, divesting its remaining stake in Sincere Property, exiting director and officer appointments, and continuing to protect its creditor rights under the mainland entity's possible PRC bankruptcy proceedings. In <a href="https://www.smartkarma.com/insights/cdl-remedies-for-a-beleaguered-chinese-investment-and-belligerent-jv-partner" target="_blank" data-smartkarma-citation="insights:54449" rel="noopener">CDL - Remedies for a Beleaguered Chinese Investment and Belligerent JV Partner</a>, we discussed CDL's investment in SP and potential remedies that may be considered.  In its subsequent H1 2021 earnings release, CDL disclosed that financial exposure to SP stood at SGD117 million. The latest set of moves mark a clinical and decisive exit from the SP debacle. This article discusses the key terms of transactions and the outlook ahead.

On 10 September 2021, City Developments (CIT SP) announced plans to exit Sincere Property ("SP") through a series of transactions including, amongst others, divesting its remaining stake in Sincere Property, exiting director and officer appointments, and continuing to protect its creditor rights under the mainland entity's possible PRC bankruptcy proceedings. In CDL - Remedies for a Beleaguered Chinese Investment and Belligerent JV Partner, we discussed CDL's investment in SP and potential remedies that may be considered.  In its subsequent H1 2021 earnings release, CDL disclosed that financial exposure to SP stood at SGD117 million. The latest set of moves mark a clinical and decisive exit from the SP debacle. This article discusses the key terms of transactions and the outlook ahead.

City Developments - Clinical Exit from Sincere Property Investment

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>STI Rebounds 5.2% in July, led by Seatrium & Keppel Corp The 5.2% gain on the month was the STI's strongest performing month since a 6.4% gain in November 2022, with the STI trading at March levels (below 3,150) in early July, then retesting February levels (above 3,350) in late July. https://investors.sgx.com/_security-types/stocks/S51?lang=en led the STI constituents in July, gaining 12.8% while booking the highest net institutional inflow for the month at S$75.4 million.</li></ul>

STI Rebounds 5.2% in July, led by Seatrium & Keppel Corp The 5.2% gain on the month was the STI's strongest performing month since a 6.4% gain in November 2022, with the STI trading at March levels (below 3,150) in early July, then retesting February levels (above 3,350) in late July.  https://investors.sgx.com/_security-types/stocks/S51?lang=en led the STI constituents in July, gaining 12.8% while booking the highest net institutional inflow for the month at S$75.4 million.

STI Rebounds 5.2% in July, led by Seatrium & Keppel Corp

<ul><li>In 1H23, the STI generated a marginal 1.2% total return, with Singapore stocks booking net retail inflow of S$1.49 billion, compared to S$951 million in 1H22.</li><li>A similar number of Singapore stocks booked net retail inflow in 1H23 and 1H22, however the 1H23 combined net retail inflow of these ~300 stocks was down 10% from 1H22.</li><li>Potentially indicating rotational trading, Singtel, City Dev, CapitaLand Int Comm Trust, Suntec REIT averaged 7% declines in total return in 1H23 while booking net retail inflow, vs 13% total returns in 1H22 while booking net retail outflow.</li></ul>

In 1H23, the STI generated a marginal 1.2% total return, with Singapore stocks booking net retail inflow of S$1.49 billion, compared to S$951 million in 1H22.A similar number of Singapore stocks booked net retail inflow in 1H23 and 1H22, however the 1H23 combined net retail inflow of these ~300 stocks was down 10% from 1H22.Potentially indicating rotational trading, Singtel, City Dev, CapitaLand Int Comm Trust, Suntec REIT averaged 7% declines in total return in 1H23 while booking net retail inflow, vs 13% total returns in 1H22 while booking net retail outflow.

20 Singapore Stocks that Booked the Most Net Retail Inflow in 1H23

External broker reports(aggregated public sources), UOB Kay Hian

UOB Kay Hian

External broker reports(aggregated public sources)

Backed by the UOB Group, UOB Kay Hian is one of Asia’s largest brokerage firms. Headquartered in Singapore, we are supported by more than 80 branches worldwide including a growing network of offices across Southeast Asia, Greater China, the United Kingdom and North America. Our global footprint and strong international presence have enabled us to feel the pulse of key financial markets and deliver incisive intelligence across industry sectors and asset classes. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Impact of latest property cooling measures manageable with most of its launches in the mid-tier and mass market segments.</li><li>The Myst remains on track for launch in 2H23.</li><li>Hospitality segment continues to benefit from travel recovery with RevPAR surging 65.4% y-o-y to S$131.2 in 1Q23, driven by increases in room rates and occupancy in Asia and Australia.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Impact of latest property cooling measures manageable with most of its launches in the mid-tier and mass market segments.The Myst remains on track for launch in 2H23.Hospitality segment continues to benefit from travel recovery with RevPAR surging 65.4% y-o-y to S$131.2 in 1Q23, driven by increases in room rates and occupancy in Asia and Australia.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

City Developments - Hospitality Segment To Drive Growth

External broker reports(aggregated public sources), RHB Invest

RHB Invest

RHB Investment Bank is one of the leading capital market players in Malaysia. Supported by an award-winning research team of experienced product specialists, RHB Group Investment Banking offers a full range of investment banking products and services covering primary markets, such as advisory (corporate & debt restructuring, mergers and acquisitions, takeovers), fundraising via both equity and debt instruments, and secondary markets including securities trading for both institutional and retail clients. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>City Developments's share price has corrected 16% year-to-date, weighed down by cooling measures.</li><li>Despite a moderated residential outlook, we believe the impact to City Developments’s bottomline is manageable, as its inventory is substantially sold and the remaining landbank is mostly in mass/mid-tier segments.</li><li>City Developments's global hospitality portfolio (~one-third of RNAV) should continue to see a good recovery.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

City Developments's share price has corrected 16% year-to-date, weighed down by cooling measures.Despite a moderated residential outlook, we believe the impact to City Developments’s bottomline is manageable, as its inventory is substantially sold and the remaining landbank is mostly in mass/mid-tier segments.City Developments's global hospitality portfolio (~one-third of RNAV) should continue to see a good recovery.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

City Developments - Still Cheap Despite Cooling Measures; Keep BUY

Singapore

City Developments Limited is a property developer and owner. The Company, through its subsidiaries, are principally engaged in the investment of properties and shares, property management, project management and the provision of consultancy services, hospitality-related information technology, and procurement services. City Developments has a global presence.

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City Developments (CIT SP)

City Developments - Clinical Exit from Sincere Property Investment

CDL plans to exit Sincere Property by divesting its remaining stake, exiting director appointments, and protecting its rights in a PRC bankruptcy...

Jason Yap, CFA

STI Rebounds 5.2% in July, led by Seatrium & Keppel Corp

STI Rebounds 5.2% in July, led by Seatrium & Keppel Corp The 5.2% gain on the month was the STI's strongest performing month since a 6.4% gain...

Singapore Exchange Ltd (SGX)

20 Singapore Stocks that Booked the Most Net Retail Inflow in 1H23

In 1H23, the STI generated a marginal 1.2% total return, with Singapore stocks booking net retail inflow of S$1.49 billion, compared to S$951...

Singapore Exchange Ltd (SGX)

City Developments - Hospitality Segment To Drive Growth

Impact of latest property cooling measures manageable with most of its launches in the mid-tier and mass market segments. The Myst remains on track...

UOB Kay Hian

City Developments - Still Cheap Despite Cooling Measures; Keep BUY

Despite a moderated residential outlook, we believe the impact to City Developments’s bottomline is manageable, as its inventory is substantially sold

RHB Invest

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