SG Morning Highlights | OCBC's Bid for Great Eastern Life to Boost Sector Valuations
Good morning mooers! Here are things you need to know about today's Singapore markets:
●Singapore shares opened lower on Wednesday; STI down 0.33%
●HDB's Self-Listing Portal May Impact Real Estate Agents, But Many Sellers May Still Engage Them
●Warehouse Occupancy and Rents to Decline Amid Increased Supply, Reports Colliers
●Stocks to watch: OCBC, Singtel, UOL. Sea
●Latest share buy back transactions
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Market Snapshot
Singapore shares opened lower on Wednesday. The $FTSE Singapore Straits Time Index(.STI.SG$ dropped 0.33 percent to 3302.31 as at 9:07 am.
Advancers / Decliners is 84 to 85, with 133.51 million securities worth S$168.95 million changing hands.
Breaking News
HDB's Self-Listing Portal May Impact Real Estate Agents, But Many Sellers May Still Engage Them
The new self-listing portal by HDB is expected to impact the need for real estate agents, but experts believe that many will still engage agents despite the new option. Property agents provide customised market insights, highlight suitable opportunities, and vet interested parties based on their experience in transacting properties. Additionally, they have a wide range of digital tools to help clients assess sales and price trends, as well as market properties more efficiently. The portal is expected to boost transparency in the market and streamline the buying and selling process, allowing for a faster transaction period. However, not all sellers want to deal with sales matters, and some may require assistance in paperwork and documentation or prefer to maintain their anonymity. The platform may also prevent price manipulation and manage price hikes, leading to more realistic asking prices.
Warehouse Occupancy and Rents to Decline Amid Increased Supply, Reports Colliers
According to a report by Colliers, warehouse occupancy rates and rents are set to decline further amid rising supply. The report noted that more space will hit the market due to developments completed in 2025 and some tenants downsizing or relocating because of high rents. Occupiers might also be resistant to the higher rents and may opt to develop sites themselves, partner with a developer, or relocate to cheaper locations. In the first quarter of 2024, warehouse rents increased 2.0% QoQ, whilst occupancy declined to 91.1% from 91.6%. However, Colliers pointed out that the increase was due to tight supply, especially in the prime logistics space.
Stocks to Watch
$OCBC Bank(O39.SG$: Oversea-Chinese Banking Corporation's (OCBC) bid for Great Eastern Life is expected to boost the valuations of its peers, Prudential and AIA, in the Asian life insurance market. The bid values Great Eastern Life at 0.70x P/EV, which is a 37% increase from 0.51x, thereby suggesting that listed Asian life insurance peers should see a valuation boost. Prudential and AIA, which have significant market shares in Malaysia and Singapore, are gaining market share from Great Eastern Life. OCBC's bid aligns with its focus on capturing regional wealth flows and solidifying its wealth position. Full ownership of Great Eastern Life, which already contributes 15% of OCBC's earnings, will be accretive to its profits due to existing substantial synergies.
$First Resources(EB5.SG$: Indonesian palm oil producer First Resources has reported Q1 net profit of $36.1m, an 86.6% increase on the same period a year ago. The company attributed the rise to higher sales volumes and reduced export taxes, despite lower average selling prices. Sales rose 6.2% to $210.5m, while earnings before interest, taxes, depreciation and amortisation grew 26% to $69.4m. Fresh fruit bunches harvested grew 6.4% to 78,618 tonnes, with crude palm oil production up 8.9% to 201,754 tonnes. First Resources said it had available undrawn committed unsecured credit facilities of $35m for general corporate purposes.
$Singtel(Z74.SG$: Singtel's Mother's Day short film, "Hello Mom's Day", has been released, featuring a daughter surprising her mother with a winter holiday. In the film, Kristen plans a surprise trip to Harbin for her mother, Mei Lian, and acquires necessary winter essentials without her mother's knowledge. The surprise is then revealed to Mei Lian, with Singtel reminding viewers of its overseas roaming services. The campaign will run on Singtel's social media channels, including Instagram, YouTube, and TikTok. This is the second film in Singtel's emotional campaign series, following a successful "Hello Raya" campaign.
$UOL(U14.SG$: A consortium led by UOL Group has submitted the highest bid of SGD805m ($595m) for a prime residential site near Holland Village in western Singapore. The consortium, which includes Singapore Land, Kheng Leong and CapitaLand Development, plans to build 680 residential units on the site across two 40-storey towers. The bid is one of three received by the government for the 133,343 sq ft site. The Wee family, which owns UOL Group, is among the wealthiest in Singapore, with a net worth of $7.1bn. The project is expected to be marketed at a starting price of SGD2,800 per sq ft.
$Sea(SE.US$: E-commerce and gaming company Sea has posted a Q1 net loss of $23m, compared with a $87.3m profit in the same period a year ago. However, the company's Q1 revenue growth of 22.8%, which beat analysts' expectations, helped push its share price up 5.4% to $67.96 at the market open. Of this revenue, $2.7bn was generated by the company's e-commerce segment, Shopee, marking a record high in quarterly revenue. CEO Forrest Li said the firm has a "clear road map for profitable growth", and is "well on track" to meet its full-year guidance.
Share Buy Back Transactions
Source: Business Times, SGinvestors.io, Business Review
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