ASEAN Equity Preview San Miguel, KKR, PTTEP, Sunway REIT
China’s foreign trade will continue to pick up in the fourth quarter of the year, the Ministry of Commerce (MOC) said on Thursday.
Exports growth jumped to 9.9 percent year-on-year to 186.35 billion U.S. dollars in September, up from 1 percent in July, and 2.7 percent in August, official data showed.
China’s foreign trade hit 2.84 trillion U.S. dollars in the first nine months, up 6.2 percent year-on-year.
In the USA Business investment showed signs of stalling in September, an indication that worries over a possible sharp tightening in the federal budget are already weighing on the economy.
Other data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week, a fresh sign the labor market is slowly healing.
New orders for capital goods outside of defense and excluding aircraft — a proxy for business spending plans — was unchanged last month at $60.3 billion, Commerce Department data showed. Analysts polled by Reuters had expected a modest gain.
The reading highlighted concerns that companies are holding back investments due to fears the U.S. Congress could fail to avert sharp tax hikes and spending cuts in 2013, which threaten to send the country back into recession.
ASEAN should see a mixed day today.
Sunway REIT aims to achieve RM7bil in total assets under management in three to five years through a combination of acquisitions from the sponsor (Sunway Bhd) and external acquisitions.
Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said its core investment assets were located in the thriving townships master planned and developed by its sponsor.
“For example, Sunway Resort City (SRC) is a bustling township where four of our assets are located with different exposure to the sub-sectors of the property market.
“The retail mall, hotels and office are enjoying strong business synergies from the township. Any potential assets of other sub-sectors within the township that may be acquired is expected to enjoy similar business synergies,” Ng said in an e-mail interview.
Listed on the Main Board of Bursa Malaysia Securities Bhd on July 8, 2010, Sunway REIT was Malaysia’s largest REIT in terms of asset size at RM4.63bil as at June 30, Ng said.
He said with a market capitalisation of RM3.99bil as at Oct 18, Sunway REIT was one of the largest retail-focused REITs listed on Bursa Malaysia. Ng said Sunway REIT was established with an initial portfolio of eight assets and had since grown to 11 assets spanning Selangor, Kuala Lumpur, Penang and Perak.
On Oct 9 this year, Sunway REIT announced the proposed acquisition of Sunway Medical Centre for RM310mil, which is pending approval from the Securities Commission and Bursa Malaysia as well as the unitholders.
With the acquisition, Sunway REIT’s portfolio will expand to 12 properties with total portfolio size of RM4.94bil. As at June 30, the portfolio by property value comprised office (9%), hotel (24%) and retail (67%), with most of the assets in Selangor (75%), followed by Kuala Lumpur (17%), Perak (1%) and Penang (7%).
Ng said Sunway REIT did not intend to expand overseas as “we are of the opinion that there are many untapped opportunities in Malaysia especially in the larger cities.”
“Sunway REIT will only consider overseas assets provided that they are opportunistic in nature with extensive asset enhancement initiatives and turnaround potential,” he said, adding that Sunway REIT continued to search for good quality assets across the nation.
Ng was here recently for the The Asia Pacific Real Estate Association (Aprea) Award presentation. Sunway REIT was picked as overall winner for the Aprea Best Practices Award 2012 under the Emerging Markets category (comprising Malaysia, India, the Philippines, Thailand and Vietnam).
Thailand’s PTT Exploration and Production has once again delayed start up of the Montara field in the Timor Sea offshore northwestern Australia, this time to the first quarter of 2013 from Q4 2012, the company said Thursday.
In a statement announcing its financial results, PTTEP said the project had won approval from the National Offshore Petroleum Safety Authority and is expected to begin production in Q1 2013.
This is the third time that PTTEP has delayed start up of the project, which has caused the worst ever oil spill in Australia waters.
The company in August finally drew a line under the 2009 spill by pleading guilty to four charges laid over the incident in the Darwin Magistrates’ Court and agreeing to pay a A$510,000 ($526,555) fine.
President Susilo Bambang Yudhoyono has asked Singapore to expand its Indonesian investments outside of Batam, a popular tourist destination amongst Singaporeans.
Yudhoyono made the request while receiving Singaporean Foreign Minister K. Shanmugam at the presidential palace in Jakarta on Thursday.
Presidential spokesman Teuku Faizasyah said Yudhoyono encouraged Singapore to become more involved with investment programs under the Master Plan for the Acceleration and Expansion of Economic Development (MP3EI) program, which divides Indonesia into six economic corridors, each focusing on different areas of development.
“[Singapore] has been [exclusively] focusing on Batam and its surrounding areas. It would be better if it expanded its focus to other regions under the MP3EI program,” Faizasyah told the Indonesian news portal republika.co.id.
He added that the two countries have not tapped into the numerous opportunities for bilateral economic ties under the MP3EI. However, Faizasyah noted that Shanmugam responded positively to Yudhoyono’s suggestions.
“The Singaporean foreign minister said he was ready to communicate the issue not only with [Singaporean] businesses, but also with the government, through the trade minister,” he said.
Singapore remains Indonesia’s largest investor; the city-state injected a total of $1.5 billion worth of investments in the archipelago during the third quarter of the year according to the latest data from Indonesia’s Investment Coordinating Board (BKPM). Britain and Japan, the country’s second biggest financiers, invested $700 million apiece.
Southeast Asia’s largest conglomerate San Miguel Corp. made a $5-billion bid for an unnamed company as part of its aggressive diversification into faster-growing industries such as energy, infrastructure and airlines.
San Miguel president Ramon S. Ang refused to give details on the proposed transaction, which he said may be closed this year. “This is a big acquisition and has a big potential,” he said.
In previous interviews, Ang said San Miguel was looking to acquire an Asian firm with international operations.
Aside from this, San Miguel is conducting due diligence on several regional airlines for possible acquisition in line with its goal to restore Philippine Airlines to its position as one of the region’s top carriers.
San Miguel acquired minority stakes in PAL and its affiliate Air Philippines in April in a deal worth around $500 million, marking its first foray into the airline business. It took over management control of the airline following the signing of the deal.
Kohlberg Kravis Roberts has opened new office will serve as the firm’s hub for Southeast Asia, a region in which KKR has invested more than $1 billion since 2005, confirmed Steven Okun, KKR’s Singapore-based director of public affairs.
Ming Lu, a member and regional leader of KKR’s Southeast Asian private equity business, will lead the office but will remain based in Hong Kong, reflecting his other roles serving on KKR’s Asian portfolio management committee and its China Growth Fund investment committee.
Two other directors at KKR, Kabir Mathur and Ridha Wirakusuman, will relocate to Singapore from Hong Kong.
The news release said KKR “sees opportunities in Southeast Asia arising from the increase in domestic consumption; the rapid development of the financial services industry; the increasing demand for better and improved infrastructure; opportunities from non-core carve-outs and corporate divestitures as well as divestments from state-owned enterprises.”
Yesterday in Asia
Hong Kong posted its 10th straight advance owing to increased market liquidity following the Fed’s monetary easing moves last month.
The euro also rose despite another round of downbeat data from debt-hit Europe, including economic pillar Germany.
Tokyo gained 1.13 percent, or 110.90 points, to 9,055.20 thanks to a weak yen which makes exports more competitive and hopes for fresh monetary easing by Japan’s central bank.
Seoul rose 0.55 percent, or 10.54 points, to 1,924.50 and Sydney closed 0.10 percent, or 4.7 points, higher at 4,510.5.
Hong Kong added 0.21 percent, or 46.45 points, to 21,810.23 as huge amounts of foreign cash flood into the market.
– Taipei fell 0.72 percent, or 52.80 points, to 7,262.08.
Taiwan Semiconductor Manufacturing Co. was 0.70 percent lower at Tw$84.8 while leading smartphone maker HTC dived 5.88 percent to Tw$248.0.
– Manila rose 0.12 percent, or 6.47 points, to 5,405.16.
Metropolitan Bank and Trust led gainers, rising 1.90 percent to 93.75 pesos, while SM Prime Holdings edged down 0.14 percent to 14.24 pesos.
– Wellington fell 0.27 percent, or 10.96 points, to 3,990.49.
Fletcher Building eased 1.9 percent to NZ$7.21, Telecom lost 0.4 percent to NZ$2.47 and Contact Energy shed 0.4 percent to NZ$5.49.
– Kuala Lumpur rose 3.90 points, or 0.23 percent, to close at 1,671.89.
IHH Healthcare gained 0.6 percent to 3.30 ringgit, while Tenaga Nasional added 0.3 percent to 6.95. UEM Land Holdings lost 0.9 percent to 2.13 ringgit.
– Singapore closed 0.42 percent, or 12.78 points, higher at 3,057.51.
Property developer CapitaLand climbed 1.52 percent to Sg$3.30 and banking giant UOB advanced 0.99 percent to Sg$18.58.
– Jakarta closed flat, edging up 3.78 points to 4,339.15.
Retailer Hero Supermarket was down 3.55 percent at 3,400 rupiah, while palm oil company Sinar Mas Agro Resources and Technology rose 2.94 percent to 7,000 rupiah.
– Bangkok gained 0.18 percent, or 2.39 points, to 1,297.39.
Coal producer Banpu edged up 1.29 percent to 393 baht, while PTT lost 0.32 percent to 313 baht.
– Mumbai rose 0.26 percent, or 48.61 points, to 18,758.63.
Auto and farm equipment maker Mahindra and Mahindra rose 3.59 percent to 857.55 rupees while private housing finance firm HDFC rose 2.06 percent to 766.05.
Kingfisher Airlines rose 4.81 percent to 10.9 rupees.
Heffernan Capital Management
Business Development Director – Private Client Group,
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408
Fax: +65 6329 9699
Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals. He is also an active consultant working with Corporations around the World.
He is recognized as one of the leading Economists in South East Asia, as well as the preeminent authority on ASEAN. His opinions and forecasts are widely read by decision makers in the region and Internationally.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.
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