Hong Kong formally withdraws extradition bill; Singapore’s GDP forecast lowered
After 13 long weeks of protests in Hong Kong, an end to the political crisis in the Special Administrative Region may be in sight. On Sept 4, the city’s embattled leader Carrie Lam formally announced the withdrawal of the extradition bill, meeting one of the five demands of the protesters.
The other demands are the retraction of the word “riot” to describe rallies, the release of all arrested demonstrators, an independent inquiry into perceived police brutality and the right for Hong Kongers to democratically choose their leaders. Although Lam had earlier suspended the bill, protesters were not satisfied until it was formally withdrawn.
Meanwhile, in the UK, British Prime Minister Boris Johnson suffered a humiliating defeat over his Brexit strategy that left his ruling Conservative Party in tatters. The House of Commons voted 328 to 301 on Sept 4 to seize control of the Parliament agenda and put forward their own draft law that would force him to delay Brexit until Jan 31. After the vote, Downing Street said the 21 Tory Members of Parliament who rebelled had been expelled from the party.
Johnson then initiated moves to trigger a snap general election, but this motion was voted down. On Sept 5, Johnson’s government abandoned attempts to block a law aimed at stopping a no-deal Brexit from happening.
Meanwhile, economists are lowering their forecasts for Singapore’s GDP growth amid macroeconomic uncertainty as trade tensions between the US and China continue unabated.
In the Monetary Authority of Singapore’s (MAS) September survey of professional forecasters,
23 economists and analysts who closely monitor the Singapore economy forecast GDP growth to hit 0.6%, down from 2.1% in a previous survey. This comes after the Singapore economy grew 0.1% y-o-y in 2Q2019, lower than the 1.6% forecast by respondents in the previous survey. For 3Q, economists expect a slight uptick to 0.3% growth.
Stocks to watch
The Ascott Ltd, CapitaLand’s wholly-owned lodging business unit, on Sept 5 opened its first co-living space, lyf Funan Singapore. The property is located within CapitaLand’s Funan integrated development and comprises 412 rooms in 279 apartments. It is also the largest co-living property in Southeast Asia.
Lyf is CapitaLand’s first co-living brand. In the pipeline are plans to open seven more lyf properties over the next three years in Bangkok, Fukuoka, Kuala Lumpur, Cebu, Shanghai and Singapore. Following lyf’s launch, shares in CapitaLand increased two cents, or 0.57%, on Sept 5 to close at $3.51.
Fragrance Group is acquiring Min Yuan Apartments on Waterloo Street for $141 million through its wholly-owned subsidiary Fragrance Victory. Fragrance Group plans to redevelop the property, along with the plot of land adjacent to it that the group already owns, into a hotel. The two parcels of land have a total area of 2,694 sq m and a gross floor area of 11,315 sq m.
OUE Commercial REIT and OUE Hospitality Trust on Sept 4 finally completed their merger, as it became effective and binding. The merged entity will operate under the OUE Commercial Trust name, and the combined properties will result in the creation of one of the largest diversified Singapore REITs, with total assets of about $6.9 billion. OUE H-Trust will be delisted on Sept 17.
Coffeeshop operator Kimly said on Sept 3 its former director Alain Ong Eng Seng was not the mastermind behind its listing and the acquisition of Asian Story Corp (ASC). Rather, it was Kimly’s executive director Vincent Chia Cher Khiang who dealt with the issue manager during the IPO due diligence process. In addition, it was the owner of ASC, Wang Jia Ye, who conveyed to Kimly his intention to sell ASC in 4Q2017.
The revelations were made by the F&B group in response to a number of queries raised by the Singapore Exchange after the local media reported details of the lawsuit against Ong by Japanese beverage giant Pokka. Shares in Kimly closed flat at 22 cents on Sept 5.
Top Global, a property developer and hospitality and facility manager, said on Sept 2 it would acquire 23 freehold commercial strata-titled lots with 43 property addresses in Thong Teck Building at 15 Scotts Road for $170 million.
The properties comprise four retail and 39 office units in Thong Teck Building, which was built in the mid-1970s and upgraded in 2014. The group said it would fund the acquisition through a combination of bank financing and internal cash resources.
Shares in Serial System gained 10.7% to trade at 8.3 cents on the morning of Sept 2 after its board on Aug 30 announced that Derek Goh Bak Heng would continue with his role on the board of directors and as CEO, following a review by its nominating committee (NC) at the request of SGX.
Last June, Goh was summoned by the Taiwanese authorities to assist in certain investigations. He was also asked by MAS to assist in investigations concerning the Securities and Futures Act in November 2015. Goh said he had limited information on the Taiwanese investigation so far. No action whatsoever by either authorities has been taken against Goh.
Sembcorp Marine has won a slew of new projects valued at $400 million, including engineering solutions for offshore gas and wind farm developments as well as cruise ship upgrades. In these contracts, SembMarine teamed up with various repeat and new customers. The group also succeeded in breaking into the highly competitive offshore wind sector in Taiwan.
Following the contract wins, RHB Research has kept its “buy” call on the stock, with a price target of $1.63, while CGS-CIMB Research upgraded its recommendation to “hold”, with a price target of $1.26.
The week ahead
This week, Singapore will release its foreign reserves USD report on Sept 9. On Sept 12, the city state’s 2Q2019 unemployment rate will be released, along with the retail sales report for July. E