Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis. The Straits Times Index (SGX: ^STI) has started the week on the right note with a 0.2% gain to 3,356 points despite having only 10 out of its 30 constituents making some headway today. There were 12 other blue chips which clocked losses. Let’s take a look at some market-beaters within the index. The conglomerate Jardine Cycle & Carriage (SGX: C07) is up 0.9% to S$46.70….
Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes – just in case they’re material to our investing thesis.
The Straits Times Index (SGX: ^STI) has started the week on the right note with a 0.2% gain to 3,356 points despite having only 10 out of its 30 constituents making some headway today. There were 12 other blue chips which clocked losses.
Let’s take a look at some market-beaters within the index.
The conglomerate Jardine Cycle & Carriage (SGX: C07) is up 0.9% to S$46.70. Last Thursday, the company’s subsidiary Astra International released its half-year results for 2014 and saw revenue grow by 8% year-on-year to Rp101,528 billion while profit increased by 11% to Rp9,815 billion.
Given that Indonesia-listed Astra makes up almost 90% of Jardine Cycle & Carriage’s overall revenue and profit, investors in the latter should be happy to see an improvement in the former’s business.
Prijono Sugiarto, President Director of Astra International, commented on the half-year performance:
“[Astra’s] businesses produced mixed results in the first half, despite generally strong operating volumes. While the outlook for the remainder of the year is for a satisfactory operating performance, it is expected that there will continue to be heightened competition in the car market and a subdued outlook for coal prices.”
CapitaMall Trust (SGX: C38U) has inched up by 0.5% to S$2.01. The real estate investment trust, which has interests in 16 retail malls island-wide, had announced its second quarter earnings last Wednesday. There was healthy year-on-year growth across the board for the REIT: Gross revenue for the quarter grew by 2.5% to S$164.3 million; net property income increased by 4.4% to S$114 million; and distributions per unit (DPU) came in 6.3% higher at 2.53 Singapore cents.
But despite all that growth, there were still pockets of disappointment. For instance, the REIT saw quarterly shopper traffic in its retail malls fall by 2% compared to a year ago; similarly, its tenants’ sales had also declined by 3.7%. Future changes to these two metrics might be worth watching for investors in CapitaMall Trust as a retail REIT’s long-term health would be ultimately dependent upon the health of its tenants.
Logistics facilities provider Global Logistic Properties (SGX: MC0) rounds up the trio with its shares gaining 1.1% to S$2.79. Just last week, BMW Brilliance Automotive Ltd. had inked a deal to lease 19,000 sqm (205,000 sq feet) worth of logistics space in Southern China from Global Logistics Properties. This is an extension of a partnership between both companies.
Previously, BMW Brilliance Automotive had “utilized the facility to distribute auto parts through a third party logistics provider to meet increasing demand for auto parts from its authorized dealers in Southern China.” Now, BMW Brilliance Automotive has “chosen to sign a larger, direct leasing agreement with [Global Logistic Properties] to facilitate their business expansion in China.”
In Global Logistic Properties’ announcement regarding the new lease, the company commented on the Chinese car market:
“According to McKinsey, the Chinese private car market is forecast to grow at a compound annual growth rate of 8% through 2020 when overall sales would reach 22 million vehicles. This is expected to continue driving demand for the auto parts and after-sales service in China.”
If the automobile segment in the country does indeed grow, Global Logistic Properties might be well-positioned to capture some of that.
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