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The Singapore Market This Week: Yangzijiang Shipbuilding Holdings Ltd Leads the Pack Down

The local stock market, as represented by the Straits Times Index (SGX: ^STI), slipped 1.1%, or 40.9 points, to 3,529.3 for the week. Of the 30 index stocks, 24 were in the red while the remaining six were in the positive territory.

Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) led the group lower, sinking 10.9% to end the week at S$1.06.

At the end of last month, the shipbuilder announced its financial results for the first quarter ended 31 March 2018. Total revenue rose 6% year-on-year to RMB5.0 billion as revenue from both the shipbuilding related segment and investment segment improved for the quarter. Despite the higher overall revenue, net profit slipped 11% to RMB595.1 million.

Other losers for the week include Singapore Telecommunications Limited (SGX: Z74), CapitaLand Commercial Trust (SGX: C61U) and CapitaLand Limited (SGX: C31). Singtel dipped 3.9% to S$3.41, CapitaLand Commercial Trust slumped 3.4% to S$1.71 and CapitaLand Limited tumbled 3.3% to S$3.55.

The stock market didn’t seem very happy with the biggest telco in Singapore despite it posting higher revenue and net profit for its 2018 financial year. For the year, revenue went up 4.9% year-on-year to S$17.5 billion while net profit increased 41.5% to S$5.5 billion

CapitaLand Commercial Trust is foraying beyond Singapore with a property acquisition in Germany. The REIT, together with CapitaLand Limited, is acquiring Gallileo, a freehold Grade A commercial property in the central business district of Frankfurt, Germany. The commercial REIT will buy a 94.9% stake in the asset while CapitaLand will scoop up the remaining 5.1%.

The chief executive of CapitaLand Commercial Trust’s manager, Kevin Chee, mentioned:

“CCT has grown to become the largest office landlord in Singapore’s CBD by net lettable area over the years. Expanding overseas is a strategic move to deliver long-term sustainable distribution growth to our unitholders and inject diversity to the portfolio. CCT will remain predominantly Singapore focused and will look to allocate between 10% to 20% of its deposited property overseas. We have been actively exploring opportunities to acquire core commercial assets in key gateway cities in developed markets. Germany is a key focus for CCT given the depth of good quality investment grade commercial assets. Frankfurt’s office market is particularly attractive in view of the strong momentum in office demand and resilient rents.”

In the winners’ camp, Singapore Airlines Ltd (SGX: C6L) soared the highest with a 3.7% gain in its shares to S$11.56.

The airline group released two significant pieces of news during the week.

Firstly, it said that for the financial year ended 31 March 2018, revenue rose 6.3% year-on-year to $15.81 billion, with revenue improvements in all business segments. Meanwhile, net profit surged 148.1% to S$892.9 million.

Secondly, it announced that it would be merging SilkAir, its regional wing, with its parent brand, SIA, after spending over S$100 million upgrading the regional carrier’s cabin products.

Another big winner during the week was Comfortdelgro Corporation Ltd (SGX: C52), whose shares were driven up by 2.6% to S$2.39.

For the 2018 first-quarter, the land transport giant’s top-line inched up by 1% to S$878.8 million, but net profit tumbled 19.6% to S$66.3 million. The group has been disrupted in recent times by the proliferation of ride-hailing apps. However, there could be some light at the end of the tunnel for its Singapore taxi business as the chief executive of ComfortDelGro, Yang Ban Seng, said:

“For this quarter, we saw a slower decline in our local Taxi business. With the reduced subsidy and incentives for drivers and riders by ride-hailing apps operators, and the Authority’s review of regulations for private hire vehicles, we believe that the competition will be on a more level playing field going forward. This is a positive development.”

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, is now valued at a price-to-earnings ratio of 11.4 and has a distribution yield of 2.8%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of CapitaLand Commercial Trust. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Commercial Trust.