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The Week in Numbers: Ascott Residence Trust and Ascendas Hospitality Trust to Merge

Ascott Residence Trust (SGX: A68U) and Ascendas Hospitality Trust (SGX: Q1P) are merging to form the largest hospitality trust in Asia-Pacific and the eighth-largest globally. The combined entity will be called Ascott Residence Trust and will boast a total asset value of S$7.6 billion.

It will have a portfolio of 88 properties in 39 cities and 15 countries across Asia-Pacific, Europe, and the United States.

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Ascott Reit will acquire all of Ascendas Hospitality Trust for S$1.2 billion comprising S$61.8 million in cash and 902.8 million new Ascott Residence Trust units.

ST Group Food Industries Holdings went public on 3 July, Wednesday. It began trading at 28 cents, up 7.7% from its initial public offering price of 26 cents.

The Australia-based group holds exclusive regional franchises and license rights for F&B brands such as Gong Cha, Ippudo and PappaRich. It currently has a network of 101 outlets, comprising 38 group-owned and 63-owned and operated by sub-franchisees and sub-licensees.

ST Group’s current share price gives it a market cap of S$64 million. It joins 142 other consumer companies to be listed on the Singapore stock exchange.

Meanwhile, Singapore’s factory growth slowed last month, a continuation of May’s contraction. Singapore’s Purchasing Managers’ Index (PMI), a broadly used barometer of manufacturing activity, was 49.6. A reading below 50 indicates contraction.

The electronics sector PMI shrank for the eighth consecutive quarter. The government has forecast full-year GDP at between 1.5 and 2.5%.

Investors sent Sembcorp Marine Ltd (SGX: S51) shares plunging on Wednesday, 3 June after it was again embroiled in an anti-graft crackdown in Brazil. The stock was down 8.4% by early afternoon with 30 million shares changing hands.

Its parent company, Sembcorp Industries Ltd (SGX: U96) took a hit too as the stock tumbled 2.4%. Investors are most worried that Sembcorp Marine will be hit by huge fines similar to what Keppel Corporation Limited (SGX: BN4) faced in 2017.

Australia cut interest rates in successive meetings for the first time in seven years. Reserve Bank of Australia governor Philip Lowe lowered the key rate by 0.25% to 1%. The second cut comes as global trade continues to show signs of deterioration, adding to poor domestic demand due to sliding property prices.

The Aussie dollar gained 0.2% to 69.79 US cents after the announcement. The economy in Australia has slowed in recent quarters and is on track for its weakest fiscal year in 28 years.

Back home, private residential property prices in Singapore rallied to a five-year high in the second quarter. The price index rose 1.3% to 150.5. Prices of non-landed private homes rose 1.5% in the core central region, with the rest of the central region up 3%Outside of the central region, prices increased by 0.5%.

The Hong Kong dollar surged to a two-year high as tight liquidity kept borrowing costs elevated. Local money rates are surging as companies hold cash to pay dividends and large share sales lock up funds.

Lastly, the Asia Pacific arm of Anheuser-Busch InBev is preparing a listing in Hong Kong to raise up to US$9.8 billion, while Alibaba Group is said to have filed for an IPO that could potentially raise US$20 billion. The Hong Kong Monetary Authority spent HK$22.1 billion in March to defend the currency’s peg. The peg allows Hong Kong’s central bank to effectively import US monetary policy.

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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice.  Motley Fool Singapore contributor Jeremy Chia owns shares in Keppel Corporation and Alibaba Group Holdings Ltd.