OUE Commercial Reit to Merge with Hospitality Reit

OUE Commercial Real Estate Investment Trust (OUE C-Reit) and OUE Hospitality Trust (OUE H-Trust) are proposing to merge in a cash and stock deal that will create one of Singapore’s largest Reits with total assets of about SGD 6.8 billion.

 

Under the proposed scheme, OUE C-Reit will acquire OUE H-Trust by paying OUE H-Trust holders, for every OUE H-Trust stapled security held, SGD0.04075 in cash plus 1.3583 new OUE C-Reit units. OUE C-Reit will pay a total of about SGD74.6 million in cash, and issue about 2.5 billion new units to OUE H-Trust holders. Based on OUE C-Reit’s closing price of SGD0.52 on Friday, the 2.5 billion units would be worth about SGD 1.3 billion.

 

Parent company OUE Group will continue to retain a 48.3% stake in the enlarged Reit. OUE shares closed at SGD 1.77 on Friday.

 

The merged entity will be one of Singapore’s largest Reits by assets.

China Property Developer Reports on Good 2018 Among Jumping-up Debt Ratio

Hong Kong — China developers reporting on good 2018 among jumping-up debt ratio as some exceeds 100% level.

Over the past two weeks, major China developers were busy with annual results reporting. March 28th, Hong Kong-listed China’s second biggest home builder Evergrande, reported core profit jump 93.3% to 78.32 billion yuan (USD11.88 billion) for the year. Net gearing ratio, a measure of equity to debt, hit 151.9% at the end of 2018, up 24 percentage points from six months earlier

Country Garden Holdings, China’s biggest home builder, reported core profit for 2018 rose 38% to a record. Country Garden said in a statement on Monday its core profit, which is net profit excluding non-recurring income and revaluation gains, grew to 34.13 billion yuan last year. (Debt ratio)

State-owned China Overseas Land, reported on March 20th net profit during 2018 rose 10.1% to HKD44.9 billion, core profit rose 8.3% from a year ago, boosted by higher margins, core profit of the country’s seventh-biggest property developer by sales, which excludes revaluation gains and non-recurring items, came in at HKD37.1 billion

China Railway’s Debt Reaches New High

The debt of State-run China Railway Corporation reached 300 billion yuan ($44.68 billion) in 2018, far exceeding the planned 240 billion yuan in 2018, an increase of 25 percent.

The report added that national railway investment in 2019 is expected to exceed 800 billion yuan, a record high. According to the NDRC, China plans to start construction of 26 railway projects and another 19 reserve projects this year.

The total amount of railway bonds issued in 2018 was 240 billion yuan, accounting for about 30% of the annual railway investment, according to report. The national railway fixed asset investment stood at 802.8 billion yuan in 2018, higher than the 732 billion yuan planned, Shanghai Securities News said on Friday, citing sources. It was the fourth consecutive year since 2015 in which fixed asset investment breached 800 billion yuan.

The report said that aside from railway construction investment, the NDRC has approved a series of projects such as urban rail and airport construction with total investment of more than 1.2 trillion yuan since the fourth quarter of 2018. Moreover, local governments are accelerating the pace of investment in infrastructure construction, and their funds are also partly derived from bonds.

China’s P2P Protesters Hit On Beijing Streets

China’s savers are marching to Beijing for disappearing life savings on the peer-to-peer lending. Beijing has ordered a lockdown of Beijing’s financial district on August 6 to halt victims who lost savings from peer-to-peer (P2P) lending from spreading around protest.

 At least 57 P2P lending platforms have failed in July, adding to 80 cases in June, the biggest monthly tally in two years, wiping hundreds billion from P2P investors.

Shenzhen, Hangzhou – China’s biggest two P2P lending hubs, are piled with people who lost life savings stationed outside government buildings day and night.

 

Mega IPO HK Que

State-owned China Tower ,which operates the telecommunications towers for mainland China telecommunication companies, raised at least HKD54.3 billion (USD6.9 billion) in its IPO today.

MSCI to Add China A Share in Index

Global index publisher MSCI will include 234 Chinese large cap stocks in its global and regional indexes from June 1, 218.

 

The 234 yuan-denominated stocks, or China A-shares, will represent an aggregate weight of 0.39% in the MSCI Emerging Markets Index at a 2.5% partial inclusion factor during the first step of the China entry. The second phase of the entry will take place in September, which will double A-shares’ aggregate weight to 0.78%.

 

In a quarterly review published earlier in the month, MSCI slightly altered the expected weighting that the Chinese stocks will have in MSCI’s emerging market index. It did not explain why some companies were added or removed.

 

China Tech Giant Seeks Billion in USD Bond Rush

China tech giant joins USD bond rush run in the latest week. China’s tech firm Tencent was selling four tranches of bonds worth USD 5 billion on Jan. 19, according to the company’s announcement a week earlier.

 

The 4 tranches include 5-, 10-, and 20-year fixed-rate bonds at 2.985%, 3.595%, 3.925% respectively, and 5-year floating-rate bonds at 0.605% over three-month LIBOR.

 

The bonds selling plan is part of the company’s USD 10 billion medium-term bonds issuing plan announced in the previous week, according to China Xinhua News, “the global rating agency Moody’s has assigned a rating of A2, meaning low risk of default, to the Tencent bonds. The rating is one level below China’s business titan Alibaba’s bonds, issued last November”.

 

-Agencies