Brokers' take

Compiled by Stephanie Luo, The Business Times

KEPPEL TELECOMMUNICATIONS & TRANSPORTATION | BUY

APRIL 19 CLOSE: $1.74

TARGET PRICE: $2.51

UOB KAY HIAN, APRIL 19

We expect H1 2017 to be weak as Keppel Telecommunications & Transportation undergoes a transition to enter its next phase of growth.

Demand for its data centres remains strong and we expect this to manifest in high occupancy rates for the T20 data centre and the new PCCW Global - Keppel ICX (HK) data centre.

Earnings for the former are expected to kick in during Q2 2017 with an immediate 25 per cent take-up rate, while the latter will likely contribute from Q4 2017 onwards.

CAPITALAND COMMERCIAL

TRUST | HOLD

APRIL 19 CLOSE: $1.63

FAIR VALUE: $1.53

OCBC INVESTMENT RESEARCH, APRIL 19

CapitaLand Commercial Trust's (CCT) gross revenue and net property income jumped 33.9 per cent and 34.3 per cent year on year (yoy) to $89.5 million and $69.9 million, respectively, with the latter forming 24.6 per cent of our FY17 forecast.

This was largely driven by its increased stake in CapitaGreen and higher portfolio occupancy rate.

DPU grew 9.6 per cent yoy to 2.4 Singapore cents and accounted for 25.7 per cent of our full-year projection.

Operationally, CCT's portfolio committed occupancy improved 0.7 ppt (percentage point) quarter on quarter (qoq) to 97.8 per cent, as at March 31, while its average gross rent declined marginally by 0.2 per cent qoq to $9.18 psf/month for the quarter.

CCT announced that it had obtained provisional permission from URA for its plans to redevelop Golden Shoe Car Park.

CCT will decide on the next course of action pending the outcome of a feasibility study subject by SLA of the amount of differential premium payable.

SINGAPORE BANKS

CITI RESEARCH, APRIL 19

Citi issues a "soft Q1" alert in its Q1 2017 preview. It expects lingering asset quality issues and a slight lift for net interest margin (NIM).

Singapore bank stocks have seen increases of 7-9 per cent year to date (YTD) and 14-25 per cent post US election.

It also expects the scrutiny on Oil & Gas (O&G) asset quality to peter out in H2 2017.

Q1 2017 results are expected to be better qoq but still soft yoy. Also expect weak net interest income & loans, slight qoq NIM pick-up, stronger fees from supportive Q1 2017 market backdrop.

SGD short-term interest rate trend has held up YTD 2017 despite the pullback in the USD versus SGD, and 3M (three months) SGD Sibor has further strengthened in April.

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