SG Morning Highlights: Data centre, industrial as well as diversified S-Reits leading Q3 2022 performance

Advancers / Decliners is 96 to 65, with 129.17 million securities worth S$89.46 million changing hands.

Malaysian former Prime Minister Najib Razak starts his final attempt on Monday to set aside his conviction in a corruption case linked to the multi-billion dollar 1MDB financial scandal.

The country's highest court has scheduled hearings through Aug 26 to hear Najib's appeal of his convictions for criminal breach of trust, abuse of power and money laundering over the alleged theft of US$4.5 billion from 1Malaysia Development Berhad (1MDB), a state fund he co-founded as premier in 2009.

At least six countries have launched investigations into 1MDB, a global scandal that has implicated high-level officials and major financial institutions.

With high natural gas prices showing no signs of abating and supplies becoming harder to obtain, cheaper and dirtier alternatives to the fuel are looking increasingly tempting for energy-hungry buyers.

Liquefied natural gas (LNG) prices in Asia are now at about US$50 per million British thermal units. On an energy-equivalent basis, gas was at about double the price of diesel as of early August, with high-sulfur fuel oil (HSFO) and coal cheaper still, according to data from S&P Global Commodity Insights.

In Europe, the situation is similar, with natural gas at around US$60, at least triple the price of HSFO and propane, according to energy consultancy FGE.

Malaysia's economic growth will accelerate this quarter after expanding at the fastest pace in a year, driven by private consumption as activities resume, Finance Minister Zafrul Aziz said.

"People are underestimating the strength of the pent-up demand," he said in an interview on Saturday (Aug 13). "Restaurants are packed, traffic jams have returned, the unemployment rate has fallen to below 4 per cent and the first-half tax collections have been way above our estimate."

Malaysia's GDP expanded 8.9 per cent in the April-June period from a year earlier, beating the 7 per cent median estimate in a Bloomberg survey. The economic recovery has also been aided by a boom in overseas trade, with both export and import values hitting records in June. The central bank is projecting full-year growth to be at the upper end of its 5.3-6.3 per cent forecast.

Global stock markets have been led by technology, consumer cyclicals and Reit sectors in Q3 2022-to-date. In Singapore, the S-Reits and property trusts sector gained 4.9 per cent in total returns and received S$8 million of net institutional inflows during this period.

The sector's performance was led by trusts within the data centre, industrial and diversified sub-segments. These 3 sub-segments averaged 12 per cent, 8.2 per cent and 4 per cent respectively in total returns in the Q3 2022-to-date.

This special dividend comes after a strong H1 2022 results driven by the divestment of ARA Asset Management to ESR Group. The divestment value was recognised at S$1.1 billion, an internal rate of return of 18.2 per cent or 3.7 times equity multiple of the original cost of investment.

Entitled shareholders may elect to receive 145 ESR shares or 180 new Straits Trading shares for every 1,000 Straits Trading shares owned. The distribution rate is about S$0.50 per share based on the HK$19.86 closing price of ESR shares on Aug 12. Shareholders will have to approve the distribution in an extraordinary general meeting which will be convened.

Revenue for the period fell 4 per cent to S$90.9 million from S$94.6 million the year prior, due to 28 per cent lower revenue contribution from the medical laboratory and dental equipment & supplies segment. This was partially offset by a 2 per cent increase in revenue from dental and medical clinics.

Revenue fell 20.8% to 65.1 million yuan from 82.3 million yuan. This was mainly due to temporary closures resulting from the resurgence of Covid-19 from end of March to May 2022 which impacted all business segments.

"The group expects its performance for FY2022 to continue to be impacted by Covid-19 in the event there is a resurgence of Covid-19 virus in China," said Dr Shao Yongxin, chief executive officer, Aoxin Q&M.