SG Morning Highlights | Singtel's Nxera Partners with TM to Develop Data Centres in Johor, as Part of Its Expansion Strategy

Singapore shares opened higher on Wednesday. The $FTSE Singapore Straits Time Index(.STI.SG)$ rose 0.63 percent to 3322.64 as at 9:10 am.

$Singtel(Z74.SG)$: Singapore Telecommunications (Singtel)'s regional data centre business, Nxera, is partnering with Malaysian telco TM to develop data centres, starting with one in Johor. Singtel is also part of a consortium, along with US investment firm KKR, which will invest S$1.75 billion in data-centre provider ST Telemedia Global Data Centres. This move is part of Singtel's strategy to expand its data centre business and strengthen its position in the growing market. Shares of Singtel closed 1.2% higher at S$2.58 on Tuesday.

$SIA(C6L.SG)$: Singapore Airlines (SIA) has reported a 10.2% YoY increase in passenger traffic in May 2024, as demand for air travel remained robust. SIA and Scoot carried a total of 3.2 million passengers over the month, which is 14.3% higher than the year before. This increase in passenger traffic is a positive sign for the airline industry, which has been severely impacted by the COVID-19 pandemic. Shares of SIA closed 0.5% higher at S$6.76 on Tuesday, before the announcement.

$Sabana Reit(M1GU.SG)$: Sabana Real Estate Investment Trust (Sabana Reit) has priced S$100 million of sustainability-linked bonds due 2029, with a coupon rate of 4.15% per annum. The bonds will be issued in denominations of S$250,000, and if the Reit fails to meet its sustainability performance target, there will be a coupon step-up for the bonds. The net proceeds from the bond issue will be used for capital expenditures, such as acquiring new properties and asset enhancement initiatives, as well as refinancing existing term loans. The bond issuance has been criticized by activist investor Quarz Capital, who called it "highly abnormal and extraordinary." However, Sabana Reit's trustee has defended the bond issuance, stating that the terms do not impede internalization. HSBC's Singapore branch and CIMB Bank Berhad's Singapore branch have been appointed as joint lead managers, joint bookrunners, and joint sustainability-linked framework structuring advisors for the issue of the bonds.