| CGS CIMB |
RHB |
|
Riverstone Holdings Comforting hands
■ RSTON saw ramped-up healthcare glove demand from its distributors since the onset of Covid-19; orders should keep utilisation rate high through Jun. ■ Reacceleration of cleanroom glove sales growth will also bode well for RSTON’s margins. We forecast EPS growth of 15.5% in FY20F (FY19F: 5%). ■ Valuation is attractive; RSTON trades at c.50% discount to its Malaysianlisted peers (in terms of CY20F P/E). Reiterate Add with higher TP of S$1.30
|
2020 Singapore Budget Remains Focused On Long-term Needs
While the 2020 Budget addressed near-term concerns of industries and Singaporeans who have been and could be impacted by the COVID-19 outbreak, we applaud the Government’s efforts to build on past budgets and remain focused on the long-term growth, transformation and sustainability of the country, its businesses and its people. We view the Budget as mildly positive for the banking, REITs and consumer (excluding F&B) sectors.
|
| DBS VICKERS | OCBC |
|
Singapore: A robust fiscal response
• Budget 2020 projects a record fiscal deficit of SGD10.95bn (2.1% of nominal GDP), about half percent of GDP more than median analyst expectation • The government delivered a robust response to the Covid-19 outbreak with a SGD4bn (0.75% of GDP) package • Policymakers continued to persevere with longer term economic transformation • Emphasis was also placed on helping Singaporeans and strengthening the social safety net
|
Singapore Travel and Hospitality Relief package • Additional support to hard hit tourism sectors • Package aims to alleviate short-term cost pressures and protect jobs • More robust as compared to SARS relief package To help businesses cope with the near-term economic headwinds from the COVID-19 outbreak, the government announced a S$4b Stabilisation and Support Package during the Singapore Budget 2020 yesterday. Additional support will be provided to the most directly and adversely hit sectors, namely the tourism, aviation, retail, food services and point-to-point transport services. The Stabilisation and Support Package aims to provide job and cash-flow support to help firms retain workers. For the aviation sector, the government announced a S$112m package to mitigate business’ cost pressures and protect jobs. Support measures including rebates on aircraft landing and parking charges, assistance to ground handling agents, and rental rebates for shops and cargo agents at Changi Airport. Singapore Arlines (SIA SP) [BUY; FV: S$9.90] will likely be the key beneficiary. Separately, to help business in hospitality sector to tide over this difficult period and also to protect jobs, property tax rebate for the period 1 January 2020 to 31 December 2020 will be granted. In addition, a new temporary bridging loan programme will be introduced for a year to alleviate the short-term cash flow and operating cost pressures of tourism sector enterprises. We believe Far East Hospitality Trust (FEHT SP) [HOLD; FV: S$0.65] and CDL Hospitality Trusts (CDREIT SP) [BUY; FV: S$1.62] are likely to enjoy the most benefits given FEHT is a pure play on Singapore hospitality and CDLHT’s high presence in Singapore (62% by FY19 NPI). However, Ascott Residence Trust (ART SP) [BUY; FV: S$1.40] remains our top pick as we like ART’s defensive, geographically diversified portfolio, given the still uncertain outlook. |
Check out our compilation of Target Prices
