China is ramping up stimulus to boost market confidence &mdash but is it enough?

 

DBS Group Research is in the view that City Developments Limited C09 1.57% (CDL) is a proxy to the Singapore residential market. The research house has &ldquo buy&rdquo call and $10.50 target price on the stock, as analyst Rachel Tan notes that there was a positive correlation between share prices and a strong showing at new residential launches in seven out of 11 occurrences since 2018. Tan expects to see a similar trend in the coming months.

 

In a Jan 22 report, Tan notes that the coming two weekends will see the launch of more than about 1,000 new residential units across three projects, mainly in the Outside Central Region (OCR), with more to come in Feb 24, bringing attention back to the property developers.

 

This is following the quiet months of November and December 2023, when new project launches tapered off. While the Singapore property developers (FSTREH Index) saw a strong rebound of about 8% in the past two months, since the lows back in late October 2023, it underperformed S-REITs, which ran up by 15%.

 

The way Tan sees it, executive condominiums (ECs) are a pot of gold for home buyers.

 

&ldquo With suburban condominiums hitting a new pricing benchmark of $2,000 psf in recent months, we have seen buyers (that qualify) focus their attention on ECs, which are priced more attractively, at up to a about 25% discount to private property prices, mainly due to income limits and tighter affordability ratios placed on buyers,&rdquo says Tan, adding that past EC projects launched in 2022-2023 have hence seen robust sell-through rates, with about 88% to 100% sold within two-three months of launch, giving developers certainty in their returns.

 

With CDL set to launch the 512-unit Lumina Grand, an upcoming EC project in Bukit Batok (near the new Tengah estate), the analyst expects to see a strong buyer response, potentially boosting CDL&rsquo s share price.

 

Despite the high-supply pipeline and developers taking a cautious stance towards land-banking, Tan believes that developers will take a more opportunistic stance on EC sites (with three more in the pipeline offering about 1,500 units).

 

&ldquo We anticipate these EC sites will be hotly contested in the upcoming tenders, with the likes of CDL, Frasers Property TQ5 1.06% Limited (FPL), and UOL Group keenly looking to add it to their inventories upon launch, which would be accretive to RNAVs,&rdquo says Tan.

 

DBS has &ldquo buy&rdquo calls on FPL and UOL, with target prices of $1.20 and $8.40 respectively.

 

Four Singapore-based names feature in this year&rsquo s edition of Corporate Knights&rsquo Global 100, an annual ranking of the world&rsquo s 100 most sustainable listed companies. 

 

Maintaining their spots from last year are City Developments Limited C09 - (CDL), StarHub CC3 - and Nasdaq-listed Maxeon Solar Technologies. Meanwhile, Singtel Z74 - has replaced CapitaLand Investment 9CI - , which dropped out of this year&rsquo s list after placing #56 last year.

 

Toronto-based sustainable business research firm Corporate Knights released the results of the 20th iteration of the annual leaderboard on Jan 17. Since 2005, the Global 100&rsquo s objective has been to identify the most sustainable publicly-traded companies. 

 

The Global 100 rates companies in 38 industry groups, including banking, utilities, mining, oil and gas and manufacturing, based on 25 metrics. It applies different weighting to certain metrics given the nature of the sector.

 

This year&rsquo s ranking was based on an assessment of 6,733 companies with more than US$1 billion in revenues in FY2022.

 

Together, the Global 100 most sustainable corporations invested 55% of their capital expenditures, research and development and acquisitions into green themes, compared to an average of 17% by similarly large companies. 

20-year outperformance 

 

The Global 100 companies have also provided attractive investment returns for their shareholders, outperforming even without exposure to weapons or traditional fossil fuel stocks, which have benefited from geopolitical instability over the past two years.

 

Corporate Knights says the Global 100 Index &mdash comprising each year&rsquo s leaders &mdash has continually tracked higher total returns since 2005. It returned 295% at the end of 2023, compared to 278% for the MSCI All Country World Index (ACWI) and 254% for the Dow Jones Sustainability World Index.

 

&ldquo The Global 100 index has outperformed over time because Global 100 companies back up their green commitments with their investment dollars,&rdquo says Toby Heaps, CEO of Corporate Knights. &ldquo Sustainable investment themes like clean energy are growing exponentially, and the Global 100, across sectors, are helping to drive and are poised to thrive in the low-carbon economy.&rdquo  

 

Two Australian companies, Sims Limited and Brambles Limited top the 2024 ranking respectively. Sims recycles scrap metal in 30 countries, and Brambles rents recycled shipping pallets and containers around the globe. 

 

In total, 31 new companies entered the ranking in 2024, helping to broaden the index&rsquo s geographic footprint, particularly in China. Five of the eight companies from Mainland China on this year&rsquo s list are debuts. 

 

The Global 100 also awarded a &ldquo pivot prize&rdquo to Italian energy firm ERG SpA, which completed its multi-year transition from black to green halfway through 2023. The company ranks #28 this year.

 

ERG had sold off its oil assets in 2013 and announced the divestiture of its gas assets in 2022 but was blocked by Italy&rsquo s antitrust regulator. The company redoubled its efforts to sell its last non-renewable assets and finally sold its gas-fired power plant to Achernar Assets in June 2023. 

 

&ldquo When we first did the Global 100 ranking 20 years ago, the green economy was a quaint idea,&rdquo says Heaps. &ldquo It is now the overwhelming driver of global economic growth, and we are enthusiastic that the Global 100 will continue to lead the way over the next 20 years and beyond.&rdquo  

 

Singapore&rsquo s top firms

 

CDL improved in this year&rsquo s ranking, moving up six spots to #22 from #28 last year. 

 

CDL also remained Singapore&rsquo s most sustainable company, a position held for the sixth consecutive year. In a statement, CDL notes improvements in &ldquo key areas&rdquo focusing on energy, greenhouse gas (GHG) and water productivity, ESG-linked remuneration key performance indicators (KPI0 for management, talent attraction and retention and a sustainable supply chain.

 

CDL committed to more ambitious carbon emissions reduction targets in December 2021. These targets, validated by the Science Based Targets initiative (SBTi), include plans to cut Scope 1 and 2 GHG emissions by 63% per sq m of leased area by 2030 from a 2016 base year. 

 

The company also aims to reduce its Scope 3 GHG emissions from purchased goods and services by 41% per sq m of gross floor area by 2030 from 2016. 

 

Lastly, CDL plans to reduce absolute Scope 3 GHG emissions from investments by 58.8% by 2030 from 2016, including hotels managed by its hotel subsidiary, Millennium & Copthorne Hotels Limited.

 

In December 2023, CDL became the first corporate to obtain the OCBC 1.5° C loan. The three-year GBP200 million ($338.2 million) sustainability-linked revolving credit facility features interest rate incentives pegged to annual decarbonisation performance targets. 

 

Sherman Kwek, CDL&rsquo s group chief executive officer, says: &ldquo As stewards of the built environment, businesses have a pivotal role in decarbonising our world&hellip This accolade reaffirms our commitment to a climate-positive future and achieving our initial net-zero goals by 2030. By embracing innovation, collaboration and sustainable practices, we can reduce our carbon footprint and inspire a collective shift towards a net-zero future.&rdquo

 

At #62, Singtel returns to this year&rsquo s list after falling out of the Global 100 last year.

 

In recognition of its investments in sustainable infrastructure, such as green data centres and new carbon neutral headquarters, as well as efforts to foster inclusivity and diversity Singtel has also been ranked Asia&rsquo s most sustainable telecom provider, and the third worldwide.

 

Aileen Tan, Singtel group chief people and sustainability officer, says a key pillar of the company&rsquo s sustainability strategy is to safeguard the environment. &ldquo [This is] exemplified by our revised Science Based Targets initiative (SBTi)-approved targets, which will significantly reduce our carbon emissions.&rdquo

 

Singtel renewed its SBTi targets on Jan 11. It is now aiming for a group-wide 55% reduction in Scope 1 and 2 direct and indirect GHG emissions, and a 40% reduction in Scope 3 third-party emissions by 2030, with 2023 as the base year. 

 

SBTi&rsquo s team has confirmed that the net-zero goal of 2045, which Singtel had brought forward from 2050 in July 2023, is &ldquo closely aligned&rdquo with SBTi&rsquo s most stringent criteria. Singtel is currently the only Asian telco with a net-zero target ahead of 2050. 

 

Meanwhile, StarHub has managed to stay on this year&rsquo s list, but down to #80 from #34 last year. That said, the telco has been named the world&rsquo s most sustainable wireless telecom provider. 

 

StarHub&rsquo s near and long-term targets were validated and approved in November 2023 to meet the SBTi net-zero criteria. The targets include reducing absolute Scope 1 and 2 GHG emissions by 50% by 2030, and reducing absolute Scope 1, 2, and 3 GHG emissions by 90% by 2050, from a 2021 base year. 

 

StarHub aims to reach net zero across its value chain by 2050.

 

In 2023, 12% of StarHub&rsquo s energy use came from renewable electricity sources and the company continues to expand its sustainability portfolio with the goal of increasing renewable energy use to 30% by 2030.

 

&ldquo StarHub is proud to be recognised by Corporate Knights again for our sustainability initiatives,&rdquo says Veronica Lai, chief corporate and sustainability officer at StarHub. &ldquo This underscores our collective efforts and inspires us to take proactive steps to decarbonise our operations and adopt greener solutions, while not compromising on our vision to grow beyond telco.&rdquo

 

Nasdaq-listed Maxeon Solar Technologies, which debuted at #69 last year, has moved up to #44 this year. The Singapore-based solar panel manufacturer is only in its third full year of operations.

Everyone is cautious about window decoration at the end of the year.

 

 

 

 

CITY Developments Ltd (CDL) expects a substantial drop in attributable profit for its 2023 financial year ending Dec 31, as no significant divestment gains were made in the year, the property giant said on Thursday (Dec 21).

 

Stating this in a profit guidance ahead of the February 2024 release of its unaudited financial results for the second half, CDL noted that the lack of significant divestment gains was intensified by higher financing costs. Nevertheless, the group added, it expects to remain profitable for FY2023 as its overall business performance as well as core operating earnings have not been significantly affected compared with the previous financial year.

 

CDL meanwhile said that it had provided for impairment losses for its investment properties in the United Kingdom in the first half and will continue to review its portfolio of properties for impairment review.

 

&ldquo The group is in the process of finalising valuations on its portfolio of properties as at Dec 31, 2023,&rdquo it stated.

 

Interim financial statements released for the first half ended Jun 30 had revealed that the group achieved lower net profit after tax and non-controlling interest of S$66.4 million, compared with S$1.1 billion seen in H1 FY2022.

 

The drop in profit was attributed to the absence of substantial divestment gains as well.

 

And when giving its third-quarter operational update, CDL had said that the global economic outlook remains highly vulnerable to macroeconomic sensitivities, including persistent inflation, a high interest rate environment and geopolitical tension.